Legislative Services

Staffers from the Governor's Office and the Legislative Budget Board recently began public hearings on the 2026-27 Legislative Appropriations Requests (LARs) of state agencies, higher education agencies and institutions, state courts and judicial agencies. These hearings are of interest to counties because the state budget provides counties with funding for mandatory services such as indigent defense. The amount funded or reimbursed by the state varies by budget cycle.

The 88th Legislature appropriated $275 million in one-time grants for counties to construct jail diversion, crisis stabilization and mental health inpatient facilities with forensic beds. Legislative efforts to fund community-based mental health, crisis and transitional services and construct facilities to divert those with mental health issues from courts, emergency rooms, and jails will probably continue in the 2026-27 state budget cycle. Other county priorities include reimbursement of the cost to house those inmates in county jails who are on state hospital waiting lists.

Leaders sent two letters to state agencies, higher education agencies and institutions, and the state judiciary on developing their 2026-2027 LARs: a joint letter from Gov. Greg Abbott and Lt. Gov. Dan Patrick, and a separate letter from House Speaker Dade Phelan. Both letters set the budget target at 100% of 2024-25 spending levels. Amounts in excess of current spending levels will need to be requested as "exceptional items." The letters offered different budget priorities. Phelan cites property tax relief and border security as budget priorities. Abbott and Patrick echo those priorities but notably add funding for school vouchers, which was a contentious issue during the past legislative session and during the primary elections.

For the 2026-27 budget cycle, Comptroller Glenn Hegar anticipates an unexpended balance of $21.2 billion in discretionary General Revenue Funds (including balances in General Revenue-Dedicated accounts) as of Aug. 31, 2025 — the end of the current two-year budget. While leadership called for LARs to not exceed the prior cycle's appropriations, baseline funding levels can be exceeded without an exceptional item request for debt service, payroll growth, funding sufficient for the Foundation School Program to meet statutory requirements, and to maintain benefits and eligibility for Medicaid and certain other Health and Human Service programs and caseloads.

To date, only a few agencies affecting county expenditures have had budget hearings — the Texas Historical Commission, the Texas Indigent Defense Commission, the Office of Court Administration and Texas A&M Forest Service. Here are some highlights of importance to counties, beginning with an anticipated shortfall in funds available for constitutionally required indigent defense services.

Texas Indigent Defense Commission (TIDC)

• TIDC expects a $20 million revenue shortfall for the 2026-27 biennium due to the increase in juror pay authorized by HB 3474, 88th Legislature, 2023, and the corresponding decline in Jury Service Fund No. 328, which previously provided $5 million-$6 million each year in revenue for Fair Defense Account No. 5073 — the dedicated account that primarily funds indigent defense services. Only a portion of the indigent defense program is funded by the General Revenue fund (GR) — the state's primary operating fund — and that portion is mainly to provide legal services for those arrested under Operation Lone Star (OLS). TIDC is requesting additional GR in the current budget and the 2026-27 budget request to reduce the impact of the shortfall, allowing current-level funding to continue. This funding level would maintain current grant levels and continue funding for the Office of Capital and Forensic Writs from Fair Defense Account No. 5073.
• Other funding requests from TIDC for the 2026-27 biennium include:
  • $8.9 million for attorney shortages in rural counties where indigent defense felony cases have increased by 17%, while the number of available attorneys has declined by 27% during the past eight years.
  • $35 million to expand Public Defender Offices (PDOs), mostly in rural counties. PDOs generally involve a 67%-33% cost-share, with the state picking up the largest share and the counties the remainder. However, rural counties cannot meet the cost-share, limiting the expansion of PDOs. This funding request would assist rural, midsized and urban counties.
  • $47.5 million to reduce county costs for family protection representation in Child Protective Services (CPS) cases. County budgets currently fund 100% of the cost of these cases, or an estimated $63 million in 2023, according to TIDC.
  • TIDC requests for Operation Lone Star due to their ability to carry over funds from the current to the 2026-27 budget. Assuming arrest rates remain stable, TIDC believes the combined amount — $51.2 million — is sufficient to support indigent legal services in counties affected by OLS operations.

Office of Court Administration (OCA)

OCA's top funding priority is the addition of eleven (11) Regional Data Coordinators (RDCs) — one for each Administrative Judicial Region — to ensure the quality of judicial data reported by trial courts. The RDCs will focus on assessing and verifying county data collection practices, offering tailored guidance and training to improve reporting accuracy. Additional funding requests consist of support for the new business courts established by HB 19, 88th Legislature, 2023, and replacement of the appellate court case management system. The business courts did not become operational until Sept. 1, 2024.

Both the Supreme Court and the Office of Court Administration, in their budget hearings and LARs, support a 6% across-the-board pay raise for all state judiciary employees. In addition, the Supreme Court and the Judicial Compensation Commission, which is administratively attached to OCA, are requesting a judicial pay raise. They point to the last time the base salary for a district judge was increased — in 2013 — and the barrier this creates for attracting new judges.

Texas A&M Forest Service

The Forest Service LAR submission is influenced by the Panhandle fires and, most likely, the findings of the House Investigative Committee on the Panhandle Wildfires Report.

• A $144 million increase in grants to Rural Volunteer Fire Departments (VFDs) for equipment and training. According to the Texas Forest Service, VFDs are the state's first line of defense against wildfires, and their response covers 89% of the state. VFD grants are for fire trucks, protective gear, equipment and training for eligible VFDs. Most of the $144 million request is a one-time appropriation of $100 million to reduce the backlog in unfunded VFD grants, which totals $170 million. The remaining $44 million would increase the grant funding cycle on an ongoing basis. Statue prohibits the annual expenditure of more than $30 million from the dedicated account that funds VFD grants. Accordingly, this exceptional item would require legislation.
• A $369.1 million exceptional item to purchase aircraft — a one-time cost of $200 million — and contracted aircraft and support operations to increase the state's wildfire response capacity.

Texas Historical Commission (THC)

The commission's LAR includes $125 million for the Courthouse Preservation grant program, a very popular program among Texas counties. According to THC, 75 counties with submitted master plans still await matching grants to fully restore their historic courthouses. Each full courthouse restoration costs $16 million, but the program currently caps the total cumulative grant awards at $10 million per county. During the current biennium, 31 counties with more than $150 million in grant requests competed for $45 million in state funding. This left nearly 24 counties without funding to address urgent issues endangering the courthouses and county residents and nonresidents visiting or working at the courthouses, with 19 emergency requests of over $40 million denied. Many participating counties did not apply due to rising costs and unfavorable odds of securing a grant. When matched locally, the agency estimates that the $125 million appropriation would result in 12 to 14 full restorations during the biennium or fewer if a portion of the funding addresses critical needs through emergency grants.

The budget process is far along regarding agency requests, and the legislative session is only months away. County officials still have opportunities to weigh in on funding requests before and during the legislative session. County officials can work with their associations to identify their state budget priorities for the 2026-27 biennium. The Legislative Team will continue to provide regular updates regarding legislative funding requests of importance to county officials. Contact Zelma Smith or the Legislative Consultant assigned to your organization for more information on the state budget process.