Overview

• The $78 billion, two-year operating budget raises over $9 billion in state taxes and $3 billion in local levies over four years.
• Key tax measures include increased business and occupation taxes, a broadened capital gains tax, and a new tax on electric vehicle credits.
• The transportation budget introduces a 6-cent gas tax hike and phased diesel tax increases starting in 2026, indexed to inflation.
• Gov. Ferguson exercised line-item vetoes on five revenue bills, avoiding a special legislative session while preserving core budget figures.
• Republicans criticized the budget, warning it could cost families up to $2,000 annually and exacerbate affordability challenges statewide.