Texas legislature wraps up 89th session: Progress, priorities, and political tradeoffs

The 89th Texas Legislature adjourned after 140 days of intense negotiations, political drama, and substantive policymaking. It was a session marked by an unusually large budget surplus, sharp ideological divides, and a flurry of conservative legislative achievements, but also some notable bipartisan cooperation on key issues such as education and infrastructure.

From the opening chaos over House leadership to the final votes on controversial social policies and massive investments in public services, this session reflects both Texas’ ambitions and its divisions. Below, we unpack the complexities beneath the headlines — the motivations, trade-offs, and real-world implications for Texans.

Starting the Session: Turbulence and Tentative Alliances

When the Texas Legislature convened in January 2025, the outlook was uncertain. The bitter fight to elect Rep. Dustin Burrows (R-Lubbock) as Speaker of the House exposed fractures within the Republican Party and strained relationships between legislative leaders and Governor Greg Abbott. Many observers feared that intra-party rivalries might paralyze the chamber.

However, surprisingly, key players aligned on some of the governor’s top priorities — particularly property tax relief, a perennial issue for Texans. This cooperation helped set the tone for a session that, while fraught with tension, avoided the gridlock and chaos that had hampered previous sessions.

Still, this unity was pragmatic rather than ideological. Lawmakers worked in a politically charged atmosphere shaped by ongoing demographic shifts, an evolving electorate, and a rapidly growing state infrastructure burden. Underneath the cooperation was a broader contest over Texas’ political and cultural future.

The Budget Bonanza: A Historic Surplus Spurs Record Spending

One of the defining features of this session was the $24 billion budget surplus, fueled by strong oil and gas revenues alongside robust sales tax collections. This windfall enabled lawmakers to craft the largest two-year state budget in Texas history — totaling $338 billion.

Breaking down the numbers:

General Revenue: $149 billion, derived from state taxes and fees.

Federal Funds: Significant, especially for healthcare and infrastructure.

Dedicated Funds: Various accounts earmarked for specific purposes, such as education, transportation, and water.

The extra funds allowed substantial investments across the board, but also complicated budget negotiations. Lawmakers had to balance competing priorities:

Public education, hungry for more funding after years of growth.

Property tax relief, a politically sensitive issue tied to voter satisfaction.

Infrastructure needs, especially for water and energy security.

Social services and Medicaid, amid calls for workforce wage improvements.

The result was a sprawling budget that tries to do a bit of everything — but also leaves some critics concerned about sustainability, especially regarding the scope of property tax cuts and the long-term funding mechanisms.

Property Tax Relief: Short-Term Relief, Long-Term Challenges

Property taxes are deeply unpopular in Texas, despite being levied locally rather than by the state. This session delivered over $51 billion in property tax relief, a significant political win for Republicans and Governor Abbott.

Key components included:

Increasing the Homestead Exemption: The amount of a home’s value exempt from school property taxes was raised from $100,000 to $140,000. For seniors and disabled Texans, the exemption was boosted even further.

“Compression” Funding: The state allocated money to school districts to reduce their reliance on local property tax revenue.

Business Tax Relief: Up to $125,000 of business inventory was exempted from local property taxes.

However, $3 billion of this relief came from reallocating border security funds — a move that reflects shifting priorities but raises questions about future enforcement funding.

Critics argue this relief is largely cosmetic, masking deeper structural issues. Property tax burdens are driven by rapidly rising home appraisals and a school finance system tied to local property wealth, which means some districts struggle despite statewide relief efforts. Without comprehensive school finance reform, these tax cuts might prove to be a temporary balm rather than a lasting solution.

Education: A Tale of Two Strategies

Education was the biggest battleground this session — both in terms of funding and ideology.

House Bill 2 delivered $8.5 billion to public schools, funding:

Teacher and staff pay raises.

Expanded special education resources.

Enhanced school safety programs.

Investments in early childhood education.

This funding marks a notable increase after years of budget constraints and partially addresses long-standing issues like teacher pay stagnation and facility needs. Yet, advocates warn that even this infusion may fall short of covering inflation-driven cost increases and enrollment growth, which could leave some districts still struggling.

On the other hand, Governor Abbott’s signature policy — the $1 billion Education Savings Account (ESA) program — represents a major ideological shift. It allows families to use public funds for private school tuition, homeschooling expenses, and related costs.

The ESA program is controversial because:

Supporters view it as empowering parents and promoting school choice.

Opponents fear it will siphon resources from public schools and exacerbate educational inequities.

The session’s passage of both bills marks a compromise — funding public schools while expanding school choice — that reflects deep ideological divisions about the future of education in Texas.

Healthcare: Incremental Gains, Lingering Gaps

Healthcare saw modest progress, with the Legislature focusing on Medicaid, workforce pay, and maternal health, though significant reforms remained elusive.

Community Attendant Wages: The Legislature approved raising pay to a $13/hour minimum for attendants assisting elderly and disabled Texans. While a step forward, advocates say this remains insufficient to reduce turnover in a workforce critical to in-home care.

Medicaid and CHIP: Funding was maintained, ensuring continued access to essential healthcare services for low-income children and families.

Medicaid Expansion: Despite bipartisan public support and generous federal incentives, expansion did not advance due to political and ideological resistance in the Legislature.

The session’s healthcare efforts reveal the ongoing tension between the needs of vulnerable populations and political calculations, leaving many Texans hoping for more comprehensive reforms in future sessions.

Infrastructure: Planning for Texas’ Future

With Texas adding approximately 1,000 new residents every day, the pressure to upgrade infrastructure was palpable.

Major investments include:

Energy: $5 billion to double the Texas Energy Fund, with an emphasis on new natural gas generation to ensure reliable, affordable power.

Water Security: $2.5 billion toward water projects — desalination, conservation, flood mitigation, and repairs to aging systems. A proposed $20 billion bond measure for water infrastructure will go to voters in November.

Broadband Access: Funding to expand internet connectivity in rural and underserved areas, addressing a critical gap in the digital economy.

These investments are critical to ensuring Texas can sustain its rapid growth, but long-term success depends on ongoing funding and strategic planning.

Social Policy: Culture Wars Intensify

The session’s social policy agenda highlighted Texas’ ongoing culture wars, with legislation targeting issues from school curricula to drug regulation.

THC Ban: Lawmakers passed a ban on consumable THC products, such as Delta-8 and Delta-9 gummies, responding to concerns over the rapidly growing hemp industry. The move faced opposition from veterans, activists, and industry leaders, who warn it could harm legitimate businesses and patients relying on hemp-derived products.

Religious Displays in Schools: Senate Bill 10 requires the Ten Commandments to be displayed in public school classrooms, sparking debate over church-state separation and potential lawsuits.

Prayer in Schools: Senate Bill 11 mandates school boards to allow time for voluntary prayer or religious study, raising concerns about potential coercion or indoctrination.

Vaccine Policy: Several bills relaxed vaccination requirements or made it easier to file conscientious exemptions, despite public health warnings about potential impacts on community immunity.

Abortion: The Legislature narrowly clarified the state’s restrictive abortion laws to protect doctors performing life-saving procedures but did not expand access. The session also banned cities from funding out-of-state abortion travel.

Criminal Justice and Public Safety

Gov. Abbott’s push for tougher bail laws partially succeeded:

A constitutional amendment on the November ballot would allow judges to deny bail for certain violent offenses.

Senate Bill 9 limits eligibility for cashless bonds.

More stringent proposals — including denying bail to unauthorized immigrants accused of crimes — failed to pass, reflecting some intra-party disagreement and concern about due process rights.

Gambling and the Lottery: A Retreat on Expansion

The Legislature took a cautious approach to gambling:

The Texas Lottery Commission was abolished amid ethics scandals, with oversight transferred to a new agency.

Online lottery sales through “couriers” were banned, curbing one of the few legal forms of online gambling.

No proposals to expand casinos or sports betting gained traction, signaling reluctance among lawmakers to broaden gambling in Texas.

Housing: Steps Toward Increased Supply

To address Texas’ skyrocketing housing costs, lawmakers passed bills easing restrictions on building:

Allowing smaller homes on smaller lots.

Permitting mixed-use developments in commercial corridors.

Making it harder for neighbors to block new construction.

While these moves encourage increased supply, other efforts to expand affordable housing and accessory dwelling units fell short.

Higher Education: Increased Political Oversight

Lawmakers tightened control over public universities, motivated by concerns over campus activism and curriculum content:

Senate Bill 37 empowers political appointees to review course offerings and academic hires.

Senate Bill 2972 limits campus protests and free speech protections.

Meanwhile, a proposal to grant in-state tuition to undocumented students stalled, reflecting ongoing debate about immigration and access.

What Didn’t Make It

Several notable proposals failed:

A ban on taxpayer-funded lobbying remains off the table.

Civil litigation reform stalled amid opposition.

Medicaid expansion again failed to pass, despite polling support.

Final Thoughts: A Session of Compromise and Contradiction

The 89th Texas Legislature accomplished much: a record budget, major tax relief, big investments in education and infrastructure, and a conservative social policy agenda.

Yet these wins came with compromises and controversies. Property tax relief sidesteps systemic reform. School funding grows but amid the expansion of school vouchers. Healthcare advances modestly but leaves many gaps. Infrastructure investments prepare Texas for the future but require voter approval and sustained effort.

Social policy underscored the cultural divides shaping Texas politics, while the budget reflects a state at a crossroads — wealthy but facing tough choices.

Ultimately, the session proved functional, delivering results while navigating political minefields. But Texas’ challenges — economic, demographic, and cultural — ensure that the debates are far from over. The next chapter begins with voter decisions in November and the ongoing push and pull between growth, governance, and identity.