State Leaders Want Agencies to Tackle
Affordability by Trimming Wish Lists 3%
Capitol Inside
July 15, 2026
The top three Texas leaders sounded the call for fiscal prudence on Wednesday when they instructed state agencies and universities to slice requests for funding from lawmakers next year by 3 percent at the same time they tackle a cost-of-living crisis that could be devastating for Republicans at the polls this fall.
Governor Greg Abbott teamed up with Lieutenant Governor Dan Patrick and Texas House Speaker Dustin Burrows on a letter that offers "guidance" to agency heads and higher education officials on what their priorities should be when drafting legislative appropriation requests for consideration in the 2027 regular session.
Taking a crack at affordability for Texas consumers and homeowners tops the list of concerns that the governor and the Legislature's top leaders expect officials at agencies and public universities to embrace when developing spending proposals to pitch to legislators for the next two-year budget cycle.
The scaling-back of LAR requests by 3 percent is the second bullet point on the Big 3 priority list for the budgetary process. Protecting state outlays for public education and the new private school voucher program is the third priority that Abbott, Patrick and Burrows set forth in the communique that has teachers funding and the advancement of property tax reform as the fourth and final item.
"This guidance protects our historic investments in public education and teachers, delivers even more property tax relief, and makes the cost of living more manageable for Texas families through strict standards of efficiency and accountability from every state agency," Abbott said.
The Republican governor declined to speculate on whether state agencies and institutions of higher learning had been operating inefficiently due to lax standards that had made them less accountable to lawmakers and taxpayers alike. But the affordability problem that's gripping the state and the nation as a whole has been a direct function of soaring prices at the gasoline pump and the grocery store predominantly during President Donald Trump's second term. Trump's war against Iran has been blamed for the record consumer costs - especially in terms of oil prices that are surging again since he declared a ceasefire to be dead and reinstated a blockade in the Strait of Hormuz this week.
The fiscal austerity guidance may be simply for show as a consequence at a time when the state expects to have a surplus in the $24 billion vicinity for the regular session that convenes in January. Trimming an appropriations request back is not the same as a directive to reduce current operating budgets.
LARs have long been known as "wish lists" in the legislative budgetary vernacular. These tend to be for amounts that are higher than the level of funding that state agency chiefs usually can expect.
"The guidance provided to state agencies today will keep our state on a fiscally conservative path that guarantees we live within our means while continuing the Texas Miracle," Patrick said.
But the timing of the directions for the budgetary preparation process from the GOP power trio raised the specter that the joint guidance was designed as a pre-emptive strike before the Republican nominee for state comptroller - Don Huffines - is sworn into the office after an appointment to the post from Abbott earlier this month.
Huffines has vowed to implement a cost-savings program that's patterned after the DOGE effort that President Donald Trump picked Elon Musk to lead at the outset of his second term. Huffines first would have to win the job in the general election in November when he squares off with Democrat Sarah Eckhardt.
A former state senator who tried to oust Abbott from the governor's office in the GOP primary election in 2022, Huffines is a far-right darling who may see a 3 percent LAR reduction request as a token move that would have no discernible effect on state finances.
State spending has gone up in every biennium since the covid pandemic with the exception of a 1 percent all funds decrease in a two-year budget that Texas legislators approved in 2021 before a $40 billion bailout by then-President Joe Biden and the Democrats in Congress backed without a single vote from the Republicans.
The federal stimulus infusion made it possible for the Legislature to pass a budget in 2023 that boost all funds spending by 29 percent with general revenue outlays up 24 percent. The Legislature adopted a budget last year that hiked GR spending 23 percent. The Republicans in Austin, however, have never acknowledged the dramatic impact that the federal emergency money during the worst health crisis in 100 years had on the budget here.
The state's budget for the biennium that starts September 1 is $338 billion in all funds with $177 billion designed for general spending.
more to come ...
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