PROJECTTexas
State Fiscal Briefs

April 2023

Texas’s budget basics

According to the National Association of State Budget Officers (NASBO), Texas’s total expenditures in fiscal year (FY) 2022 were $127.6 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2022 were $2.9 trillion, ranging from $5.6 billion in Wyoming to $510.0 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Texas’s combined state and local direct general expenditures were $263.3 billion in FY 2020 (the most recent year census data were available), or $9,011 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,540.

(Note: We cite data from both NASBO and Census to provide a broader picture of each state’s fiscal situation. However, these sources detail spending from different levels of government in different years, and the COVID-19 pandemic and the federal government’s response to it significantly affected these totals in different ways in different years. Please only use one source if you are looking for historical comparisons.)

Texas’s largest spending areas per capita were elementary and secondary education ($2,179) and public welfare ($1,512). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Texas’s combined state and local general revenues were $275.5 billion in FY 2020, or $9,430 per capita. National per capita general revenues were $10,933. Texas does not levy an individual income tax or corporate income tax but does have a gross receipts tax. (Census counts this revenue as either general sales tax revenue or selective sales tax revenue.) After federal transfers, Texas’s largest sources of per capita revenue were property taxes ($2,216) and general sales taxes ($1,624).

Texas’s politics

Governor Greg Abbott, a Republican, was elected in 2022 with 56 percent of the vote. The next gubernatorial election is in 2026.

Republicans control both the House of Representatives (86 Republicans to 64 Democrats) and Senate (19 Republicans to 12 Democrats). Control of the governor’s mansion and each house of the legislature gives Republicans a trifecta in Texas. All Texas House seats are on the ballot in 2024 because representatives serve two-year terms. Senators serve a combination of two- and four-year terms during each decade’s legislative district apportionment cycle. This 2-4-4 term system ensures all Senate seats are up for election after new legislative district boundaries are drawn. All senators are therefore up for election in 2024.

Texas’s budget institutions, rules, and constraints

Texas uses a biennial budget. The legislature must pass a balanced budget, and is prohibited from carrying a deficit over into the following year. The Texas Constitution further limits spending growth with a budget rule based on personal income growth. However, the limit may be overridden with a simple legislative majority. Texas also limits total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Texas’s current budget

Governor Abbott released his FY 2024-2025 biennial budget proposal and gave his state of the state address in February 2023.

Texas enacted its FY 2022-2023 biennial budget in June 2021. The enacted budget included $248.6 billion in total spending and $116.4 billion in general fund spending over the two-year period.

Under the American Rescue Plan, Texas will receive $15.8 billion in direct state fiscal aid and $9.1 billion in local government aid from the federal government. As of January 2022, Texas had spent part of its ARP funds on refilling its unemployment insurance trust fund, public health programs, education spending, and public safety.

According to NASBO, Texas’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

  • FY 2022: $48.6 billion/$127.6 billion
  • FY 2021: $42.5 billion/$135.2 billion
  • FY 2020: $44.9 billion/$113.1 billion
  • FY 2019: $55.6 billion/$121.9 billion

For more on Texas’s budget, see