The Facts

  • Federal funds represent nearly a third (31.5%) of the funds for Texas budget in the 2012-13 biennium.
  • Accepting federal funding for Medicaid will require Texas to increase its own general revenue funding for Medicaid by approximately
  • $10.5 billion during the upcoming biennium.
  • Texas has already rejected several conditional federal grants, including education funding under the Race to the Top program, and unemployment insurance funding under the 2009 federal stimulus package, because of the conditions attached to the grants.



  • During the next session, the Texas legislature should pass a resolution declaring its opposition to federal grant programs.
  • Texas should also enact reciprocal legislation requiring rejection of federal funds in certain circumstances.
  • As a result of the Supreme Court’s decision on Medicaid expenses in the ObamaCare case, Texas has gained a potentially significant degree of flexibility with respect to programs where the federal government tied compliance to existing funding streams. Those cross-conditions are now potentially unenforceable after the Supreme Court’s ObamaCare decision.