Texas Comptroller Glenn Hegar has released the Biennial Revenue Estimate (BRE), projecting $194.6 billion in revenue for general-purpose spending during the 2026-27 biennium. This figure represents a 1.1 percent decrease from the previous biennium, primarily due to a smaller beginning balance of $23.76 billion compared to $39.43 billion in 2024-25.
Despite this decrease, Hegar assured that Texas remains financially strong and anticipates continued revenue growth in the upcoming biennium. He emphasized the importance of careful spending decisions to ensure funding for new and existing investments aimed at improving Texans' lives, noting that many residents still face high costs for essentials like groceries and housing.
The BRE outlines that $176.4 billion will come from general revenue-related funds, supplemented by a projected ending balance of $23.76 billion from 2024-25. However, $5.6 billion must be reserved for transfers to the State Highway Fund from oil and natural gas tax collections, with no reserves projected for the Economic Stabilization Fund due to its expected balance exceeding its constitutional cap.
The ending balance reflects unspent appropriations for public education and savings from substituting federal COVID-related funds in the Texas Department of Criminal Justice's budget. Hegar noted these factors have kept Texas fiscally disciplined compared to other states.
Sales tax is expected to remain the largest source of GR-R revenues, projected to increase by 9 percent to $94.2 billion in 2026-27. Other significant sources include oil production taxes ($11.8 billion), motor vehicle-related taxes ($12.5 billion), franchise taxes ($11.5 billion), and natural gas taxes ($5.4 billion).
The ESF is anticipated to reach a record $28.5 billion by the end of 2026-27, constrained by constitutional limits; otherwise, it could reach $31.9 billion.
Total state revenue is expected to hit $362.2 billion, including federal receipts and dedicated revenues unavailable for general spending.
Hegar cautioned about potential economic disruptions from global events and policies but expressed confidence in continued economic growth consistent with historical norms post-pandemic.
The full Biennial Revenue Estimate is available on the Comptroller’s website.
