Texas’ top elected officials on Wednesday instructed state agencies, appellate courts and universities to cut spending by 3% in their budget requests for the next two years “as a starting point for budget deliberations.”

Gov. Greg Abbott, Texas House Speaker Dustin Burrows and Lt. Gov. Dan Patrick, who oversees the Senate, issued the guidance, framing the move as a way to keep Texas fiscally conservative and create wiggle room to fund priorities such as property tax cuts.

Public education funding and the state’s new private school voucher program are exempted from the 3% cut, according to the guidance, as is funding needed to maintain various social programs required by state law and to cover payroll growth in state pension systems and employee benefits.

“Texas leads the nation with a strong economy and responsible governance that puts families first,” Abbott said. “This guidance protects our historic investments in public education and teachers, delivers even more property tax relief and makes the cost of living more manageable for Texas families through strict standards of efficiency and accountability from every state agency.”

In 2025, the Legislature signed off on a $338 billion budget that will cover spending through August 2027, about a 5% increase from the previous two-year budget. Lawmakers had a $24 billion budget surplus to work from.

More than one out of every seven dollars of the current biennium’s budget — $51 billion — was allocated to property tax cuts, expansions to which Abbott has made a top priority for next session.

Wednesday’s 3% cut directive applies to the budget requests agencies will submit for next year’s legislative session, when lawmakers will approve a new state spending plan covering September 2027 through August 2029.

Abbott, who is seeking a fourth term as governor this year, was set to kick off a series of policy proposals meant to improve affordability at a campaign stop in Houston later on Wednesday.

State Rep. Gina Hinojosa, the Democratic nominee for governor, has proposed drawing $17 billion from the state’s rainy day fund to send each Texas household a $1,500 check, accusing Abbott of “hoarding” money in the account. As of November 2025, the fund — essentially a savings account meant to help Texas weather difficult economic conditions — sat at a record $24.8 billion.

This article first appeared on The Texas Tribune.