The Texas Biennial Budget Process

The budget process in Texas is cyclical, involving a strategic plan, Legislative Appropriations Requests, Biennial Revenue Estimate, General Appropriations Act and the governor’s signature. This all leads to a bill becoming a law and directing Texas’ finances for two more years. 

Timeline & Vision

The state budget process is cyclical. State agencies produce their budget requests in the year prior to each regular legislative session, the Legislature passes the General Appropriations Act in the second year, and the budget is implemented in the two years following, during which time the process begins again. 

The touchstone for every biennial budget is the statewide vision. Developed by the Governor and the Legislative Budget Board, this vision articulates the scope of Texas government and the values and standards that should govern state expenditures. 

Strategic Plans

The first step in the process is for each state agency to develop a strategic plan, containing their current status and intentions for the future. These plans include a mission statement, agency goals and strategies, the population served and the standards that will be used to evaluate their success. These are submitted to the Governor’s Office of Budget, Planning, and Policy and the Legislative Budget Board for approval. 

Legislative Appropriations Requests 

In the spring or early summer prior to each regular session, the Legislative Budget Board sends out instructions for each agency to develop its Legislative Appropriations Request. Agencies use these instructions to build their requests for state funding, detailing the total dollars each agency has determined that it needs in order to serve its function, as well as performance measures to guide their expenditures. These requests are then sent to the Legislative Budget Board, the Office of the Comptroller of Public Accounts, The Governor’s Office of Budget, Planning and Policy and the State Auditor’s Office, usually early in the fall prior to session. The Legislative Budget Board and Governor’s Office of Budget, Planning and Policy then hold hearings on their content. 

Biennial Revenue Estimate

At the beginning of each legislative session, the Texas Comptroller of Public Accounts produces the biennial revenue estimate (BRE). The Comptroller serves as the state’s chief tax collector, accountant, revenue estimator, treasurer and purchasing manager, and the BRE provides legislators with a careful estimate of anticipated revenue for the next biennium and a breakdown of revenue sources. The Legislature is prohibited from spending more money than the state is likely to have, and so the BRE is used as a cap on state spending. 

General Appropriations Act

Agency budget requests and other statewide and individual district funding needs comprise the state’s appropriations bill. While both the House and Senate produce a bill each session, the bill that is finally passed always alternates between the House and Senate versions. The Texas House Committee on Appropriations and the Senate Finance Committee hold hearings on the bill and amend it to reflect their legislative priorities and the limitations set by the Biennial Revenue Estimate. Each committee’s finished bill is sent to the full House or Senate, respectively, for approval. 

Both bills are then sent to a conference committee comprising members of both chambers. The committee resolves the differences between the two pieces of legislation to produce a single bill. The bill is sent to both houses so they may vote on its contents. Once passed, it is sent to the Comptroller’s office to be “certified,” meaning the Comptroller approves it as spending no more than was permitted in the Biennial Revenue Estimate. 

It’s important to note that the state regularly passes a supplemental appropriations bill in addition to the General Appropriations Act. This bill typically covers funding shortfalls for agencies or programs or addresses emergency items. 

The Governor’s Signature

After certification, the final bill is sent to the Governor for his or her signature. State statute allows the Governor a line-item veto exclusively for appropriations bills. This means the Governor can strike certain items at his or her discretion without receiving approval from the House or Senate. The veto can be overridden by a two-thirds majority in each chamber, but this option is rarely used. Once signed, the bill becomes law, directing Texas’ finances for two more years. 

Eric Wright & Associates offers a full range of advocacy services including government relations strategies, communication and research, as well as an in-depth knowledge of Texas’ biennial budget process. If you have any questions about the process, find more information in this video, and feel free to contact us at 512-478-7500 or info@wrighttexas.com.