On Thursday, an influential Texas House committee approved a two-year, $302.6 billion spending plan that includes measures to secure the border, reduce property taxes, and give teachers and state employees their first pay increases in more than ten years.
The 2024–25 plan, which spends $136.9 billion in general income, was approved by the House Appropriations Committee on a party-line vote of 23–3, sending it to the entire House. In addition, the committee’s budget proposal suggests allocating an extra $5 billion for public schools, more money for higher education, $3 billion to expand mental health services, and an additional $3.5 billion for cost-of-living increases for retired teachers, their first in nearly 20 years.
“You should be very proud of the work that you guys have done, committee chair Greg Bonnen, R-Friendswood, told committee members. “You’ve worked extremely hard for many hours and made some very difficult decisions, and I’m very proud of what you have delivered.”
However, the two-year budget before the House Appropriations Committee comes in well below the amount they have available to spend — and yet leaves out tens of billions in requests ranging from affordable child care and rent relief programs to pay hikes for state retirees. This is even though the state has a historic $32.7 billion surplus and record cash in reserves.
It also lists $350 million in requests from Governor Greg Abbott to restock his coffers for economic development and disaster relief, which can be used to pay for grants, migrant busing programs, and disaster recovery. His detractors consider the money slush funds with minimal legislative supervision. The budget also rejects the Texas Facilities Commission’s demand to modernize its border operations, including its bridges, barriers, cameras, and ground sensors, at least temporarily.
Trey Martinez Fischer, a Democrat from San Antonio, argued that more financing for education ought to have been allocated and that it would be more challenging to alter school funding after the budget plan is debated on the House floor. While amendments are permitted during the floor debate, generally speaking, the money added during the floor debate must be equivalent to the same amount taken out of another budget section.
“I’m not convinced that these numbers do anything to confront the inflationary costs in our schools. I want to see something [more] that’s just not set in concrete, and if there are opportunities to make different investments, that we have that,” said Martinez Fischer, a member of the committee who voted against the bill. “When I take this vote, I want to be able to tell my constituents that I’m still working for money for pub ed.”
The committee’s budget proposal, which is more than 1,000 pages long, is anticipated to be discussed on the House floor just before Easter. About 700 people from around the state testified for 95 hours throughout 25 public hearings over the last six weeks, resulting in the current version.
The proposal will proceed to the Senate Finance Committee, which has been working similarly to create its version of how Texas should spend its money over the next two years after it leaves the House floor in approximately two weeks, with additional revisions anticipated.
After the Senate approves its proposal, the two chambers will meet secretly for the next month to resolve their differences before presenting a compromise bill to both chambers for a vote in late May. Following Abbott’s line-item veto power, it would then go to the state comptroller for certification that the budget is balanced as required by Texas law.
Republicans in both chambers have vowed they will not breach spending limitations that severely limit their ability to pay all the predicted $188.2 billion in general revenue due in the next budget. Bonnen said Thursday his panel’s suggestion falls within those boundaries.
Certain services, like property taxes, can evade those constraints via budget tactics, including placing spending before voters in a constitutional amendment election.
The House committee also adopted an $11.5 billion supplemental budget package that invests $5 billion of the state’s surplus during the current biennium on school safety and minimizing 2021 winter storm-related energy rate rises. The Senate approved it last week.
State authorities realized in January that lawmakers would begin their 140-day session with a treasury balance bigger than the budgets of nearly half the states, even as the nation confronts a recession. The 2023 Legislature began on January 10. The session’s only constitutional requirement is passing a balanced budget.
Compared to past versions, the new law increases general revenue spending by almost $7 billion. As initially filed, the House and Senate versions call for approximately $289 billion in state and federal money and $130.1 billion in general revenue spending for the September cycle
There are persistent calls to increase funding, including calls to provide retired state employees with a financial boost similar to what the state appears to be providing for former teachers, more funding for schools, and additional targeted raises for employees in particularly overburdened agencies.
“Turnover is higher in state government than ever, so the two 5% pay raises [for state employees over the next two years] will finally help agencies recruit and retain good employees,” said Ann Bishop, executive director of the Texas Public Employees Association, which advocates for state workers, among other groups. “We hope the budget can also include targeted raises for agencies that have identified critical needs and a pension boost for retired employees — who haven’t had one since 2001.”
The House budget’s highlight is a $17 billion school property tax buy-down. The Senate passed a $16.5 billion property tax relief plan on Wednesday, targeting homeowner taxes and mandating school districts to decrease their prices. Like the Senate, House budget writers seek to reduce property taxes with at least $5.3 billion from the state surplus.
The House’s main tax cut plan slashes school property taxes by $12 billion. The most controversial part would tighten a cap on how much a homeowner’s primary residence taxed by school districts can rise each year, which has drawn opposition from Lt. Gov. Dan Patrick and state Sen. Paul Bettencourt, the Senate plan’s Republicans, as well as tax-cut advocates and business lobbying groups.
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It also funds higher education. If public institutions keep tuition steady for two years, the law will finance the Hazlewood Legacy Program, regional public universities, and employee insurance. It also includes $650 million for a planned community college funding reform and $3.5 billion for a new endowment to assist research universities like Texas Tech University and the University of Houston.
Riders instruct legislators and agencies on how to use budget dollars. On Thursday, a rider prohibited state funding for offices that promote diversity, equity, and inclusion in hiring or on campuses.
Abbott’s office wrote to public colleges and state agencies last month, alleging DEI recruiting practices violated federal and state employment rules and prohibiting them from hiring on “other than merit.” Law experts say the governor’s office misrepresented firms’ diversity hiring policies.
Children At Risk
Last year, House budget writers authorized $33.6 million for a behavioral health center in Uvalde, the Robb Elementary School shooting site. That institution would have an outpatient clinic, a 16-bed crisis respite or residential facility for adults, and another for children.
Gov. Greg Abbott tweeted that We should return it with the largest property tax cut in the history of the state of Texas. You can see below:
Hard-working Texans produced the largest state budget surplus in Texas history.
That money belongs to the taxpayers.
We should return it with the largest property tax cut in the history of the state of Texas.#TXSOTS23 #txlege pic.twitter.com/wjMtL9SWqr
— Gov. Greg Abbott (@GovAbbott) February 17, 2023
The panel granted $23.9 million for the local mental health authority to administer the Uvalde facility and $30.5 million to extend therapeutic services for at-risk adolescents and families. The foster care provider rate increase budget is $100 million. Budget writers rejected $45 million for group home and state office residents.
Even though 44% of Texas childcare programs may close as federal COVID-19 relief payments dry up later this year, lawmakers refused to agree to a plan for more than $2 billion in the Texas Workforce Commission’s budget for childcare funding.
“The Legislature needs to provide funding to keep high-quality child care open for working parents,” said David Feigen, director of Early Learning at Texans Care for Children. “The child care crisis in Texas is getting even worse, as more and more child care providers are saying loud and clear that they are getting close to shutting down. The only question is whether the Legislature is listening.”