Texas comptroller certifies new $321.3 billion state spending plan

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The $321.3 billion spending plan that Texas lawmakers approved for the next two years is balanced and on its way to Gov. Greg Abbott’s desk after it was certified Wednesday by the state’s chief financial officer, Texas Comptroller Glenn Hegar.

Before Abbott can review the budget that will direct the state’s spending for the next two years, the comptroller had to certify that the 1,115-page plan doesn’t spend more money than the state expects to bring in. Passing a balanced budget is the only task the Texas Constitution requires of lawmakers during their regular session every two years.

A number of constitutional amendments to be decided by voters will ultimately determine how much money is left in state coffers at the end of the two-year cycle — including a $1.5 billion effort to expand broadband, a $1 billion Texas Water Fund to pay for infrastructure and potentially a homestead exemption if lawmakers agree on a property tax-relief plan.

Hegar’s certification of the budget Wednesday makes it eligible for Abbott’s review, and potentially his veto pen.

Abbott has until June 18 to strike any spending lines that he doesn’t support from the budget. His line-item veto powers apply only to the budget. If the Legislature is still in session when that veto authority is exercised, the Legislature can override those decisions with a two-thirds majority vote. Logistically and legally, that becomes more difficult when lawmakers are not in session.

They can also replace vetoed spending by passing a new funding bill for those items in a later special session if the governor agrees to call it. It hasn’t happened in recent Texas history. Because a veto only subtracts line items from the budget and doesn’t add any new spending, Abbott’s vetoes — if he makes any — won’t affect the comptroller’s certification.

The General Appropriations Act for 2024-25 was passed in the final 48 hours of the 88th Legislature’s 140-day regular session, which adjourned May 29.

Hegar told lawmakers at the beginning of the session that they would have $188.2 billion in general revenue to work with in their budget process, including a historic $32.7 billion surplus.

The 2024-25 budget allocates some $144 billion in state tax money — including half of the surplus — toward tax cuts, improving mental health access, pay raises for state employees, border security, state parks expansions and the state’s energy grid, plus infrastructure for broadband and water.

It fills the state’s emergency coffers and highway funds and makes payments toward stabilizing the state’s retirement investment fund. It includes pay raises for employees of state agencies and for retired teachers.

The budget has no new money for employees who retired from state agencies. It offers no funding for the state’s sweltering prisons. It sets aside $4 billion that could be used to increase teacher pay and school funding, but budget writers agreed to release the money only if a bill creating a private school voucher program was passed. That bill failed during the regular session in May but is likely to be taken up in a special session expected later this year.

Combined with a separate spending bill that put another $7 billion of the surplus toward current-cycle needs — such as replacements for the state’s aging vehicle fleets, new park land acquisition, flood mitigation projects, school safety measures and mental health hospitals — the budgets leave $10 billion in projected revenue unspent for the next two years. The supplemental bill was certified and sent to the governor Monday.

That leaves the spending plan well below the constitutional requirement that lawmakers spend less than the $188 million available to them. And at a 10.5% increase in tax spending over the current cycle, the budget comes in well under the state’s constitutional and statutory caps on spending increases that state leaders set at 12.3%.

The House passed the budget 124-22. Senators approved it 29-2.

“This budget addresses the diverse range of needs in our rapidly expanding state,” said Senate Finance Chair Joan Huffman, R-Houston, who helped lead the process with House Appropriations Chair Greg Bonnen, another Houston-area Republican. “With the state experiencing a record-breaking surplus, increasing demands and skyrocketing national inflation, crafting this budget was a challenge because we were obligated to stay under the spending limits and plan for population growth and downturns in the global economy.”

Disclosure: The Texas comptroller of public accounts has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

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