Lone Star Ledge Report: What Texas’ Budget Means for Your Business
Key Takeaway
With the 2026-27 budget, leadership transitions, and major legislative shifts underway, now is the time to stay ahead. Key policy changes will shape funding, workforce development, and the regulatory landscape—directly impacting businesses and leadership teams across Texas.
Here’s what’s happening—and why it matters.
State Revenue Estimate Released
The numbers are in: Texas’ 2026-27 revenue forecast is set, giving lawmakers a clear financial roadmap for budget planning. While general revenue is slightly down, a substantial carryover balance keeps key funding decisions on the table. Now, it’s up to legislators to set priorities and shape the state’s financial future.
The Bottom Line
General revenue is projected at $194.6 billion, a 1.1% decrease from last biennium
Carryover balance is $23.76 billion, down from $32.7 billion but still a substantial figure
Lawmakers will now use this data to finalize spending priorities and budget allocations
Did You Know? 💡
Texas Comptroller Glenn Hegar is essentially the state’s chief financial officer, overseeing the collection of taxes, forecasting state revenue, and managing Texas' financial health. One of his most critical duties? Issuing the Texas Biennial Revenue Estimate (BRE)—a financial roadmap that tells lawmakers how much money they have to work with when crafting the state budget. Without his official revenue certification, the Legislature can’t pass a budget!
House & Senate Reveal First Budget Drafts
Texas lawmakers unveiled the first drafts of the 2026-27 state budget (HB1 and SB1), setting the stage for critical funding decisions. These proposals will shape investments in state agencies, higher education, and key public services.
The Bottom Line
These bills determine funding for more than 200 state agencies and higher education institutions.
Allocations include over $150 billion in general revenue and $330 billion in total funding.
Expect negotiations and adjustments as lawmakers refine the budget over the session.
Did You Know? 💡
The Texas Legislature is required by the state constitution to pass a balanced budget every two years. Unlike the federal government, Texas can’t run a deficit, meaning lawmakers must carefully allocate funds based on projected revenue.
Here’s how it works:
1️⃣ The Comptroller sets the revenue estimate (how much money Texas can spend).
2️⃣ The House and Senate propose budget drafts (HB1 and SB1).
3️⃣ Committees review and amend the proposals, considering public input and agency requests.
4️⃣ Both chambers must agree on a final version before sending it to the Governor.
5️⃣ The Governor can sign, veto, or use a line-item veto to reject specific spending.
This process directly impacts our organizations —shaping workforce development, infrastructure, and economic policy—making it essential for leaders like you to to stay informed and engaged.