Texas Senate Approves $13.2 Billion Supplemental Budget Focused on Infrastructure, Relief, and Pensions

The Texas Senate approved a $13.2 billion supplemental budget, using part of the state’s $23.8 billion surplus. The funding aligns actual 2023 expenditures with projections from the original biennial budget, a routine legislative step. Texas budgets prospectively require a supplemental bill each session to balance spending.

Senator Joan Huffman (R), sponsor of HB 500, described the measure as conservative and responsible.

“The comptroller’s projected surplus allows us to make targeted, one-time investments to address critical state needs,” Huffman said.

She emphasized that most allocations are non-recurring to preserve future budget flexibility.

The largest single investment is $2.5 billion for the proposed Texas Water Fund, created by Senate Bill 7. The Texas Senate also approved HJR 7, which would place a constitutional amendment before voters to fund the initiative. It would direct $1 billion in state revenue to the fund each year for 20 years.

“This is about a $153 billion problem,” said Senator Charles Perry (R). “This plan is a good start.”

Perry said local governments are expected to contribute another $1 billion annually, with the rest covered by recovery fees.

Other infrastructure priorities include $411 million to expand state prison capacity and $104 million to build juvenile justice centers. The bill allocates $250 million for rail crossing upgrades and $100 million to plug abandoned oil and gas wells. These investments aim to address population growth and aging infrastructure.

Disaster preparedness and response efforts receive significant funding. The bill allocates $64 million for Hurricane Beryl and Panhandle wildfire response costs. It provides $257 million for wildfire suppression aircraft and $192 million to eliminate a grant backlog for volunteer fire departments. Another $44 million is new funding for VFDs, while $135 million will build three new emergency operations centers.

To support long-term economic growth, the budget directs funds to innovation and industry development. It provides $300 million for space exploration and aeronautics research, and $250 million to grow high-tech industries like semiconductors. The bill also sets aside $350 million for nuclear energy reimbursement grants, pending related legislation.

The supplemental budget addresses rising healthcare and pension costs. It allocates $370 million for teacher retiree health insurance through the Teacher Retirement System. The state health department receives $750 million to support Medicaid. An additional $1 billion goes into the state employee pension fund to reduce unfunded liabilities.

With the session ending, House and Senate negotiators must now reconcile their budget versions. The final version of the full state budget, SB 1, is expected before the Senate for a vote by Thursday.