Among the 17 constitutional amendments on the ballot for Texas voters this November is an amendment to dedicate a portion of sales tax revenue to the Texas Water Fund, which voters authorized in 2023 with the passage of Proposition 6. It was approved with 77.7% of voters supporting it.
The 2025 amendment, Proposition 4, would amend the state constitution to authorize the state comptroller to allocate the first $1 billion in net sales tax revenue after revenue exceeds $46.5 billion to the state Water Fund. The authority for the allocation would expire on August 31, 2047.
The Texas Water Fund is a special fund in the state treasury outside of the general fund used to finance water projects in Texas, such as water conservation; wastewater, stormwater, and drinking water infrastructure; and new water supply development. The fund received a one-time appropriation of $1 billion in 2023 and an additional $2.5 billion from the latest supplemental budget passed during the 2025 regular legislative session. It is administered by the Texas Water Development Board, a three-member board appointed by the governor.
The state sales and use tax rate in Texas is 6.25%. Local jurisdictions, such as cities, counties, and special districts, can levy additional sales and use tax rates up to 2% for a maximum combined rate of 8.25%. In 2024, the state collected $47.2 billion in revenue from sales tax, accounting for 57.6% of all tax revenue. 2023 was the first year sales and use tax revenue exceeded $46.5 billion.
Texas voters have approved similar amendments dedicating sales tax revenue to special funds in the past. A 2019 amendment dedicated revenue from the sales tax on sporting goods to the state Parks and Wildlife Department and the state Historical Commission. It was approved by 88.0% of voters. In 2015, Texas voters approved Proposition 7, which dedicated the first $2.5 billion of sales tax revenue after the first $28 billion to the State Highway Fund. The first allocation took effect for the 2018 fiscal year and will expire in 2032. It was approved with 83.2% of voters.
American Council of Engineering Companies of Texas, Texas 2036, Texas Association of Manufacturers, Texas Economic Development Council, Texas Farm Bureau (AGFUND), Texas Oil and Gas Association, Texas Water Association, and The Nature Conservancy in Texas endorsed Proposition 4 during the legislative process.
Marie Camino with The Nature Conservancy in Texas said, “Texas is growing rapidly, and with increased instances of drought, we are facing a water crisis. HJR 7 is a robust, long-term commitment to funding water infrastructure projects. By dedicating these resources to water supply projects, conservation efforts, and infrastructure improvements, HJR 7 helps protect our water resources while planning for future growth. Notably, this amendment gives the Texas Water Development Board flexibility to distribute funds. This allows Texas to invest in a range of water strategies with room to adapt to changing conditions as needed. This flexible funding will aid both immediate water needs and long-term sustainability.”
Texas Policy Research opposes Proposition 4, saying, “While addressing water infrastructure is vital, this resolution undermines limited government and fiscal transparency by embedding automatic spending into the Constitution. It crowds out private-sector solutions, reduces future tax relief opportunities, and limits legislative accountability for long-term fiscal commitments.”
In Texas, a two-thirds vote in the state legislature is required to place a constitutional amendment on the ballot. Proposition 4 passed in the Senate by a vote of 31-0. The House concurred with the Senate amended version by a vote of 122-12, with 16 not voting or absent. All voting Democrats and 88.2% of voting Republicans supported the amendment.
The 17 amendments on the ballot in Texas in November address homestead tax exemptions, tax preemptions, citizenship voting, parental rights, business taxes, and restricted-use funds.
Additional reading: Texas 2025 ballot measures