On Nov. 12, Community Impact Founder and CEO John Garrett sat down with State Reporter Hannah Norton during the company’s first-ever InCIder Hour to discuss some of the outcomes of the state propositions, and what Texans should be paying attention to ahead of next year’s elections and the following state legislative session. The event was held at Community Impact's headquarters in Pflugerville.
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Water supplies
“As Texas grows, water shortages also grow,” Norton told the audience of the Q&A conversation, “What’s next for Texas,” held by Community Impact on Nov. 12.
Proposition 4, one of the 17 constitutional amendments approved by Texas voters, sets aside $20 billion of state funding to be used for water infrastructure.
Starting in 2027, up to $1 billion in annual sales tax revenue will go to the Texas Water Fund. This money can be used for things like improving local water supplies, water reuse system repairs and flood infrastructure. It can also help fund desalination work, the process of taking salt out of groundwater to make it safe to drink.
“What’s great about this funding is that Texas already has the money,” Norton said. “It’s coming from existing sales tax revenue and mirrors the state highway fund.”
“Almost half of the constitutional amendments that voters approved last week will be going to creating new [property] tax exemptions or expanding existing ones,” Norton said.
Previously, small business owners received up to $2,500 in tax exemptions on personal property, such as furniture and office equipment.
“With Proposition 9 being approved by voters last week, it will be a $125,000 exemption, which is a lot a lot more beneficial to businesses of all sizes, but particularly small businesses,” Norton said.
The National Federation of Independent Business estimates that Texas small businesses will save $2,500-3,500 on average per year with this new exemption, Norton said. Texas homeowners will also see expanded tax exemptions.
Under Propositions 11 and 13, homeowners will receive a $140,000 exemption on their primary home, known as the state homestead exemption. Those who are over 65 or have a disability will receive a $200,000 exemption on their primary home.
“Savings are estimated to be about $480 for the average homeowner, and then about $950 if you qualify for that elderly or disabled exemption,” Norton said. “That, of course, doesn't account for local changes in taxes. If you get a tax [increase] or a tax decrease, then you might see a little bit more or less.”
During this year’s legislative session, state lawmakers approved dozens of bills impacting Texas public schools, including House Bill 2, which increases public school funding by $8.4 billion over the next two years, and Senate Bill 2, which will launch Texas’ education savings account program next school year.
HB 2 spends about $4.2 billion on raises for school employees—including teachers with at least three years of experience and support staff, such as bus drivers and librarians. HB 2 also funds a $55 increase in the basic allotment, which is the base amount of money that public schools receive from the state to use at their discretion.
Community Impact reached out to several Austin-area school districts to ask for their thoughts on changes to school funding after the 2025 legislative session.
Round Rock ISD Superintendent Hafedh Azaiez told Community Impact that while RRISD appreciates the additional state funding, less than half of its teachers will receive a raise under HB 2. If the district wanted to use the basic allotment increase for staff raises, they wouldn’t be big ones, he said.
“$55 in Round Rock ISD, by the number of students, it's less than $3 million. If we want to give a 1% raise to our staff in Round Rock ISD, it will cost us more than $3 million,” Azaiez said in a Nov. 7 interview.
The $55 basic allotment increase falls short of a roughly $1,300 increase requested earlier this year by some school leaders, who said it was needed to keep up with inflationary costs. Lawmakers told Community Impact this summer that spreading funding across multiple allotments would ensure money goes to the classroom.
“We have faced rising costs over a period of six years without a significant change to the basic allotment, and the board appreciates any additional funding for staff,” Lake Travis ISD Board President Laura White said in a statement to Community Impact.
But even after additional state funding and the district’s work to cut down expenditures, LTISD is operating under a $4.2 million budget deficit, White said.
“[LTISD’s] first rounds of budget cuts have not had a significant impact on the student experience, but the subsequent cuts will most likely be more difficult for our students, staff and community,” White said.
Leander ISD Superintendent Bruce Gearing said Texas’ upcoming education savings account program will add to the funding challenges districts already face.
“Because Texas funds schools based on student attendance, any program that shifts students out of our classrooms will influence the resources available to serve students,” Gearing said in a statement. “We’ve already been adapting to this evolving environment. Families have more choices today than ever before.”
SB 2 allocated $1 billion for the creation of an education savings account, or ESA, program, which will give families public money to spend on private education or homeschooling.
Families can begin applying for the program early next year, Community Impact previously reported, and those accepted will receive thousands of dollars in state funds to send their children to private school or homeschool them.
In the first year of the program—the 2026-27 school year—most participating families will receive about $10,330 per student for private school tuition and other expenses, while homeschool students will receive up to $2,000 annually. Students with disabilities will qualify for up to $30,000 per year.
Texans will see several statewide seats up for election on their ballots during the March primaries and the November midterm election.
Gov. Greg Abbott is pursuing a fourth term as governor. There are no term limits for Texas governors, Norton noted.
“There's no major GOP challengers yet, but you never know. [Candidate] filing closes on December 8, so there's still almost a month left,” Norton said.
On the Democratic side, candidates for governor include Austin state Rep. Gina Hinojosa and Andrew White.
U.S. senators serve six-year terms, with staggered elections so that one-third of the Senate is up for election every two years. In 2026, one of Texas’ two seats will be on the ballot, and that’s Republican Sen. John Cornyn’s.
Cornyn will run for reelection, pursuing a fifth term, and faces potential challengers from both the right and the left. Texas Attorney General Ken Paxton and U.S. Rep. Wesley Hunt, R-Houston, are expected to appear on the Republican primary ballot in March.
“With Paxton in the race, that means that the Attorney General seat in Texas is also opening up, which will be another big one to watch,” Norton said.
State Rep. James Talarico, D-Austin, and former U.S. Rep. Colin Allred are expected to appear on the Democratic primary ballot for U.S. Senate. Allred also ran against U.S. Sen. Ted Cruz last November, losing by nearly nine percentage points, Community Impact previously reported.
U.S. Rep. Jasmine Crockett, D-Dallas, has also mentioned running, Norton said, but had not officially announced a campaign as of press time.
Since Texas has a biennial legislature, the state’s lawmakers will not meet again until 2027 unless a special legislative session is called by Gov. Abbott.
If Abbott is reelected, Norton said changes to tax rates could be high on his 2027 priority list.
“The governor talked about, when he announced his re-election bid [Nov. 9], a big plan to continue cutting property taxes. He also proposed getting rid of school property taxes entirely," Norton said.
Texas’ next legislative priorities are also dependent on who gets elected to the state legislature and governor's office in 2026. Norton said Texans can expect to have a better idea of these priorities in late 2026, when the next class of lawmakers will begin drafting legislation for 2027.
