Texas state employees in 2026 are navigating a compensation landscape shaped by the 89th Legislative Session's budgetary priorities and the ongoing implementation of the previous biennium's historic adjustments. Most general state agency employees are currently benefiting from the stabilized 10% cumulative increase established in the 2024–2025 cycle, supplemented by new targeted retention bonuses and merit-based pools authorized for the 2026–2027 fiscal biennium.
This guide focuses specifically on employees within Texas state agencies governed by the Classification Plan and does not include independent salary structures found in higher education institutions or local municipal governments.
The Texas Biennial Budget Cycle and 2026 Compensation
In Texas, the state budget is determined every two years during the odd-year legislative sessions. The 89th Texas Legislature, which met in 2025, established the funding levels for the 2026–2027 biennium. For state employees, 2026 represents the first full year under the current General Appropriations Act, which continues to address inflationary pressures and workforce retention challenges that emerged earlier in the decade.
Unlike private sector annual reviews, Texas state pay raises generally fall into two categories: across-the-board legislative increases and agency-specific merit or reclassification increases. In 2026, the focus has shifted from the broad, percentage-based "cost-of-living" adjustments seen in 2024 toward more nuanced, performance-linked compensation and targeted adjustments for high-turnover roles in public safety and social services.
Understanding the Salary Schedules (A, B, and C)
The Texas State Auditor’s Office (SAO) maintains the Position Classification Plan, which ensures that state jobs are categorized consistently across different agencies. Your eligibility for a raise in 2026 often depends on where your position sits within these three primary schedules:
- Schedule A: Covers administrative support, maintenance, and technical positions. These roles often have narrower salary ranges and are the most sensitive to legislative across-the-board increases.
- Schedule B: Includes professional and managerial roles. These positions have broader salary ranges, allowing for more significant merit-based growth within the same pay grade.
- Schedule C: Specifically designated for commissioned law enforcement officers, such as those within the Department of Public Safety (DPS) and Texas Parks and Wildlife. This schedule usually receives independent legislative appropriations to remain competitive with large municipal police departments.
Legislative Impact: The 2026-2027 Appropriations Act
The current 2026 fiscal year operates under the funding mandates set by the Texas Legislature in 2025. While the massive 5% annual increases of the previous biennium set a new floor for state wages, the 2026 strategy emphasizes "Targeted Retention Payments."
The Shift to Strategic Compensation
Legislators have moved away from uniform percentage increases for all 150,000+ state employees. Instead, the 2026 budget allocates specific funds to agencies with turnover rates exceeding 20%. This allows agency heads more flexibility to provide significant raises to "mission-critical" staff rather than diluting funds across the entire workforce.
Agency-Specific Pay Adjustments for 2026
Several key agencies have received specialized funding to address chronic understaffing. If you are employed by one of the following departments, your 2026 pay trajectory may differ from the general state average:
- Texas Department of Criminal Justice (TDCJ): Continued funding for hazardous duty pay and correctional officer salary ladders remains a priority in 2026 to combat staffing shortages in rural facilities.
- Department of Family and Protective Services (DFPS): Caseworker retention remains a high-priority budget item, with 2026 seeing the continuation of "retention milestones"—bonuses paid out at the 12-month and 24-month employment marks.
- Department of Public Safety (DPS): Law enforcement officers under Schedule C have seen a 2026 adjustment aimed at maintaining parity with the top five largest municipal police forces in Texas (Houston, Dallas, Austin, San Antonio, and Fort Worth).
Comparison of Texas State Pay Trends (2023–2026)
To understand the 2026 landscape, it is helpful to view the progression of state pay over the last two legislative cycles. The following table illustrates the shift from emergency inflationary adjustments to the current targeted retention model.
| Fiscal Year | General Salary Increase | Primary Mechanism | Focus Area |
|---|---|---|---|
| 2023 | 0% - 5% (Targeted) | Agency-specific | Nursing and Law Enforcement |
| 2024 | 5.0% | Across-the-board | All General State Employees |
| 2025 | 5.0% | Across-the-board | Minimum Salary Floor Increases |
| 2026 | 2.0% - 7.0% (Discretionary) | Merit & Retention Pools | High-Turnover & Specialized Tech Roles |
| 2027 (Proj) | TBD | Legislative Session 90 | Economic Forecast Dependent |
How to Qualify for a Raise in 2026
Since 2026 does not feature an automatic, statutory across-the-board increase for every employee, salary growth is primarily achieved through internal agency movements. Understanding the mechanisms of the Texas Position Classification Plan is essential for professional advancement.
1. Merit Salary Increases
Agencies are granted a "merit pool" which is a percentage of their total salary budget. To receive a merit increase in 2026, an employee must generally have at least six months of continuous state service in their current title and must not have received a previous merit increase or a one-time merit payment within the last six months.
2. Promotions and Reclassifications
A promotion involves moving to a position in a higher salary group. In 2026, many agencies are using "reclassification" to move entire groups of employees to higher pay grades to reflect increased technical requirements of their jobs, particularly in IT and data science roles.
3. One-Time Merit Payments
If an agency's budget is tight, they may opt for a one-time merit payment rather than a permanent base salary increase. These are common in 2026 for employees who have reached the "maximum" of their assigned salary group range.
Benefits and Retirement: The Total Compensation View
When evaluating "pay" in 2026, Texas state employees must account for the state’s contribution to health insurance and the Employees Retirement System (ERS).
Health Insurance Contributions
For the 2026 plan year, the State of Texas continues to cover 100% of the health insurance premium for full-time employees and 50% for their dependents under the HealthSelect of Texas plan. This "hidden pay" represents an annual value of approximately $8,000 to $12,000 depending on coverage levels.
The ERS retirement contribution rates are also a factor. Following the reforms of previous years, the state's "Legacy" and "Group 4" retirement tiers remain stable in 2026. While the employee contribution remains a fixed percentage of gross pay, the state’s increased matching contribution ensures the long-term solvency of the fund, which is a critical component of the total 2026 compensation package.
Frequently Asked Questions
Will there be an across-the-board raise for all Texas state employees in 2026?
No, there is no mandatory across-the-board percentage increase for all employees in the 2026 fiscal year. Increases for 2026 are primarily driven by agency-specific merit pools, retention bonuses, and reclassifications funded by the 89th Legislature.
How does the "Salary Floor" affect new employees in 2026?
The 2025–2026 budget cycle maintained the increased minimum salary floor, ensuring that even entry-level positions in Salary Schedule A start at a living wage that is significantly higher than the federal minimum. Most agencies have now adjusted their base pay to reflect a minimum of $31,200 annually ($15/hour) for full-time staff.
Can an agency deny a merit raise if I have a high performance rating?
Yes. Merit raises in Texas are subject to the availability of funds within a specific agency's budget. Even with a "Exceeds Expectations" rating, an employee may not receive a raise if the agency's legislative appropriation for that fiscal year has already been exhausted.
Do 2026 pay raises affect my pension?
Yes. For most state employees, retirement benefits are calculated based on the "highest average salary" over a specific period (usually 36 or 60 months). Any permanent increase to your base salary in 2026 will eventually increase your lifetime annuity upon retirement.
Are there cost-of-living adjustments (COLA) for retired state employees in 2026?
COLA for retirees is not automatic in Texas. Any 2026 adjustment for retirees would require specific authorization from the Texas Legislature and is typically dependent on the actuarial soundness of the ERS pension fund.
Strategic Recommendations for State Employees
To maximize your earning potential in the 2026 fiscal environment, you should focus on documented performance and professional development. Because the current budget favors merit-based distribution, maintaining a portfolio of your contributions to agency goals is the most effective way to secure a portion of the merit pool.
If you are in a field with high private-sector competition—such as Cybersecurity, Civil Engineering, or Specialized Nursing—research the "Equity Adjustment" policies of your specific agency. In 2026, agency heads have expanded authority to grant equity raises to bring state salaries closer to market rates without requiring a formal promotion or change in job title.
