Texas state budget and finances

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Texas budget and finances

General information

Budget calendar: Biennial

Fiscal year: 2017

State credit rating: AAA (as of 2017)

Current governor: Greg Abbott

Financial figures

Total spending (state and federal funds): $127,283,000,000 (estimated 2016)

Per capita spending: $4,568 (estimated 2016)

Total state tax collections: $52,132,817,000 (2016)

Per capita tax collections: $1,871 (2016)

State debt: $48,237,511,000 (2014)

Per capita state debt: $1,759 (2014)

State budget and finance pages • Total state expenditures • State debt • Tax policy in Texas

Note: In comparing dollar amounts across the states, it is important to note that the cost of living can differ from state to state and within a state. The amounts given on this page have not been adjusted to reflect these differences. For more information on "regional price disparities" and the Consumer Price Index, see the U.S. Department of Commerce, Bureau of Economic Analysis. This article, which is updated on an annual basis, was last updated in June 2017. It contains information from several sources; consequently, the currency of the information can vary from source to source.

In Texas, as in other states, lawmakers and public officials are elected in part to manage the state's finances. This includes generating revenues (money coming into the state from various sources) and approving expenditures (the money spent on governmental functions and servicing state debt). State budgets are complex and fluid, as they depend on anticipated revenues and planned expenditures, which may alter over the course of a fiscal year. If revenues do not keep pace with expenditures, states generally have to raise taxes, cut services, borrow money, or a combination of the three. State budget decisions are also influenced by policy decisions at the national level, such as the Affordable Care Act or energy and environmental regulations, and issues at the local level, such as crime and the quality of education.

HIGHLIGHTS

Between fiscal years 2015 and 2016, total government spending in Texas increased by approximately $8.0 billion—from $119.3 billion in fiscal year 2015 to an estimated $127.3 billion in 2016. This represents a 6.7-percent increase.

In Texas in fiscal year 2015, 88.9 percent of total tax revenues came from sales taxes and gross receipts. Texas does not collect an income tax.

Education accounted for 37.5 percent of state expenditures in fiscal year 2015, while 30.6 percent went to Medicaid.

Definitions

The following terms are used to describe a state's finances:

• Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
• Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
• State debt refers to the money borrowed to make up for a deficit when revenues do not cover spending.
• The state credit rating is the grade given by a credit rating agency based on the general financial health of the state's government and economy.
• State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
• Federal funds are "funds received directly from the federal government."
• Total spending is calculated by adding together the totals for state and federal funds used for expenditures.

Revenues

2016 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2016 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2016 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2016 population" and "Per capita collections" have not been abbreviated.

State tax collections by source ($ in thousands), 2016
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes	Total	2016 population	Per capita collections
Texas	N/A	$46,370,774	$3,414,335	N/A	$2,347,708	$52,132,817	27,862,596	$1,871
Louisiana	$62,273	$5,352,907	$400,191	$3,038,035	$456,267	$9,309,673	4,681,666	$1,989
New Mexico	$106,524	$2,930,004	$342,527	$1,523,753	$559,299	$5,462,107	2,081,015	$2,625
Oklahoma	N/A	$3,778,399	$1,039,167	$3,324,653	$348,968	$8,491,187	3,923,561	$2,164
United States	$18,364,298	$442,909,995	$52,164,396	$392,286,910	$24,538,146	$930,263,745	322,762,018	$2,882.20
Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed June 26, 2017

The table below lists 2016 tax collections by source as percentages of total collections. About 88.9 percent of Texas' total state tax collections came from sales taxes and gross receipts.

State tax collections by source (as percentages), 2016
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes
Texas	N/A	88.9%	6.5%	N/A	4.5%
Louisiana	0.7%	57.5%	4.3%	32.6%	4.9%
New Mexico	2.0%	53.6%	6.3%	27.9%	10.2%
Oklahoma	N/A	44.5%	12.2%	39.2%	4.1%
Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed April 4, 2016

Federal aid to the state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, mainly in the form of grants for such things as Medicaid, education, and transportation. In 2014, federal aid to the states accounted for roughly 31 percent of all state general revenues. Federal aid varies from state to state. For example, Mississippi received approximately $7.2 billion in federal aid in 2014, accounting for about 41 percent of the state's general revenues, the highest percentage of all of the states. By contrast, North Dakota received about $1.5 billion in federal aid in 2014, or just 17 percent of the state's general revenues, the lowest percentage in the nation.

The table below notes what share of Texas’ general revenues came from the federal government in 2014. That year, Texas received approximately $38.6 billion in federal aid, 31.8 percent of the state's general revenues. Taking into consideration the state's 2014 population, this came out to about $1,434 in federal aid per capita. Figures from surrounding states are provided for additional context.

Federal aid to state budgets, 2014
State	Total federal aid ($ in thousands)	Federal aid as a % of general revenues	Ranking (by % of general revenues)	Est. 2014 population	Aid per capita
Texas	$38,637,304	31.8%	28	26,944,751	$1,434
Louisiana	$10,170,139	40.1%	2	4,647,880	$2,188
New Mexico	$5,371,390	34.5%	17	2,083,024	$2,579
Oklahoma	$7,290,039	34.0%	18	3,877,499	$1,880
Sources: United States Census Bureau, "2014 State and Local Government Finances," accessed June 26, 2017 Note: Per-capita figures were generated by Ballotpedia by dividing total federal aid for the state by the estimated population of that state in 2014.

Spending

Estimated 2016 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2016 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.

The total estimated government spending in Texas in fiscal year 2016 was $127.3 billion.

Total estimated state spending, FY 2016 ($ in millions)
State	State funds	Federal funds	Total spending	Population	Per capita spending
Texas	$82,327	$44,956	$127,283	27,862,596	$4,568
Louisiana	$19,265	$10,338	$29,603	4,681,666	$6,323
New Mexico	$10,701	$7,375	$18,076	2,081,015	$8,686
Oklahoma	$15,063	$7,656	$22,719	3,923,561	$5,790
Per-capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census Bureau estimates. Source: National Association of State Budget Officers, "State Expenditure Report (Fiscal 2014-2016)," accessed June 26, 2017

Spending by function

See also: State spending by function as a percent of total expenditures

State spending in Texas can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2015 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.

In fiscal year 2015, education accounted for 37.5 percent of Texas' total expenditures.

State spending by function as a percent of total expenditures, FY 2015
State	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Trans- portation	Other
Texas	24.2%	13.3%	0.1%	30.6%	2.9%	8.7%	20.3%
Louisiana	18.8%	9.9%	0.5%	27.6%	3%	5.6%	34.7%
New Mexico	18.2%	17.5%	0.6%	30.3%	1.8%	5.0%	26.5%
Oklahoma	16.1%	23.8%	1.0%	24.0%	2.2%	6.8%	26.2%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

Spending trends

The table below details the spending trends in Texas in previous years. Figures are rendered as percentages, indicating the share of the total budget spent per category.

Spending by function from 2010 to 2015 (as percentages)
Year	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Transportation	Other
2015	24.2%	13.3%	0.1%	30.6%	2.9%	8.7%	20.3%
2014	25.0%	14.0%	0.1%	30.1%	3.1%	9.0%	18.7%
2013	27.4%	15.7%	0.1%	31.7%	3.6%	8.9%	12.6%
2012	28.7%	15.8%	0.1%	30.1%	3.5%	8.1%	13.8%
2011	30.0%	11.8%	0.1%	24.6%	4.1%	7.7%	21.6%
2010	29.3%	10.0%	0.3%	24.6%	4.0%	7.2%	24.6%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

Public school funding in Texas
September 27, 2017: Louis Malfaro, president of the Texas branch of the American Federation of Teachers, wrote an op-ed calling upon the legislature and governor to increase state funding for public schools, claiming, "Since the early 2000s, funding for public education in Texas, adjusted for inflation, has been flat. Texas remains near the bottom of state rankings (36th nationwide) in classroom spending, more than $2,300 less per pupil than the national average."
Is Malfaro correct? Read Ballotpedia's fact check »

State debt

See also: Texas state debt

State debt refers to any debt owned by a state government. Debt may include any financial obligations a state has that have not been paid, such as bonds issued by state governments, money borrowed by a state government that has not been repaid, or post-retirement benefits promised to state employees. According to the U.S. Census Bureau, Texas had a debt of $48,237,511,000 in fiscal year 2015. The state debt per capita was $1,759. This ranked Texas sixth among the states in debt and 42nd in per capita debt. The total state debt owned by the 50 states was $1.15 trillion with a per capita debt of $3,582.

Economic indicators

See also: Economic indicators by state

Texas' GDP increased by 5.2 percent in 2014. Click the image to view a larger version.

Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.

Between 2011 and 2013, residents in Texas had a median annual household income of $51,752, highest among neighboring states. The state also had the largest portion of residents that earned incomes above 400 percent of the federal poverty level in 2013.

Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

Various economic indicators by state
State	Distribution of population by FPL* (2013)				Median annual income (2011-2013)	Unemployment rate		Total GSP (2013)†
	Under 100%	100-199%	200-399%	400%+		Sept. 2013	Sept. 2014
Texas	17%	20%	31%	32%	$51,752	6.3%	5.2%	$1,532,623
Louisiana	19%	22%	29%	29%	$40,844	6%	6%	$253,576
New Mexico	22%	20%	28%	30%	$44,472	6.9%	6.6%	$92,245
Oklahoma	14%	24%	31%	31%	$47,282	5.6%	4.7%	$182,086
United States	15%	19%	30%	36%	$52,047	7.2%	5.9%	$16,701,415
* Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government." † Median annual household income, 2011-2013. ‡ In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state." Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Budget process

State documents and agenciesBelow are links to official Texas budget and financial documents. The first is the state's Comprehensive Annual Financial Report (CAFR). A CAFR is a detailed presentation of a government entity's financial condition. This includes fiscal activities and balances for a fiscal year. The second link is to the state's relevant budget agency or office. Texas CAFR Texas budget agency

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:

1. Budget instructions are sent to state agencies beginning in June.
2. Agencies submit their budget requests to the governor between July and September.
3. Public hearings are held between July and October.
4. The governor submits his or her proposed budget to the state legislature by the date of the State of the State address.
5. The legislature typically adopts a budget in May. A simple majority is required to pass a budget. The fiscal year begins in September.

Texas is one of 44 states in which the governor has line item veto authority.

The legislature is constitutionally required to adopt a balanced budget. The governor must sign a balanced budget into law.

Agencies, offices, and committees

The following standing committees in the Texas State Legislature deal with budget and finance matters:

1. Appropriations Committee, Texas House of Representatives
2. Finance Committee, Texas State Senate
3. Ways & Means Committee, Texas House of Representatives

Public Interest Research Group 2016 report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2016. The report, entitled "Following the Money," measured how transparent and accountable state websites were with regard to state government spending. According to the report, Texas received a grade of A- and a numerical score of 93.5, indicating that Texas was "Leading" in terms of transparency regarding state spending.

Budget and finance ballot measures

Voting on state and local government budgets, spending, and finance
Policy
Budget policy
Ballot measures
By state
By year
Not on ballot
Local City budgets County budgets Spending limits School budgets

See also: State and local government budgets, spending and finance on the ballot and List of Texas ballot measures

Ballotpedia has tracked the following ballot measures relating to state and local budget and financial matters in Texas.

1. Texas Proposition 6, Permanent School Fund Amendment (2011)
2. Texas State Water Fund Amendment, Proposition 6 (2013)
3. Texas Debt Payment Excepted from Appropriations Limitations Amendment (2015)
4. Texas Sales and Use Tax Revenue for Transportation Amendment, Proposition 7 (2015)
5. Texas Proposition 8, Flood Infrastructure Fund Amendment (2019)
6. Texas Proposition 8, Creation of Broadband Infrastructure Fund Amendment (2023)
7. Texas Proposition 6, Creation of the Water Fund Amendment (2023)
8. Texas Proposition 5, Sales Tax on Sporting Goods Dedicated to Parks, Wildlife, and Historical Agencies Amendment (2019)

Budget and finance legislation

The following is a list of recent budget and finance bills that have been introduced in or passed by the Texas state legislature. To learn more about each of these bills, click the bill title. This information is provided by BillTrack50 and LegiScan.

Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, no legislation pertaining to this topic has been introduced in the legislature recently.

Recent news

The link below is to the most recent stories in a Google news search for the terms Texas budget. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Texas state budget and finances - Google News

Contact information

Texas Governor's Office of Budget, Planning and Policy
1100 San Jacinto, 4th Floor
Austin, Texas 78711
Telephone: 512-463-1778

See also

• Historical Texas budget and finance information
• Tax policy in Texas
• Texas government sector lobbying
• Texas public pensions
• Governor of Texas
• Texas State Senate
• Texas House of Representatives
• Texas State Legislature