Texas leaders direct agencies, courts and universities to plan for 3% budget cuts
Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dustin Burrows have directed Texas state agencies, appellate courts and public universities to reduce their spending requests by 3% for the next two-year budget cycle.
The directive, issued July 15, 2026, establishes a spending target as Texas begins planning for its next biennial budget. It is a direction for future budget requests, rather than a final appropriations measure or an enacted reduction in current operations.
That distinction is central to what the announcement does — and does not — change. Covered entities have been told to plan requests around a 3% reduction target, but the directive does not by itself appropriate money, alter the state’s enacted budget or establish that a 3% cut has already been made to an agency’s current spending.
Agencies, courts and universities are covered
The instruction applies to state agencies, Texas appellate courts and public universities. It therefore reaches a broad set of state-funded institutions, from executive-branch agencies to the appellate judiciary and public higher education.
The announced target is 3% in spending reductions within budget requests. The available reporting does not say that every covered institution must use the same method to reach that target, and it does not specify how exemptions, if any, will be handled.
As a result, the directive should not be read as a confirmed, uniform reduction in services or operations across state government, the courts and universities. Decisions about how individual requests are prepared remain separate from the ultimate appropriations adopted for the coming budget cycle.
An early signal in the budget process
The Texas Tribune described the July 15 action as a starting point for future budget deliberations. Abbott, Patrick and Burrows issued the instruction in their respective roles as governor, lieutenant governor and House speaker, placing the request-reduction target at the outset of the state’s next budget discussions.
The next known stage is the development and review of budget requests, followed by work involving the Legislative Budget Board, negotiations among state leaders and lawmakers, and appropriations enacted by the Texas Legislature. The final fiscal effect of the directive will depend on those later steps.
In practical terms, a request is an input to the budget process, not the final decision on state spending. The 3% figure sets the planning constraint announced by the state’s top leaders, while the appropriations process will determine what funding levels are ultimately approved.
Existing budget provides the immediate context
Texas already has an enacted general appropriations framework for the 2026-27 state fiscal biennium. Senate Bill 1, the General Appropriations Act, includes approximately $338 billion in appropriations for that two-year period.
The July directive concerns the next two-year budget cycle rather than changing that existing 2026-27 appropriations framework. Its immediate significance is as a statewide signal for the preparation of future spending requests, not as a revision of the current biennial budget.
Whether the request reductions lead to changes in agency operations, appellate courts or public universities cannot yet be determined from the directive alone. That outcome will rest on how covered entities develop their requests and on the appropriations ultimately enacted by lawmakers.
Sources
- Texas agencies must cut spending by 3% under new order from Abbott, Patrick and Burrows, The Texas Tribune
- Senate Bill 1: General Appropriations Act, Texas Legislature Online