Legislative Services

On Jan. 13, Texas Comptroller Glenn Hegar released the Biennial Revenue Estimate (BRE), projecting $194.6 billion available for general-purpose spending in the 2026-27 state budget. This estimate is a 1.1% decrease from the 2024-25 biennium, mostly due to a drop in the general revenue beginning balance – down from $39.4 billion in the 2024-25 biennium to $23.8 billion.

Counting federal and other funds, the state is expected to have $362.2 billion in total, or "all-funds," revenue in the next two-year cycle. The all-funds estimate includes $115 billion in federal funds and $70.7 billion in revenue dedicated to specific purposes.

The BRE includes a $23.8 billion surplus from the current two-year budget, which ends Aug. 31. Of this surplus:

• $6.6 billion comes from substituting federal American Rescue Plan Act funds for property tax revenue to cover public safety and jail staff costs.
• $4.5 billion is unspent from contingency appropriations for public education and education savings accounts.

The surplus may shrink if legislators authorize general revenue spending in a supplemental appropriations bill – a common practice to capture savings and address shortfalls and underfunded Medicaid costs.

In addition, $5.6 billion of the surplus is reserved for transfers to the State Highway Fund. Notably, no reserves are allocated to the state's Economic Stabilization Fund, or rainy day fund, for the 2026-27 biennium because the fund's balance is projected to exceed its constitutional cap.

(See this graphic for more on the rainy day fund cap.)

Constitutional and statutory spending limits restrict how much available revenue lawmakers may spend. Although unlikely, lawmakers may vote to exceed these limits. More likely, they could shift revenue to dedicated funds or reserves to which the spending caps do not apply. Any increase in general revenue spending authorized by a supplemental appropriations bill would increase the spending cap for the 2026-27 budget. The House and the Senate are expected to file their versions of the general appropriations bill later this month.

For more information about the 2026-27 budget process, please contact Zelma Smith.

Details about the Biennial Revenue Estimate, including infographics, are available on the Comptroller's website, comptroller.texas.gov.