Texas is Budgeting Like California. That’s a Problem. Here’s why…

Originally posted on X. ​

Texas is about to pass the largest—and possibly most progressive—budget in state history. That should send alarm bells ringing for every fiscal conservative.

The numbers don’t lie: according to Americans for Tax Reform's Sustainable Budget Project, if Texas had simply limited the growth of state funds to the rate of population growth plus inflation over the past decade, taxpayers would have been spared $51B in excessive spending and taxes.

The 2024 state funds budget was $5.8 billion higher than it should be. And now lawmakers are preparing to pass a $337 billion budget for 2026–27, with state funds up 42.8% since 2022. That’s not “conservative governing”—that’s runaway progressive budgeting with an R next to it.

What makes this moment especially troubling is that Texas had every advantage: a booming economy, a $24 billion surplus, and $28 billion parked in the Rainy Day Fund. Yet from the outset, the political appetite was clear—not to return excess funds to taxpayers, but to spend, expand, ban, and centralize.

Of that massive surplus, only $6.5 billion is going to tax relief, and only about $3.5 billion in new relief that wasn’t already in law. The rest is being poured into bloated agencies, corporate handouts, and vote-buying schemes that defy every principle of responsible budgeting.

Let’s take education. Texans were promised universal school choice. What they got instead was essentially an ESA pilot program that will serve no more than 1.5% of school-aged students—a token gesture in exchange for a staggering $8.5 billion in additional handouts to government schools. That’s on top of the $3 billion already baked in through the school finance formulas.

This is a payoff by members for members, superintendents, and government school lobbyists to protect the system, not the students. And it cements the tragic reality that this session prioritized progressive government education spending over empowering parents.

Meanwhile, the state doubled down on corporate welfare through constitutional funds like the Texas Energy Fund, Water Fund, State Highway Fund, and Nuclear Fund, which are structured to bypass constitutional spending caps and fund private contractors.

These are classic central-planning tools dressed up in Texas branding, and they reflect a progressive, command-and-control approach to economic development.

Medicaid, too, continues to balloon with over 4 million enrollees and no structural reforms in sight. Common-sense proposals like block grants and no-limit Health Savings Accounts to empower patients and reduce costs were ignored. Instead, government dependency grows while outcomes stagnate.

What’s most frustrating is that all of this could have been avoided. The Sustainable Budget Project lays out a clear path forward: tie budget growth to population plus inflation—a principle that matches government growth with the average taxpayer’s ability to fund it. Had lawmakers followed this rule, we could have prevented overspending, driven down taxes, and created the fiscal room to eliminate school district M&O property taxes.

But that vision was traded for short-term politics with excessive spending, ineffective homestead exemptions, bans for parenting kids on social media, bans on hemp, and many other flawed policies.

This session may go down as the most progressive in Texas history, not because Democrats were in control—but because too many Republicans governed like them.

We must adopt a strong constitutional spending limit that applies to all state and local spending, closes every property tax limit loophole, and requires a supermajority to exceed the limit. Future surpluses should be used to compress and ultimately eliminate property taxes.

Texas didn’t become the nation’s economic engine by spending like California. It’s time to reverse course and protect the Texas Model before it is completely unrecognizable.