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Legislative session ends

A look at Texas' proposed budget

By Megan Hempel

Daily Sun

The 86th legislative session wrapped up Monday, May 27 after 140 days, culminating in a major breakthrough for school finance and property tax reform.

The Texas Legislature advanced a $250.7 billion two-year budget Sunday, May 26 ending weeks of deliberation over how much money to spend on the 2019 legislative session’s two highest priorities: public school funding and property tax relief.

House Bill 1 now heads to Gov. Greg Abbott, who has until June 16 to veto individual line-items he objects to.

The approved $250.7 billion, made up of state taxes and fees, local property tax dollars and federal funds, marks a 16 percent spending increase over the two-year budget approved by lawmakers in the 2017 legislative session.

The House approved the spending plan with just one representative voting against, and the Senate unanimously approved the budget later Sunday evening.

School funding and property taxes proved to be the biggest sticking points between the two chambers, which began their discussions on school finance and tax reform in January using recommendations from a state-sponsored school finance panel.

In the end, lawmakers raised the price tag of their education and property tax proposals to about $11.6 billion, doing away with the mandated across-the-board pay raise.

Instead, the final proposal raises the amount of per-student funding each school district receives and mandates that 30 percent of that additional funding go toward salary increases and benefits.

Districts are expected to prioritize raises and benefits for teachers with more than five years of experience, but otherwise would have flexibility on how to offer salary increases.

On property taxes, lawmakers opted to spend $5 billion in state funds on property tax cuts — well above the $2.7 billion they originally proposed.

It is estimated that the bill would lower tax rates by an average of 8 cents per $100 valuation in 2020 and 13 cents in 2021. That would mean a tax cut of $200 for the owner of a $250,000 home in 2020 and $325 in 2021.

Lawmakers expect to have an additional $10 billion to spend over the next two years, compared with the previous budget cycle. They agreed to allocate $6.5 billion in new state funding for schools and $5 billion to buy down Texans’ local property taxes, which state dollars supplement to pay for public education.

In total, the section of the state budget that allocates funding for public schools and universities includes $94.5 billion, up 16 percent from two years ago, according to the Legislative Budget Board. Excluding money set aside to give property owners a tax break, the nonpartisan budget agency calculates the education portion of the budget to have grown 10 percent.

The budget also includes $84 billion for health and human services programs, up just 1 percent from the last two-year budget cycle. Lawmakers ordered a roughly $900 million cut to Medicaid, the federal-state health insurance program for the poor and disabled that makes up most of the state’s health care spending.

The Texas Health and Human Services Commission will be responsible for identifying cost-cutting measures. Additionally, lawmakers underfunded Medicaid’s expected costs, which will almost certainly require lawmakers to pass a supplemental spending plan in 2021 to pay leftover bills.

Lawmakers didn't spend any money from the state’s savings account, known as the Economic Stabilization Fund or “rainy day” fund, on next year's budget.

Both chambers voted to strip last-minute funds, an additional $100 million from the state savings account to expand a “surge” operation along the Texas-Mexico border.

Instead, they authorized a record-breaking $6.1 billion withdrawal from the state savings account as part of a supplemental budget, which mostly covers unpaid bills that weren't accounted for in the 2018-2019 state budget.

Not counting the withdrawal, Texas Comptroller Glenn Hegar has predicted the savings account would reach an unprecedented $15 billion over the next two years.

The supplemental budget will spend an additional $1.7 billion in state funds, mostly for leftover Medicaid and foster care expenses. The money from the Economic Stabilization Fund will mostly pay for large-scale infrastructure projects and Hurricane Harvey recovery.

Those projects include:

$1.7 billion to create the Texas Infrastructure Resiliency Fund and the Flood Infrastructure Fund, which will help local governments draw down federal disaster recovery funds and pay for long-term infrastructure projects by the U.S. Army Corps of Engineers;

$445 million to construct new state mental hospitals, including a 100-bed unit at Rusk State Hospital, a 240-bed replacement campus of the Austin State Hospital and a 300-bed replacement campus of the San Antonio State Hospital;

$100 million for school districts to purchase school safety upgrades such as doors with push bars, metal detectors at school entrances and security systems, and $11 million for Santa Fe Independent School District, which experienced a mass shooting last year that left 10 dead and 13 wounded; and

$80 million for repairs to Texas prisons and surveillance cameras at the Texas Department of Criminal Justice.

The supplemental budget includes about $220 million in state funds to help Texas pay a financial penalty to the federal government for illegally decreasing funding for kids with disabilities and avoid a future penalty.

On the web:

https://apps.texastribune.org/features/2019/house-senate-texas-budgets-2020/?_ga=2.19557439.62451468.1559592238-1631076413.1556631447

BOX INFO:

Total 2020-21 budget

Final budget

$251 billion

Doesn’t include any money from the state savings account

House

$251 billion

Includes a $2.3 billion withdrawal from the state savings account

Senate

$248 billion

Doesn’t include any money from the state savings account

School funds and teacher pay

Final budget

$6.5 billion

To increase base funding for each student by $1,020 and let school districts determine staff pay raises

House

$6.3 billion

To increase base funding for each student by $890 and pay for a roughly $1,300 minimum raise for all school employees

Senate

$6.3 billion

To increase base funding for each student by $740 and pay for a $5,000 raise for teachers and librarians

Property tax cuts

Final budget

$5 billion

An average 8-cent property tax rate cut in 2020 and 13-cent cut in 2021, without a sales tax increase

House

$2.7 billion

4-cent property tax rate cut

Senate

$2.7 billion

Up to a 15-cent property tax rate cut, but only if lawmakers and voters agree to raise sales taxes

Medicaid

Final budget

$66.5 billion

Pays for new projected patients, requires cost cuts

House

$68.6 billion

Pays for new projected patients

Senate

$67 billion

Pays for new projected patients, requires cost cuts

Mental and behavioral health

Final budget

$4.4 billion

For programs outside of Medicaid and the Children’s Health Insurance Program

House

$5 billion

For programs outside of Medicaid and the Children’s Health Insurance Program

Senate

$4.1 billion

For programs outside of Medicaid and the Children’s Health Insurance Program

Early childhood intervention

Final budget

$342 million

Partially funds the health agency’s request

House

$373 million

Fully funds the health agency’s request

Senate

$313 million

Partially funds the health agency’s request

Judicial salaries

Final budget

$256 million

Restructures salaries, including pay raises for some, dependent on a reform bill being signed by Gov. Greg Abbott

House

$244 million

Includes a 10% salary increase, dependent on a reform bill passing

Senate

$222 million

Does not include a salary increase

Prison guard and parole officer pay raises

Final budget

$84 million

Would pay for salary increases given out at the Texas Department of Criminal Justice’s discretion

House

$168 million

Would provide a 10% salary increase for prison guards and some parole officers

Senate

$86 million

Would provide a 5% salary increase for prison guards and parole officers

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