Texas is poised to make the largest investment in its water supply in the state’s 180-year history after voters on Tuesday approved Proposition 4, which authorizes $20 billion to be spent on water projects over the next two decades. 

The vote comes at a time when communities are scrambling to find new water supplies to meet the needs of their growing population, all the while deteriorating infrastructure, and a warming climate threatens the state’s water supply.  

Throughout Texas’ history, ensuring water supply has rarely been a partisan issue. Many see it as a precious resource essential to both survival and the prosperity of the state’s economy. However, this year proved that water is personal and deeply emotional too. Proposed reservoirs and groundwater exports in East Texas have outraged many in the water-rich region, desalination projects along the Coastal Bend region have sparked political debate amid a water crisis, and data centers expanding across arid West Texas have locals worried about their dwindling groundwater supply.

These challenges and others pushed lawmakers to make big investments in water at the Capitol this year.

“Prop 4 is the culmination of almost 30 years of bipartisan work to create reliable and predictable funding for Texas water,” said Sarah Rountree Schlessinger, CEO of Texas Water Foundation, a nonprofit that educates Texans on water issues. 

“We are thrilled that Texans showed up, asked deep questions, and that they chose to prioritize water infrastructure needs across the state. That tells you a lot about the state of Texas water.”

A portion of existing state sales tax revenue — up to $1 billion annually — would be deposited into the Texas Water Fund each year, starting in 2027 to help fund water, wastewater and flood infrastructure projects. 

The funding comes from existing revenue, meaning no new taxes would be created. However, the money would only be transferred to the fund when sales tax collections exceed $46.5 billion in a given year. The past two fiscal years have surpassed that amount. Assuming the state’s growth continues, there will be enough money available to dedicate the $1 billion to the fund. 

The $20 billion is far short of what the state needs to maintain its water infrastructure. According to one estimate, Texas communities need nearly $154 billion over the next 50 years for projects. Both rural and urban communities will be able to tap the fund to address their existing infrastructure needs.

“Today’s vote shows that Texans across the political spectrum understand the stakes and are ready to invest in solutions that will protect our water for generations,” said Jennifer Walker, a special adviser to the National Wildlife Federation Action Fund. 

“Investing in our water infrastructure now means fewer leaks, safer drinking water, conservation of natural resources, and a stronger economy that can support families and communities for decades.”

The money will be managed by the Texas Water Development Board, the state agency that oversees the state’s water supply. Funding would be divided into two categories: water supply projects, and other existing water programs. 

Water supply projects would expand the overall volume of water available in Texas. Projects that could be paid for include desalination, which cleans salty water for drinking and agricultural use, fixing leaking pipes, water reuse, which includes treating wastewater and  produced water from the oil and gas industry, conservation strategies and constructing permitted reservoirs. Existing water programs include improving flood control infrastructure and flood mitigation, ensuring clean drinking water, and agricultural water conservation. 

While oil and gas, and big statewide water groups in Texas supported the proposition, some environmental groups were concerned that certain projects, like reservoirs, will be prioritized as a form of new water supply and take the land of farmers and residents who live in areas where they plan to be built. 

Other organizations feared it will help fund mega projects like desalination, which they believe will help industry expansion in their communities, and that local communities will be cut out of water decisions. Some conservative groups argued that spending should not be written into the Texas Constitution.  

The proposition does not greenlight projects, but rather provides a way to finance projects. Any particular project that receives funds from the Water Development Board will go through a regular application process. The Texas Water Foundation said that the proposition prohibits the use of the New Water Supply Fund for the transfer of groundwater.

The fund also comes with some oversight. Lawmakers have created a special committee to oversee the water board’s administration of the funding. The water board will be required to report on how the money is being distributed and the impact they are having in meeting state needs and the public will have a chance to give input. 

“Dedicated funding is the most important tool available to address the looming water challenges and rising costs for ratepayers across the state,” said Stacey Allison Steinbach, Texas Water Association’s Executive Director.