Federal dollars account for one-third of the Texas state budget.
Federal expenditures in Texas are one and a half times as much as what our state and local government revenues pay for, combined. Federal dollars account for one-third of the Texas state budget and one-tenth of preK-12 investments.
Federal grants usually pay for one-third of the Texas state budget, the same as in most other states. Some, like Medicaid, foster care, or the Children’s Health Insurance Program require state or local dollars to be spent as “match” while others are a set amount based on state demographics. Federal aid is especially critical in state health and human services (almost 60 percent federally funded overall) and nutrition benefits (almost 100 percent federally funded).
Outside the state budget, Social Security and Medicare provide near-universal income support and access to health care for Texas seniors, while federal tax credits such as the Earned Income Tax Credit and Child Tax Credit are powerful anti-poverty tools.
SB 1, the state budget for the 2026-27 biennium, took effect on Sept. 1, 2025. It represents $338 billion in all funds and $149 billion in general revenue spending (the
The income groups paying the highest tax rates in Texas are disproportionately Hispanic and Black, whereas the lowest-taxed group (the wealthiest 5%) is predominantly white. Sustainable tax revenue provides the
In August, the Austin City Council approved a 2026 budget with a $33 million deficit. To cover the shortfall, the city is asking voters to approve Proposition Q on Nov.
For the first time since 2019, the federal government has shut down. This on the heels of the July 4 passage of H.R. 1, the “One Big Beautiful Bill Act”,