Texas Revenue Estimate Holds Steady Ahead of Special Legislative Session

Acting Texas Comptroller Kelly Hancock has confirmed that the state’s Biennial Revenue Estimate (BRE) for fiscal years 2026–27 remains unchanged, with $3.1 billion available for general-purpose spending through August 31, 2027. Hancock issued the update to Gov. Greg Abbott and the Texas Legislature ahead of the First Called Session of the 89th Legislature, which begins today. The estimate, mandated by the Texas Constitution, includes adjustments for recent legislative actions but reflects overall stability in state finances.

The updated estimate incorporates the fiscal impact of bills passed earlier this year, including supplemental funding under House Bill 500, claims and judgments outlined in HB 4486, and the full biennial funding provided by Senate Bill 1. Hancock, who took over as Acting Comptroller on July 1, emphasized that prudent fiscal planning and a robust Rainy Day Fund put Texas in a strong financial position. 

“A conservative approach to budgeting should keep us well-prepared to fund essential priorities, support growth and respond to future needs,” he said.

The Economic Stabilization Fund, commonly known as the Rainy Day Fund, is projected to reach $28.5 billion by the end of fiscal 2027. With the fund expected to hit its constitutional cap in 2026, future appropriations, such as for disaster relief, could impact the general revenue available, depending on the timing and amount of those withdrawals.

Federal policy developments could also play a significant role in Texas’ fiscal outlook. The BRE notes that recent federal legislation, H.R. 1 from the 119th Congress, includes provisions to reimburse states for border security expenditures. Texas, which has led sustained operations along the southern border, is likely to receive a notable share of those funds. However, the exact figures and disbursement schedules are still pending further federal guidance and are not yet reflected in the current estimate.

Ongoing uncertainties surrounding global economic trends, energy markets, interest rates, and federal fiscal decisions were all factored into the decision to maintain the revenue projections issued in January. While the BRE remains steady for now, state officials note that forthcoming updates may account for additional federal reimbursements and potential changes to Medicaid and nutrition program cost-sharing.