Legislative Services

Senate Bill 1, the state’s biennial budget for fiscal years 2026-27, authored by Sen. Joan Huffman (R-Houston), now awaits final adoption by both chambers before heading to the governor for final approval. The conferees appointed to reconcile differences between the House and Senate versions of SB 1 completed their negotiations, with the conference committee report released on Wednesday.

SB 1 allocates $338 billion in All Funds and $149.2 billion in General Revenue funds, an increase of $4.02 billion or 1.2% and $7.2 billion or 5.1%, respectively, compared with current spending levels. Current spending levels include adjustments made by House Bill 500 by Rep. Greg Bonnen (R-Friendswood). The state’s General Revenue Fund operates much like a county’s general operating fund. It is the primary source for funding services and purchases that do not have a dedicated funding source.

HB 500, the supplemental appropriations bill for the current two-year budget, passed the Senate on Tuesday and is on its way back to the House.

From a county perspective, SB 1 and HB 500 mostly maintain recent Legislatures’ departure from historical state-county cost share/balance. This shift affects areas such as indigent defense, other non-discretionary services and property tax exemptions, particularly in counties disproportionately impacted by exemptions for disabled veterans.

However, the 89th Legislature created and significantly funded a rural EMS grant program for counties with populations of 68,750 or fewer. SB 1 appropriates $90 million for ambulance purchases through this program, contingent on the passage of HB 3000 by Rep. Ken King (R-Canadian).

Other notable funding highlights for counties in SB 1 and HB 500:

• $330.8 million for the county rural law enforcement grant program (SB 1).
• $100 million for courthouse preservation grants (HB 500).
• $110.2 million for grants to local governments to support border security operations and for the humane processing of the remains of undocumented migrants (SB 1).
• $236 million for disaster assistance grants ($172 million in SB 1 and $64 million in HB 500 for disaster assistance grants to local governments for governor-declared disasters, including existing invoices for prior events).
• $217.5 million to keep Victims of Crime Act (VOCA) grants at current levels ($177 million to address the shortfall in federal VOCA funds and $40.5 million for the shortfall in the state Crime Victims Compensation Fund No. 469, funded in HB 500).
• $235.5 million for mental health grants, including $90 million to reduce recidivism, arrest and incarceration for justice-involved individuals with mental health issues and reduce waiting times for forensic commitments (SB 1).
• $54 million for Youth Mobile Crisis Outreach Teams, including funding to establish eight new teams, prioritizing urban areas (SB 1).
• Earmarks for crisis stabilization and other services for local mental health authorities serving Brazoria, Comal, Galveston, Jefferson, McLennan, Nacogdoches and Tarrant counties (SB 1).
• $236.3 million for volunteer fire department grants to eliminate the backlog in funding requests (HB 500).
• $170.3 million for the Texas Indigent Defense Commission ($165.2 million in SB 1 and $5.1 million in HB 500).
• $174.3 million for a 25% judicial pay raise, which would increase salaries for statutorily linked prosecutors, district attorneys and related salary supplements, in addition to an increase in the salary supplement for constitutional county judges (SB 1).
• $104 million for completion of new state juvenile justice facilities in Ellis and Brazoria counties, increasing capacity by at least 200 beds (HB 500).
• $13.3 million to reimburse counties for housing juveniles awaiting transfer to state facilities (HB 500).
• $100 million to plug abandoned oil wells (HB 500).
• $2.5 billion for water infrastructure and supply projects and grants, and $131.3 million to draw down matching federal funds under the Infrastructure Investments and Jobs Act for the Clean Water and Drinking Water State Revolving Funds (HB 500).
• $135.7 million for local park grants ($75.7 million in SB 1 and $60 million in HB 500).

The Texas Association of Counties is preparing a detailed analysis of the final decisions for SB 1 and HB 500. A worksheet will be posted online soon. Please contact Zelma Smith if you have any questions.