State Budget


A balanced budget is the one bill state lawmakers must pass each legislative session. With a $10 billion or 16 percent spending increase over the 2018-2019 biennium, state lawmakers ultimately passed a $250.7 billion budget that covers existing expenditures and funds new items for 2020-2021. Gov. Greg Abbott approved the budget without any line-item vetoes. 

Health and human services spending totals $84.4 billion in state and federal funds—up just 1 percent from the last two-year budget cycle. Since Texas secured a higher federal match rate, the state can put up fewer state dollars to draw down more federal funds. Changes in the federal match rate this session allowed budget writers to invest $1.9 billion less in state general revenue for Texas Medicaid.

Overall, Texas hospitals fared well, securing funding for most of the industry’s key budget needs. The Texas Hospital Association advocated for and helped secure the following priority budget items:

Medicaid Rate Enhancements

  • $140 million GR-D: Maintain Medicaid rate enhancement for designated trauma hospitals (House and Senate, HB 1). Fully funded.
  • $23 million GR: Maintain Medicaid rate enhancement for rural hospitals’ outpatient services (House and Senate, HB 1). Fully funded.
  • $116 million GR/GR-D: Maintain Medicaid rate enhancement for safety net hospitals (House and Senate, HB 1). Fully funded.
  • $25 million ESF: Grant funding for designated trauma hospitals (House, SB 500). $15 million ESF.
  • $100 million GR: Medicaid rate enhancement for children’s hospitals (House, SB 500). $50 million GR.
  • $55 million GR: Medicaid rate enhancement for rural hospitals’ inpatient services (House, HB 1). $35 million GR/$90.5 million AF.
  • $6 million GR: Medicaid rate enhancements for rural hospitals’ labor and delivery services (Senate, HB 1). $6.2 million GR/$16 million AF.

Behavioral Health

  • $6 million GR: Funding to integrate the state’s Prescription Monitoring Program with hospitals’ electronic medical records ($6 million in House, SB 500. $5 million in Senate, HB 1). Fully funded.
  • $39 million GR: 75 Inpatient beds at non-state psychiatric hospitals ($39 million in House, HB 1. $11 million in Senate, HB 1). $26 million GR for 50 beds.
  • $50 million GR: Substance use disorder treatment (House, HB 1). $5 million GR.
  • $769 million ESF: Phase II of state psychiatric hospital redesign planning and construction ($659 million in House, HB 1. $300 million in Senate, SB 500). $445.4 million ESF. 

Maternal Health

  • $67 million GR: Extending Medicaid eligibility for women following delivery from 60 days to 12 months ($20 million contingency in House, HB 1). Not adopted.
  • $7 million GR: Statewide maternal safety initiatives (Contingency in House, HB 1). $7 million GR.
  • $3 million GR: Maternal safety initiatives through TexasAIM (Senate, HB 1). $2.66 million GR included in $7 million above.
  • $8 million GR: Bulk purchasing of long acting reversible contraceptives for providers in the Family Planning or Healthy Texas Women Programs (House, HB 1). Rider adopted to require the Texas Health and Human Services Commission to work with the Centers for Medicare & Medicaid Services to add LARC bulk purchasing to the HTW Medicaid 1115 Waiver.


  • $20 million GR: Maintain Professional Nursing Shortage Reduction Program funding and include the House rider to study the program’s effectiveness to reduce the nursing shortage ($19.9 million in House and Senate, HB 1). $19.9 million GR.
  • $60 million GR: Expansion of graduate medical education for physician training (House and Senate, HB 1). Fully funded. 

Medicaid Managed Care Administration

  • $755,000 GR: Independent review organization contractor for Medicaid managed care external medical reviews (House and Senate, HB 1). Fully funded. 


  • GR: State general revenue.
  • GR-D: Dedicate funding from state general revenue. 
  • ESF: Economic Stabilization Fund, known as the state’s Rainy Day Fund. 
  • AF: All funds (state general revenue and federal funds).


Jennifer Banda, senior vice president of government relations, 512/465-1046