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.