On the walls of the Texas Capitol rotunda hang fifty-three portraits of former governors and presidents of the republic. Whenever a governor leaves office, his or her portrait goes up and every other portrait moves over one spot. Soon, Republican Governor Greg Abbott’s portrait will join them, and the entire gallery will shift to the left, as will much of the state government after Tuesday’s stunning Democratic victories.

Hanging up Governor Abbott’s portrait may be the easiest part of changing the Capitol. Political power doesn’t change quite as easily in Texas.

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Divided Powers

Governor-elect Gina Hinojosa enters an office that is comparatively weak relative to those in other states, with executive power split across many elected statewide offices. Democrats now control most of those offices, but the Texas governor has no cabinet, and the other offices—lieutenant governor, comptroller, attorney general, et cetera—are accountable to the voters directly. The governor’s strongest formal tools include the veto and the 1,500-odd appointments to state regulatory bodies that the governor makes over a four-year term. Many of those bodies have staggered terms for appointees, so it may take years for a new governor to secure majorities. And all nominees will need confirmation from the state Senate—where Republicans have a 19-12 majority.

In Texas, the lieutenant governor is also the leader of the Senate, and under one-party rule that position was given significant authority over the legislative agenda and committee appointments. Because Republicans have retained their majority there, they could rewrite Senate rules to reduce the power of incoming Lieutenant Governor Vikki Goodwin over that body. Senate Republicans scheduled a meeting the day after the election to discuss it, according to Quorum Report.

Even with executive authority divided and the role of lieutenant governor potentially diminished, Democrats still have real power at their disposal to improve urban life in Texas. This is especially promising for Austin: Senator-elect James Talarico, Gov.-elect Hinojosa, and Lt. Gov.-elect Goodwin were all Austin-area state representatives, while Comptroller-elect Sarah Eckhardt is the current State Senator for Austin. Having four statewide officeholders who actually love the city Texas Republicans love to hate is a welcome change. Austin Mayor Kirk Watson sees “a real opportunity for partnership” with the state and highlights mental healthcare, water conservation infrastructure, and homelessness funding as potential areas of cooperation.

That partnership could also reshape transportation, housing, school funding, and other issues we’ve covered here.

Transportation

In Austin, the Democratic sweep is great news for Project Connect, the voter-approved light rail and rapid bus system that has been under siege from state Republicans for years. Outgoing Attorney General Ken Paxton has been challenging the funding mechanism in court at the behest of local opponents, and incoming Attorney General Nathan Johnson could drop that lawsuit. A Democratic House can also block Republican legislation aimed at killing Project Connect. In Sen.-elect Talarico, Austinites will also have an ally in Washington who can fight for the federal funding the project requires.

Although the Texas Department of Transportation (TxDOT) has already acknowledged the limits of urban highway construction, changing policy will be a slower process. TxDOT is governed by the Texas Transportation Commission, a five-man (yes, all men) body appointed by the governor. Gov.-elect Hinojosa will have the opportunity to appoint two new members when current commissioners’ terms expire in February, and the governor designates the chair. However, unless there are resignations, she won’t have an opportunity to secure a majority on the commission until February 2029; the remaining two commissioners’ terms expire in 2031. Winning the governorship therefore won’t give her immediate control over TxDOT’s project decisions, including the unpopular expansions of I-35 in Austin and I-45 in Houston.

Meanwhile, the Texas Constitution dedicates major revenue streams specifically to roads, with some funds restricted to non-tolled roads. Opening those funds to transit would require two-thirds approval in each legislative chamber and voter approval, a heavy lift. The state could also fund transit directly from other sources.

Beyond individual highway projects, the Democratic sweep does provide an opportunity to refresh other aspects of state transportation policy. In Austin, 65 to 75 percent of traffic deaths occur on TxDOT-owned roads, and the state has the most road deaths in the country. Gov. Abbott had opposed safety improvements that would have reduced the number of lanes on some of those urban roads, while legislators have filed bills to ban congestion pricing and traffic lane conversions. With a Democratic House and the governor’s veto, such policies now can’t become law without Democratic votes.

Housing

At the state level, advocates for housing reform have been incredibly effective, passing seven pro-housing bills in the last session. Comptroller-elect Eckhardt supported six of those bills, while the incoming lieutenant governor supported all seven. Governor-elect Hinojosa supported six of the seven. The exception was the bill that reformed the valid petition, a/k/a the “tyrant’s veto,” which she opposed. Neighborhood groups had historically weaponized that petition to oppose multifamily and affordable housing. During the campaign, Hinojosa emphasized curbing the role of institutional investors in single-family housing, but institutional investors own less than 1% of those homes nationwide.

The voting records suggest considerable, if recent, support for housing reform among the incoming statewide officials. I do not expect Democrats to roll back any of the recent housing reforms, but there might be some bipartisan appetite for action against institutional investors and an aversion to new bills that are seen as overtly overriding local control. Meanwhile, my friends who work on housing policy at the state level are going back to the drawing board, as the advocacy playbook assumed a Republican House. I’ll be following Sam Hooper’s On the Lege and Texans for Housing’s blog for more insights into state-level advocacy.

School Funding & Property Taxes

Democrats have a chance to fix how the state funds public education, including the outdated “recapture” system that leaves property-rich school districts unable to pay their own bills. Under recapture—signed into law by the state’s last Democratic governor, Ann Richards—school districts must send local property tax revenue that exceeds their entitlement to the state under a school-finance formula. That entitlement is based on attendance and the “basic allotment,” with additional funding based on student needs and other factors. For the current school year, Austin ISD’s adopted budget includes $630 million in recapture, or roughly 43% of its $1.48 billion in revenue from Austin taxpayers.

The basic allotment is only $6,215 per student, regardless of the local cost of living. Worse, the basic allotment has risen by only $55 in six years, a stretch with some of the highest inflation in living memory. As a result, districts cannot keep pace with costs. Teacher recruitment has suffered, especially in expensive cities like Austin, while non-personnel operating costs have also risen sharply. All of this has set in motion a downward spiral of annual budget deficits, higher property taxes, and further school closures.

So, the incoming Democrats have a lot of good reasons to fix this. Updating the school-funding formula to reflect inflation and the actual costs of educating students would help districts cover their bills and could reduce pressure for local tax increases. That would require Senate support, but the financial strain on school districts across the state gives lawmakers of both parties a reason to negotiate. There might also be an opportunity to pursue broader property-tax reform, including a land value tax.

Data Centers

Both Greg Abbott and Gina Hinojosa leaned into the data center backlash during their campaigns. While Hinojosa called for a moratorium until certain reforms were passed, Abbott put a pause on new approvals while regulators conducted an audit. Among the Gov.-elect’s data center pledges were to require data centers to hire union workers, protect water supplies, ban data centers’ use of nondisclosure agreements, guarantee ratepayers wouldn’t pay more for utilities, repeal the data center sales tax exemption, and give more say to communities (especially those without zoning authority). There is bipartisan support for that repeal, and I would expect a Democratic House to pursue stricter water usage standards if not requirements for closed-loop systems. I’m skeptical that a union labor requirement would survive the Senate, though, and I’m not sure if there is appetite for expanding zoning authority beyond home rule municipalities.

As the Gov.-elect has herself said, economic development and higher standards for data centers “are not mutually exclusive.” She can fulfill many of her campaign pledges with bipartisan support and without banning critical infrastructure. Her pledge to direct the Public Utility Commission to freeze utility rates to “protect” ratepayers from data centers will be harder to fulfill, however, as she will initially be able to appoint only two of the five commissioners. It’s also unclear how much authority the commission has to freeze rates in the first place.

It All Comes Back to the Senate

While I expect a raft of new legislation on many other issues affecting the lives of everyday urban Texans, all of it will have to pass through the Texas Senate. The major question now is whether the Senate will choose to be obstructionist or cooperative. Presumably, Republican senators have legislative priorities they would like to enact, so to the extent that is true they will have to work with Democrats in the House to get bills passed. But the same is true for House Democrats: neither body can force legislation into law, so they will have to work together if they want to get anything done. Meanwhile, the governor’s veto is one of the most important tools Gov.-elect Hinojosa will have; her predecessor deployed it and threatened its use to influence not only specific bills but legislative priorities, such as winning over support for school vouchers. Democrats have more incentives to moderate than Republicans, who could simply choose to hold out for two years in hopes of taking back the lower chamber in 2028 and controlling the legislative agenda again. But the smarter Republicans are also aware that voters have tired of performative politics and are looking for leaders to deliver real outcomes for everyday Texans.

In a famous song, Tom Waits sings in his raspy voice: “The sun come up, it was blue and gold / Ever since I put your picture in a frame.” Governor Abbott’s framed portrait will soon hang among his predecessors along the walls of the Capitol rotunda. Tuesday’s election has changed the power dynamics inside that building, but changing how Texas governs its cities will take more work. Outside those halls of power, the city shines a little brighter in the blue and gold.

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