When it comes to understanding what Texas truly values, there’s no better place to look than the state budget. The Texas Legislature is constitutionally required to convene every biennium to pass one critical piece of legislation: the state budget. But what exactly goes into crafting this essential document?

At our Legislative Summit, longtime budget expert Ursula Parks offered a candid, behind-the-scenes look at how the budget gets made and why it matters. Her presentation didn’t just walk through the process; it told a bigger story about power, priorities and the trade-offs that shape life in Texas.

Through her insightful breakdown of the numbers, Parks reminded us that behind every appropriation is a choice – and a statement of what the state chooses to invest in.

The Pros and Cons of the Texas Economy

Texas is an economic powerhouse. Our gross state product rivals that of entire countries, and we enjoy a relatively low cost of living and tax burden. We’re rich in natural resources, diverse communities and cultural pride.

Texas has much to be proud of, but it also faces significant challenges: a complex and often regressive tax system, gaps in healthcare coverage, under-resourced mental health services and growing infrastructure needs from roads to broadband to disaster response. Our education outcomes are stagnating, even as new demands rise.

These are the competing truths that make budgeting in Texas both powerful – and incredibly complex.

The Budget Is the Policy

Unlike other laws, the budget touches every corner of government. It doesn’t just fund new initiatives, it defines whether they can exist at all. It controls agency salaries, implements legislation and sets the tone for how Texas responds to issues from public safety to education equity.

It’s also legally binding: no money leaves the treasury without specific appropriations, and nothing gets funded for longer than two years without another vote.

And while the General Appropriations Act (GAA) may seem dense, it is, in Parks’ words, “the most significant statement of state priorities.” Everything else is just commentary.

How the Budget Gets Made

Texas operates on a biennial budget cycle, which means the process starts long before the legislative session kicks off. Agencies prepare their requests more than a year in advance. Lawmakers file budget bills at the start of Session, and the House and Senate spend the first months of the year holding hearings, marking up proposals and negotiating a final version.

While the Legislature has the constitutional “power of the purse,” the Governor still holds considerable sway – especially between sessions. With 140 legislative days every two years, much of state agency decision-making happens in the 590 days lawmakers aren’t in Austin.

What’s in the 2026–27 Budget?

The latest revenue estimate puts $194.6 billion on the table. Both House and Senate versions of the budget hover around $339 billion over three years, including supplemental appropriations to cover current-year costs.

Key highlights include:

• $4.9 billion in new public education funding
• $3.5 billion+ for tax relief (in different forms across chambers)
• $1.8 billion to raise personal attendant wages to $12/hour
• $6.5 billion sustained for border security
• $2.5 billion for water infrastructure
• $3 billion for dementia research (Senate bill, contingent on legislation)

Both chambers are also proposing new and sustained tax cuts and expanding programs like the Texas Energy Fund.

Guardrails and Rainy Days

Unlike the federal government, Texas can’t spend more than it brings in. The “pay-as-you-go” limit (Article III, Section 49a) prohibits deficit spending, while additional constitutional spending caps restrict growth based on the economy.

The Economic Stabilization Fund (aka the Rainy Day Fund) is the state’s cushion for economic shocks or emergencies. It can be tapped—but only with supermajority votes. And it’s been used to fund just about everything at some point: from disaster relief to pensions to health services.

Tips for Advocates: How to Talk Budget

Parks ended with a reality check for anyone hoping to secure budget support for a program or initiative: messaging matters.

Start early. Be specific. Quantify your impact. Avoid jargon. And never assume lawmakers remember what you told them last Session.

“‘Trust us’ is not a strategy,” she said. Instead, come prepared with the “what,” the “why,” and the real-world outcomes that make your case worth funding.

The Texas budget is far more than a spreadsheet – it’s a mirror reflecting the state’s values, politics and priorities. And as Parks’ presentation made clear, understanding the budget is essential to influencing it.