Skip to main content

On Tap: The Plan to Add $20 Billion to Texas Water Funding

Published Jun 11, 2025 by Jordan Overturf

Water Infrastructure

Now that the Texas Legislature has wrapped its regular session, one issue stands at the forefront: water. In 2023, lawmakers created the Texas Water Fund with $1 billion to begin addressing the state’s $154 billion water infrastructure backlog.

This year, legislators added another $2.6 billion and set the stage for a historic investment—$20 billion over the next 20 years. That long-term funding hinges on voter approval this November.

Legislative Action

The framework comes from Senate Bill 7 (SB 7) and House Joint Resolution 7 (HJR 7), authored by Sen. Charles Perry and Rep. Cody Harris. SB 7 restructures oversight and expands eligible projects. HJR 7 proposes a constitutional amendment to dedicate $1 billion annually from surplus state sales tax revenue.

The current budget (Senate Bill 1) and Supplemental Budget Bill (House Bill 500) also include major water investments:

  • $1B for water supply/infrastructure
  • $881M to the Texas Water Fund
  • $581M for newly eligible projects
  • $130M to unlock federal matching funds

What Happens Next

The first part of SB 7 takes effect September 1. The second part, and the annual $1 billion dedication, only takes effect if voters approve HJR 7 on November 4. Houston Public Works completed a survey this week asking community stakeholders to identify local needs and priorities ahead of the election. Click here to read an expanded analysis of the bill.

Ballot Language:

November 4, 2025 ballot: "The constitutional amendment to dedicate a portion of the revenue derived from state sales and use taxes to the Texas Water Fund and to provide for the allocation and use of that revenue.”

Why Water Funding Matters for Houston

As the nation’s fifth most populous metro area, Houston relies on a vast and aging water infrastructure system to serve more than 7.8 million residents and fuel one of the country’s most dynamic economies. The region provides water to hundreds of industrial users and manages a growing population with increasingly complex demands. At the same time, chronic underinvestment and storm-related damage have left the system strained. Long-term, reliable state funding is critical to ensuring Houston can maintain and expand its water supply while modernizing the infrastructure that supports economic growth, public health, and resilience.

A Vote “For” HJR 7 Means:

  • Up to $1B per year of sales tax revenue above $46.5B goes to the Texas Water Fund (the Comptroller’s revenue estimate for fiscal year 2026 is $51.2 billion)
  • Reduced dependence on annual legislative appropriations
  • Priority funding for new water supply and infrastructure projects

If approved, the funding starts in 2027 and runs through 2047. Lawmakers have the option extend the dedicated funding stream.

Houston’s Stake

Houston stands to benefit significantly, with over $265 million already earmarked for local projects. The city faces $480 million in infrastructure needs and could be central to an interim study on including wastewater projects in future state water plans. The outcome of this vote will determine whether communities across Texas have a sustainable, long-term water funding source.

Related News

Education

Texas Lawmakers Continue Reforming Small Colleges to Add More ‘Credentials of Value’

6/23/25
Houston is one of the nation’s biggest hubs for young professionals, thanks to strong job growth and an affordable cost of living. Between 2020 and 2024, the region added an estimated 240,000 new jobs, part of a broader economic boom across Texas. Now, a new law aims to build on that momentum by expanding access to workforce training and education programs. Senate Bill 1786 (SB 1786) was signed into law on May 27 and takes immediate effect to remove barriers for Texans seeking to enroll in local community and junior college programs. Additional provisions, including regional job demand studies and data analysis, will take effect on September 1. Free Courses for Disadvantaged StudentsSB 1786 expands free dual credit courses for economically disadvantaged students in grades 9–12, helping more Texans earn college credit before graduation. The law also addresses delays in the Texas Higher Education Coordinating Board’s rulemaking for financial aid, speeding up access to grants and loans. It improves coordination across state and federal programs, including Jobs and Education for Texans (JET), P-TECH early college high schools, and TRUE reskilling programs. These changes will begin with the 2025–26 school year. Aligning Funding with Workforce Needs SB 1786 builds on the 2023 overhaul of the state’s community college finance system by tying funding to student outcomes, specifically: Earning degrees or industry-recognized credentials that lead to well-paying jobs Successfully transferring to four-year universities Completing targeted dual credit coursework Supporting  Business Growth and Regional Competitiveness By strengthening access to high-value credentials and aligning education funding with workforce outcomes, SB 1786 reinforces the region’s position as a destination for business investment and expansion. These reforms help ensure Houston has a pipeline of skilled talent ready to meet the needs of employers in high-growth sectors such as energy, life sciences, advanced manufacturing, and technology. As the Partnership works to attract companies and jobs to the region, these policies send a strong signal that Houston is preparing its people for the careers of tomorrow. The law also strengthens the definition of a “credential of value” as one that helps a student earn more than a high school graduate and justifies the cost of their education. Credentials in high-demand sectors, such as healthcare and education, may also qualify. These updates will take effect in the 2027–28 school year. Workforce-Driven Reform The goal of SB 1786 is to reduce redundancy, maximize impact, and ensure postsecondary programs are aligned with the needs of Texas employers. By supporting this legislation, Houston’s business community is helping to sustain a robust talent pipeline for years to come.  
Read More
Education

Texas Lawmakers Expand Focus on High-Growth, High-Wage Job Training for High Schoolers

6/23/25
This week, the Partnership highlighted the Texas Legislature’s work to deliver a new pathway for college, career, and military readiness in public schools. House Bill 120 expands programs that enable high school students to focus on career-oriented education. Building on that foundation is House Bill 20 (HB 20), which prescribes the types of high-growth, high-wage jobs for which Texas students can now earn high school credit. The goal of the bill is to improve outcomes for high school juniors and seniors by allowing them to focus their classwork on industry-aligned skills rather than solely traditional courses. Prescribed Career Programs HB 20 specifies 20 targeted high-wage, high-growth occupations. Here’s the list of eligible career fields: Automotive technology  Aviation maintenance Carpentry Construction management and inspection Diesel and heavy equipment Electrical Electronics technology Heating, ventilation, and air conditioning Industrial maintenance and processes Information technology and cybersecurity Manufacturing and industrial technology Masonry Mechanical and aerospace engineering Oil and gas exploration and production Plumbing & pipe fitting Refining and chemical processes Robotics and automation Sheet metal Transportation, distribution, and logistics Welding Partnering with Local Colleges and Universities The bill requires public school districts to partner with local colleges and universities to offer these courses. This builds on the Legislature’s work from the 2023 session to expand the ability of community colleges to provide credentials of value. One key change is that students participating in these courses will receive high school credit, and the classes will be factored into the per-student funding formula for school districts. Students may also earn a Level 1 or Level 2 certification, credentials that can make them immediately hirable for in-demand job opportunities after graduation.  Prepared to Extend the Program HB 20 limits the program to a five-year pilot period ending in 2031. However, lawmakers have the authority to extend the program based on the outcome. The Texas Education Commissioner is also authorized to adjust the prescribed industries every five years to match job market needs.   Ready to Explore High-Growth Careers? Start Here. Do you have a Texas high school student or recent graduate exploring their career path? The Kinder Institute offers a Workforce Demand Dashboard that highlights high-demand jobs and career clusters, with a focus on specific industries. This tool helps students make informed decisions using real-time data on skills, wages, and opportunities. 
Read More

Related Events

Public Policy

State of the County

The Greater Houston Partnership is pleased to present the 2025 State of the County, featuring Harris County Judge Lina Hidalgo. As the chief executive of the third-largest county in the nation…

Learn More
Learn More
Executive Partners