Summary: This week in the Texas 88th Legislature, both the House and the Senate furthered their versions of the Texas State budget, and both are over $300B. "The state is expecting a record $188 billion in revenue estimated for 2024-25 biennium and $32.7 billion surplus. Both are a first in state history." / Willow Park Civics is providing a blog of articles and research on specific legislative topics, during the 88th Texas Legislative Session. We will update and repost this blog as new information develops about BUDGET AND SURPLUS issues and activities.
Latest Update: Friday, 17 March, 2023 Originally posted Friday, 27 January, 2023
Select #Tags for additional articles: #StateLegislation #PropertyTax
Budget and Surplus, 88th TX Legislative Session
Updated Friday, 14 April, 2023
• Senate budget panel approves $308 billion spending plan with new money for teachers, mental health, juvenile justice, The Texas Tribune, 12 April 2023, Excerpts, more details in article. Texas Senate budget leaders on Wednesday approved a $308 billion spending proposal for the next two years that would include billions of dollars in new money for mental health services, juvenile justice, property tax cuts, community colleges and pay raises for teachers and state employees.
The proposal for the 2024-25 budget cycle includes $142.1 billion in general revenue spending — about $5 billion higher than the proposal approved last week by the Texas House — at a time when lawmakers have a historic $32.7 billion surplus at their disposal this session.
Neither chamber’s proposal spends the entirety of the surplus, nor do they bust constitutional spending limits, budget leaders said.
Senators greenlit $5 billion in additional money for schools that would pay for teacher pay raises and other educational programs, including costs associated with offering parents private school subsidies. It also includes $3.7 billion for cost-of-living adjustments for retired teachers, $650 million for measures to help schools improve security and $650 million to revamp community college funding.
The bill also includes $1 billion to fund water projects and a $10 billion commitment to fund Lt. Gov. Dan Patrick’s priority package of legislation addressing the stability of the electric grid. It also sets aside $16.5 billion for property tax cuts and $4.6 billion for border security — including more than $1 billion for Republican Gov. Greg Abbott to use on border actions and programs that he chooses.
The Senate Finance Committee approved the budget plan by a vote of 16-0, sending it to the Senate floor for debate, which is expected to happen next week.
• Texas House approves $302.6 billion state budget with tax cuts and teacher and state employee raises, the Texas Tribune, 06 April 2023
• Texas House approves $300 billion draft budget, The Center Square, 11 April 2023
• Texas House Approves $300 Billion Budget Draft After Expediting Amendment Process, The Texan, 10 April 2023 Excerpts The lone constitutional requirement of the Legislature, to pass its biennial budget, is a lengthy, often drawn-out process in the Texas House that frequently ends after midnight. But this time around, the House approved its $300 billion budget draft before 9:00 p.m — finishing the entire calendar before 9:30 p.m.
By a final vote of 136 to 10, the body passed House Bill (HB) 1 which includes $10.5 billion to reduce school district property tax rates by 25 cents; $9.6 billion for various mental health services; $6.8 billion to lower Foundation School program payments, also known as “Robin Hood”; $4.6 billion for continued border security financing; and $3.5 billion to provide a cost-of-living adjustment to retired teachers.
The adopted budget is about $13 billion larger than the one originally proposed back in January, having grown with additions made to the line item for property tax relief and various other sections.
Of the 10 who voted against, two were Republicans: Reps. Tony Tinderholt (R-Arlington) and Brian Harrison (R-Midlothian). Afterward, Tinderholt stated his vote against was because, in his opinion, not enough funding was put toward property tax relief, and Harrison voted against it due to the body’s adoption of an amendment that’d prohibit budget dollars from funding any kind of school choice program.
Going into Thursday, 388 budget amendments had been pre-filed with the House; the amendments ranged from as high-profile as the school choice test to as under-the-radar as funding increases to the state’s Alternatives to Abortion program and riders addressing the ongoing “whistleblower” lawsuit against Attorney General Ken Paxton.
• Texas’ Rainy Day Fund Projected to Hit Cap for First Time, Comptroller of Texas, March 2023
• Texas Rainy Day Fund projected to hit cap for first time in state history, The Center Square, 31 March 2023, Excerpts. Texas’ Economic Stabilization Fund, also known as its Rainy Day Fund, is projected to surpass $27 billion by fiscal 2025 for the first time in Texas history, Texas Comptroller Glenn Hegar says.
“Extraordinary economic factors” and record taxes paid into state coffers contributed to an unprecedented amount of money available for the state legislature to spend and generated record high revenues for the ESF, Hegar said.
The $27 billion is more than double the $11 billion held in the fund at the end of fiscal 2022. The record amount means “the fund could reach the upper limit of its constitutionally mandated balance for the first time in its nearly 35-year history,” the comptroller said.
“Record growth in tax revenue collections in 2022 contributed to an unprecedented projected $32.7 billion ending balance in 2022-23, aided by a remarkable economic rebound after pandemic restrictions were lifted, spikes in energy prices and – unfortunately – the highest rate of general price inflation in 40 years,” the comptroller’s office said.
According to the BRE, 53% of the state’s revenue comes from sales taxes.
In fiscal 2022, total tax collections increased by 25.6% from fiscal 2021. “To put that in perspective,” the comptroller’s office explained, the maximum change in previous years was 13.4%.
Updated Friday, 17 March, 2023
• How could Texas spend its record $32.7 billion surplus?, The Texas Tribune, 13 March 2023, Excerpts. If Texas’ budget surplus were distributed directly to Texans, it could pay for 12 years of school lunches, seven months of rent or 11,000 miles of travel. Here’s how to put the big number into perspective.
$32.7 billion. Thanks to taxpayers, that’s the whopping budget surplus Texas will have toward the end of 2023.
Your Texas lawmakers are required — per the state’s constitution — to pass a balanced budget. They can spend any amount of the surplus before the 2022-23 biennium ends Aug. 31, or they can add all or part of it into the 2024-25 budget. Or they can do nothing with it at all. Exactly how they decide to use this enormous windfall is now the central conversation before the Texas Legislature.
• Lawmakers propose energy bill relief for Texans with $4 billion legislation, The Texas Tribune, 15 March 2023, Excerpts. State senators on Wednesday voted to direct $3.9 billion to pay off some of the costs pushed onto customers because of high prices for gas or electricity. The lawmakers left for future discussion the specific funding breakdown between entities to lessen costs for their customers from the storm.
• Lawmakers could use $5 billion of a record surplus for raises, flood prevention and border operations, The Texas Tribune, 08 March 2023, Excerpts. Some $5 billion of the state’s historic $32.7 billion surplus would be earmarked for state employee pay raises, mental health hospitals, border security, flood mitigation projects, Medicaid costs, state debt reduction and other items under a bill that a key Senate committee advanced Wednesday.
Senate Bill 30 [Legiscan], by Senate Finance Chair Joan Huffman, R-Houston, would add $11.8 billion to the state’s current budget, which runs until the end of August. The Senate Finance Committee passed the bill Wednesday.
The proposal includes $5 billion in general revenue made available to budget writers by unprecedented and unanticipated tax revenue left in state coffers as lawmakers entered this legislative session. It also allocates about $1.4 billion in federal recovery dollars from the American Rescue Plan Act.
• Governor Abbott, TxDOT developing record $100 billion plan for projects across the state, TXDot, 24 February 2023, Excerpts. Gov. Greg Abbott and the Texas Department of Transportation (TxDOT) are proposing a record 10-year $100 billion transportation plan that will increase the number of projects to improve congestion, maintain roadways, and increase safety across the state. This is estimated to be $15 billion more than the 2023 Unified Transportation Program (UTP) and is based on the record projected revenue for the state, derived primarily from growth in Proposition 1 (2015 legislative session) revenues generated by oil and gas severance fees dedicated to highway improvements.
This unprecedented investment in the 2024 UTP would also increase funding in vital areas, including safety, energy sector, rural and urban connectivity, border infrastructure, maintenance, and preservation.
• Abbott Budget Proposal Recommends $350 Million for Texas Space Commission, The Texan, 23 February 2023, Excerpts. Texas has been the leading state in space exploration and innovation, and a recent assurance from Gov. Greg Abbott seeks to continue that dominance into the future.
Abbott released his budget proposal for the 88th Legislative Session recommending that $350 million be provided for the creation of the Texas Space Commission.
The allocated funds will be used “to support the development of a coordinated strategic plan that will position Texas as a global leader in space travel, research, and technology,” stated Abbott in his budget document.
03 February 2023
• Governor Abbott, TxDOT developing record $100 billion plan for projects across the state, TXDot, 24 February 2023, Excerpts. Gov. Greg Abbott and the Texas Department of Transportation (TxDOT) are proposing a record 10-year $100 billion transportation plan that will increase the number of projects to improve congestion, maintain roadways, and increase safety across the state. This is estimated to be $15 billion more than the 2023 Unified Transportation Program (UTP) and is based on the record projected revenue for the state, derived primarily from growth in Proposition 1 (2015 legislative session) revenues generated by oil and gas severance fees dedicated to highway improvements.
• Abbott Budget Proposal Recommends $350 Million for Texas Space Commission, The Texan, 23 February 2023, Excerpts: Texas has been the leading state in space exploration and innovation, and a recent assurance from Gov. Greg Abbott seeks to continue that dominance into the future.
Abbott released his budget proposal for the 88th Legislative Session recommending that $350 million be provided for the creation of the Texas Space Commission.
• House Committee Receives Budget Briefing, The Texan, 17 February 2023
Breakdown of Budget Blueprint
The House Appropriations Committee began consideration of HB 1, the budget, this week and provided a breakdown of specific items within it. Per documents provided to the committee by the Legislative Budget Board, the $289 billion blueprint includes $15 billion for property tax cuts. That segment is broken down as:
$3.1 billion to compress rates next biennium accounting for growth in property values
$2.2 billion to maintain previous compression from last session
$9.7 billion to fill the proposed Property Tax Relief Fund for new cuts
Outside of property taxes, the budget blueprint includes:
$30.5 billion for road maintenance and expansion projects
$4.6 billion toward border security operations
$2.5 billion for another state university endowment fund
$2.4 billion in golden pennies school funding that cannot be recaptured
$1.8 billion to supply a 5 percent pay increase to all state employees
• Senate Finance Committee Schedules Hearings on State Budget, Texans for Fiscal Responsibility, 26 January 2023, Excerpts. Texas taxpayers have an opportunity to voice their concerns on how lawmakers intend to spend their money over the next two fiscal years as a part of the state budget. The Texas Senate Finance Committee has scheduled a series of public hearings on the matter to take place over the next few weeks.
The Senate Finance Committee has divided its initial budget deliberations up by article for Senate Bill 1. The GAA is comprised of 11 different articles, which include different line items or strategies seeking appropriations. [This article has] the hearing dates and times for each.
• $289 Billion Draft 2024-25 Budget Released in Texas Legislature, $15 Billion Set Aside for Property Tax Relief, The Texan, 18 January 2023, Excerpts. The one constitutional requirement of the Texas Legislature every two years is to pass a budget for the next biennium, and the first draft of the 2024-25 budget shows a 16 percent spending increase.
• Texas Legislature’s state budget proposals leave more than $50 billion in state funds up for grabs, The Tribune, 18 January 2023, Excerpts. The preliminary budgets by House and Senate call for $130.1 billion in state spending over two years, even though tens of billions more are available to them. The bills do not bust state or constitutional spending limits.
Here’s a glimpse into the House and Senate’s budget proposals:
Both chambers are proposing to spend $15 billion on school property tax cuts, which have become a priority for state Republican leadership.
Relating to the state’s public safety and criminal justice budget, the Texas House is proposing an increase of nearly 50% in general revenue funds, a change from $11.9 billion to $17.4 billion.
House leaders recommend spending $4.6 billion on border security funding across 13 different state agencies, including the Texas Military Department, the state Department of Public Safety and the governor’s office.
The House is proposing a $160.4 million increase in funding for women’s health programs.
Both chambers proposed additional funding for higher education.
• Texas House and Senate Begin 2024-2025 Budget Process, Texas Scorecard, 18 January 2023, Excerpts. Both the House and Senate budget drafts spend an unprecedented $130 billion in general revenue.
• Projected 2024-25 Texas Budget Surplus Now $32.7 Billion, Comptroller’s Update Estimates, The Texan, 09 January, 2023, Excerpts. Disbursement of the surplus will be a main task for the Texas Legislature when it convenes for the new session, which begins Tuesday. The historic Texas budget surplus estimate has grown even larger as Comptroller Glenn Hegar announced a $5 billion increase in an updated Biennial Revenue Estimate (BRE) on Monday.
The Texas Legislature convenes for the first day of its 88th Regular Session on Tuesday and now appears to have at its disposal $32.7 billion — a sum that has more than its fair share of stipulations and restrictions. Hegar’s July 2021 projection pegged the number at $27 billion.
“Even with constitutional spending limits and an inflation-influenced new normal, the enormous amount of projected revenue gives the state a remarkable, or a truly ‘once-in-a-lifetime,’ opportunity for historical actions this legislative session,” Hegar said, presenting the BRE Monday. / Tempering reactions, he added, “Don’t count on me announcing another big revenue jump two years from now.” / “The revenue increases that we’ve seen have been in many ways unprecedented and we cannot reasonably expect a repeat. We are unlikely to have an opportunity like this again.”
• 88th Texas Legislature: Lawmakers working with record budget surplus, Fox4News, 10 January 2023, Excerpts. Gov. Greg Abbott and Lt. Gov. Dan Patrick have both said that money should help with property tax relief. But they seem divided on the details. Speaker Dade Phelan has suggested using that money for infrastructure upgrades. Another top issue will be border security.
• Texas lawmakers will have $188.2 billion available for the next budget after record-breaking revenue growth, The Texas Tribune, 09 January 2023, Excerpts. Texas lawmakers will have $188.2 billion available for the next budget after record-breaking revenue growth
• Groups call on Texas legislature to enact zero growth budget, issue tax cuts, The Center Square, 10 January 2023, Excerpts. Comptroller releases largest general revenue and surplus projection in state history. It’s far more money than legislators have ever had at their disposal, with an increase in available money that dwarfs any previous jumps between cycles. It’s also more money than lawmakers can constitutionally spend.
Fiscally conservative groups have called on the state legislature to enact a zero growth budget and issue tax cuts to help Texans suffering from inflation after the state comptroller announced the state was expecting a record $188 billion in revenue estimated for 2024-25 biennium and $32.7 billion surplus. Both are a first in state history.
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