Editor's note: This article was updated to reflect that state budget legislation was filed Jan. 22.

Texas communities are grappling with water shortages and aging infrastructure as people and businesses move to the state in droves.

“We needed water yesterday in some areas,” state Sen. Charles Perry, R-Lubbock, said in a Jan. 16 phone interview with Community Impact.

Perry has a plan to inject billions of dollars into Texas’ water sector, and he said he has the support to do so this year. He wants to build on a one-time, $1 billion appropriation to the Texas Water Fund, which Texas voters approved in 2023.

In a nutshell


Perry plans to ask his colleagues in the Texas Legislature for a dedicated funding stream to help local utilities purchase more water and upgrade their infrastructure. The senator hopes lawmakers will budget $5 billion this legislative session and send $1 billion to the state water fund each year moving forward.

If approved by state lawmakers, the plan would then go to voters in November.

The legislature's initial state budget bills for 2026-27, Senate Bill 1 and House Bill 1, were filed Jan. 22. The Senate's supplemental budget will include $2.5 billion to "bolster the state's water infrastructure and expand access to supply, contingent upon the passage of legislation," according to a Jan. 22 statement from Senate Finance Committee chair Sen. Joan Huffman, R-Houston.

Details of the budget will change before it is sent to Gov. Greg Abbott's desk this spring,


What you need to know

Over 7.7 million Texans—or about one-fourth of the state’s 31.3 million residents—live in areas currently impacted by a drought, according to the National Drought Mitigation Center.

Since 2021, several Texas cities, including Dripping Springs, Conroe and Magnolia, have paused new development for a temporary period to prevent water shortages.

Funding new water projects has typically been up to local governments, but Perry said that is no longer enough.


“We've allowed communities with the biggest checkbook to go out and develop what they needed... and the ones that couldn't have been left behind,” Perry told Community Impact. “Our water solutions in the past were moving water from one area of the state to the other. We’re going to create new supply. We’re taking the local conversation to the statewide infrastructure conversation, just like we do with roads and bridges.”

Perry’s water plan is still in the works, but it could mirror the state highway fund, which is bankrolled by several sources, including vehicle registration fees, oil and natural gas taxes.

The state would use that money to desalinate—or remove salt and other minerals from—seawater and groundwater; access water extracted during oil and gas production; and acquire water from nearby states, Perry said.

‘Everything in water takes 20 years to develop,” Perry said. “This is not a plan that's going to solve everybody's problems tomorrow [and] it won't happen as quick as we need it. But... Texas does big things, and Texas is in a position financially to do big things.”


Texas lawmakers have nearly $195 billion available, including a $23.8 billion surplus, as they write the 2026-27 state budget, Texas Comptroller Glenn Hegar announced Jan. 13.

The outlook

Communities cannot meet water needs without help from the state, Rep. Caroline Harris Davila, R-Round Rock, said Dec. 12. The Austin-area lawmaker said some cities in her district have 100-year-old water pipes.

“Those cities need all the help they can get, and they've never had the tax base to prepare for this type of growth. ... A lot of the people that work in Austin are going to live in those areas, and they need that infrastructure just as much as the businesses moving into that part of town,” Harris Davila said at an event hosted by the Austin Chamber.


Sarah Kirkle, policy and legislative director for the Texas Water Association, told Community Impact the time is now to invest in water infrastructure.

“1,300 people a day are coming here, and none of them are bringing water with them,” Kirkle said. “The water infrastructure needs that [communities] have are far beyond their available funding capacity. When you total the water, wastewater and flood needs, it's in the hundreds of billions of dollars.”

Texans appear to agree. About 85% of registered voters are concerned about the risk of future water shortages, according to polling from policy think tank Texas 2036, and 68% of voters support adding $1 billion per year to the Texas Water Fund.

“The issue is that some of these water supply projects, and even water infrastructure upgrade projects, like fixing your leaking pipes, can take several years to implement,” said Jeremy Mazur, the director of infrastructure and natural resources policy for Texas 2036. “Building a reservoir can take upwards of 20-30 years, and even building a desalination plant is not really something that can be done at the snap of your fingers.”

Water supply issues may also keep companies from moving to Texas, Kirkle said.

“The state has demonstrated such success in being able to attract additional business to create jobs, and water is a basic ingredient of the state's economic success,” she said. “We don't want water to be the factor that holds the state back.”

Perry said he hopes large businesses will help invest in Texas’ water supplies after seeing the steps lawmakers are taking.

“I do think you’ll see some partnership opportunities there, specifically with water and the [power] grid,” Perry said. “They're going to become a part of the solution for us, and that just moves things faster. If you get more funding quicker, you get more opportunities quicker.”

Looking ahead

Solving Texas’ water issues will be expensive, experts say. By 2050, the state will need to raise nearly $154 billion for water infrastructure, including $59 billion for new water supply projects, $74 billion to repair aging drinking water systems and $21 billion for wastewater systems, according to a Texas 2036 report.

“We’ve got to do a better job of managing what we have,” Texas Agriculture Commissioner Sid Miller said. “The large municipalities, from the time they get the water delivered to the customer, on average lose 30% [of that water], so that's an infrastructure problem. That's our biggest single problem.”

Miller told Community Impact the Texas Legislature needs to spend taxpayer money “wisely” if they approve Perry’s plan. He said water utilities can also access grants from the Texas Department of Agriculture and the Texas Water Development Board, which creates state water plans and helps finance local projects.

“Just throwing money at a problem doesn't usually solve it,” Miller said. “There’s lots of federal money, which is our money—let's draw it back before we spend any more of the taxpayers’ money down here.”

One more thing

Texas experienced a severe, long-lasting drought in 2011, and water supply advocates say the state is not prepared for a similar situation.

“The next drought of record... will have a whole lot harsher consequences than what we faced then,” Perry said.

Farmers lost over $7 billion in crops and livestock in 2011, according to the University of Texas at Austin.

“It would not take long before drought would really begin to infringe on the operations of companies and people's lifestyles,” Perry said. “Obviously, you’d quit watering yards and quit taking a bath every night, but it would not take long. We're not ready for another 2011 drought at that coverage and extent.”

Perry had not filed legislation to boost state water funding as of Jan. 21, but he told Community Impact he was confident lawmakers would back his proposal. Lawmakers have until March 14 to file bills for the 89th Texas legislative session, which ends June 2.