Texas Gov. Greg Abbott (with microphone) speaks at a June 29 “taxpayer empowerment” campaign event in Canton, Texas, where he discussed his tax relief plan.
Texans for Greg Abbott
Texas Gov. Greg Abbott and legislative leaders on Wednesday outlined priorities for the legislature's 2027 session and ordered state agencies to reduce their base appropriation requests for the fiscal 2028-2029 biennial budget by 3%.
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The Republicans said the session will tackle Texans' affordability concerns, along with safeguarding state funding for public schools and private school vouchers, and expanding property tax relief.
"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 in a statement.
While the current biennial budget delivers $51 billion in property tax relief, Abbott, who is running for a fourth term in office, has proposed a constitutional amendment to eliminate school property taxes for homeowners.
His Empowering Texas Taxpayers plan also includes spending limits for local governments, two-thirds voter approval for their tax increases, and a mechanism for voters to force a tax hike rollback election. A cap on homestead appraisal increases would be lowered to 3% from the current 10% and annual property appraisals would move to a five-year cycle under the plan.
Abbott, along with Lt. Gov. Dan Patrick, who heads the Senate, and House Speaker Dustin Burrows, called for maintaining funding for a $1 billion Texas Education Freedom Account program "plus amounts necessary to reflect projected program participation." The voucher program for eligible students to attend private schools or be homeschooled, launched this year with 106,659 students receiving state-funded accounts for the 2026-27 school year out of more than 274,000 applicants.
As for K-12 public schools, lawmakers in the 2025 legislative session boosted funding by $8.5 billion, including raising the $6,160 per student state basic allotment in place since 2019 by $55 per student — an increase seen as inadequate given the surge in inflation over that time period.
Bond rating agencies have cited stagnant funding as a contributor to budgetary strains that have led to some underlying rating downgrades or negative outlooks for Texas districts in recent years. Public school general obligation bonds carry triple-A ratings through the Texas Permanent School Fund's bond guarantee program.
Earlier this month, State Rep. Gina Hinojosa, the Democratic nominee for governor, unveiled her affordability plan that would tap the state's economic stabilization fund (ESF) to send $1,500 "refund checks" to Texas families.
Karen is a senior reporter covering the Southwest. She has covered the municipal bond market for more than 30 years at The Bond Buyer and Reuters.... Read full bio
The state's Republican governor and legislative leaders ordered 3% cuts for the next biannual budget as they announced their priorities for the 2027 session.
The focus on Wednesday has been on the primary market, particularly the six-part $2.4 billion deal from the New York State Thruway Authority, which came a little wider than where the issuer had been trading in the secondary market.
"Currently, we are spending a lot more time of our day in the regulatory space in responding to proposed rules and changes," GFOA's Paige Mellerio said.
