Texas SB 789 Infrastructure Funding Bill: Amarillo City Budget Allocations Set for Review

The Texas Legislature passed Senate Bill 789 in its 2025 session, which revises the formula for distributing state infrastructure grants to municipalities with populations above 150,000. Amarillo qualifies under the updated population thresholds and will submit its first compliance report to the Texas Comptroller by September 2026.

Timing of the change

The bill takes effect on January 1, 2027, after the current biennial budget cycle ends. City staff in Amarillo have begun reviewing capital improvement plans that cover Interstate 40 corridor repairs and the expansion of the city's wastewater treatment plant on the north side of town. Policy analysts at the Texas Municipal League note that the new formula weights per-capita road miles more heavily than previous versions.

Local advocates note that Amarillo's 2025 general fund already earmarks 18 percent of expenditures for public works. Under the legislation the state will provide matching dollars only after cities document maintenance backlogs through the Texas Department of Transportation's pavement condition index. The index showed 37 percent of Amarillo's major arterials rated fair or poor in the most recent statewide report.

Projected local effects

City budget documents list $8.4 million in planned water line replacements for fiscal year 2027. The new grant rules require that 40 percent of any state allocation support projects serving census tracts with median household incomes below the state average. Three such tracts lie within Amarillo city limits, according to 2024 American Community Survey data released by the U.S. Census Bureau.

Public works officials have scheduled two community meetings in August at the Amarillo Civic Center to explain how the reporting requirements will affect project sequencing. The government says the policy will require quarterly updates on fund usage, with the first disbursement window opening in March 2027.