Today Gov. Ferguson signed the tax bills (except for one partial veto) and partially vetoed the operating budget.

He vetoed the provision of ESSB 5794 that would have applied the business and occupation (B&O) tax to interest on investments or loans secured by first mortgages or deeds of trust on non-transient residential properties. This means that estimated state revenues to funds subject to the outlook (NGFO) will be lower than assumed in the operating budget. The provision would have added $85.4 million in 2025–27 and $130.1 million in 2027–29.

On its own, that veto will not put the operating budget out of balance. (The governor is not required to sign a balanced budget.)

It is not yet clear which provisions of the operating budget were vetoed or how they will affect the estimated NGFO ending balance.