Texas Approves $338 Billion Budget with Major Boost for Schools Tax Relief and Infrastructure

Texas lawmakers have officially passed a sweeping $338 billion state budget, setting the stage for transformative changes across education, infrastructure, and property tax relief. The budget, approved by the Texas Senate, now awaits the final signature from Governor Greg Abbott.

Here’s a detailed look at how the two-year spending plan will impact millions of Texans and where the money is going.

A Historic Budget That Touches Every Texan

The newly approved budget marks a modest 1.2% increase over the previous biennium, with a total of $237.1 billion allocated from all state funds — a 4.8% rise. While the numbers are significant, what stands out more are the clear spending priorities: education, tax relief, infrastructure, and long-term sustainability of essential state systems.

$51 Billion Dedicated to Property Tax Relief

One of the largest components of the budget is the $51 billion earmarked for property tax relief. For homeowners across the state, this means real financial changes. A major part of this relief is through increased funding from the state to school districts, allowing local governments to reduce the property tax burden on residents.

Another substantial reform is the increase in the homestead exemption. This measure raises the untaxed value of a homeowner’s primary residence from $100,000 to $140,000 — or $150,000 for seniors — helping families save more of their hard-earned money. This adjustment continues a broader tax relief strategy that began in 2019 and is now gaining renewed momentum.

$8.5 Billion Investment in Public Education

Texas is also directing major funding into its public school system. The legislature passed Senate Bill 2, which allocates $8.5 billion to public education initiatives. A significant portion of this — $4.2 billion — will go toward teacher and staff salary increases, making long-awaited raises a reality.

Additional funds include:

$1.3 billion for district operating expenses such as insurance, utilities, and teacher retirement contributions.

$2 billion to support full-day pre-K programs, special education, early learning interventions, and career and technical education.

$430 million to enhance school safety measures across the state.

These measures aim to modernize Texas' education system while providing the support that teachers, staff, and students need to succeed.

Strengthening Power and Water Infrastructure

The budget also addresses long-term infrastructure needs. Senate Bill 6 is focused on stabilizing the Texas electrical grid. With this legislation, the state will take a more hands-on approach to managing energy transactions between generators and major electricity consumers — a crucial step following past winter storm failures.

Meanwhile, House Joint Resolution 7 proposes the creation of a state water fund, powered by $1 billion from the state’s sales and use tax revenue. These funds will support vital water supply projects aimed at preparing Texas for future growth and ensuring resilience against drought and climate pressures.

What Comes Next for the Budget

Now that the budget has passed the legislature, it awaits final approval from Governor Abbott. The governor has ten days to either sign the budget or veto specific elements. If no action is taken within that period, the budget will automatically become law.

Texans can expect these changes to begin shaping their communities in the coming months, from improvements in public schools to noticeable savings in property taxes and more secure energy and water systems.

This budget represents a forward-thinking investment in Texas’ people and infrastructure. With its emphasis on education, homeowner relief, and sustainable systems, the $338 billion plan is not just a financial document — it’s a strategic blueprint for the state’s future.

Texans will be watching closely as these funds begin to roll out, bringing both immediate and long-term benefits to homes, schools, and communities statewide.