What would the Texas national budget look like?

It would look like the budget of a wealthy, lightly governed mid-sized country. Most of it already exists in Austin. The new layer is thin, and the revenue to cover all of it is already coming in.

Two ledgers, side by side

A national budget is just income against outgo. On the income side, Texans already generate about $453 billion a year in taxes between Washington and Austin. On the outgo side, governing Texas, defense, every federal agency and the people who staff it, every grant and contract, the courts, the parks, the border stations, plus the entire existing state budget, costs about $295 billion a year. Income comfortably exceeds the cost of running the country.

Most of the budget is already built

Independence does not start from a blank page. Texas already runs a state budget that funds schools, highways, Medicaid, environmental regulation, public safety, and a state military department. There is a Texas-level agency that mirrors nearly every federal cabinet department. The bulk of a Texas national budget is the Texas budget that already exists, plus the federal functions that already happen on Texas soil and that the report already counts as a cost.

The genuinely new layer is small

What independence adds is the slice Washington runs from outside the state: a central bank, a foreign ministry and embassies, a customs and tax service, and aviation, drug, financial, and communications regulators. The genuinely new recurring bill for all of it is about $5 to $15 billion a year, one to three percent of Texas revenue. A good share of it pays for itself, because a central bank runs on seigniorage and the regulators run mostly on fees. This is a rounding line in a $453 billion budget, not a budget-buster.

Defense fits inside what Texas already spends

Defense is not a gap either. The federal government already runs about $60 billion of defense activity inside Texas, and the report already counts that as a Texas cost. A Texas defending Texas benchmarks to capable middle powers, Australia at about $29 billion or Israel at about $31 billion, both comfortably under what is already being spent in the state. Texas could field a top-fifteen military for well under what it already hosts.

The one big one-time item, named honestly

A national budget has a balance sheet, not just an income statement, so name the largest item plainly. A sovereign currency needs foreign-exchange reserves to be credible, on the order of 10 to 30 percent of GDP, which for Texas is several hundred billion dollars. That is not a yearly expense. It is a one-time holding, an asset Texas would own and earn a return on, built up over years out of the margin between what Texans pay and what their government costs. It is the biggest financial fact of independence, and the room in the budget is exactly what funds it.

The bottom line

The Texas national budget is mostly the budget Austin already runs, plus a thin new layer that largely funds itself, all covered by revenue Texans already generate. Income exceeds outgo, with one major one-time asset, the currency reserve, paid for out of the margin over time.