Leaders in both the House and Senate filed budget bills for their respective chambers early this week.  It’s important to remember that the filed version is a starting point, and there will be much discussion and change between now and final adoption of the state budget.

Overall budget numbers

The House bill would appropriate $89.1 billion in General Revenue for the upcoming biennium, while the Senate for the first time in recent history, offered a slightly more conservative budget than the House that would appropriate $88.9 billion in General Revenue. 

In order to maintain the same level of services during the upcoming biennium, State agencies have requested a combined $96 billion in general revenue. Comptroller Susan Combs announced last week that the state will have $101.4 billion with which to fund the next biennium — $92.6 billion in revenue and $8.8 billion in surplus from the current biennium.  On top of that, lawmakers will have projected $11.8 billion in the Rainy Day Fund, and no bill has been filed to make an appropriation out of that fund, which is now nearing its constitutional limit.

A supplemental appropriations bill is expected to address the deferred August 2013 Foundation School Program payment, as well as the underfunding of Medicaid and some other costs.  That bill is expected to spend $6.8 billion, which spends most of the surplus and will increase the amount of spending under the State’s constitutional spending limit (which both budget bills already spend well below now).


Public Education Budget

Both bills cover enrollment growth in schools, but they do so at current per WADA levels, without any restoration of the $5.4 billion funding cuts to schools made last session.  The reductions to the formula through the Regular Program Adjustment Factor (RPAF) as well as the reduction to Additional State Aid for Tax Reduction (ASATR) were both maintained at the levels used in the current budget.  This means that while ASATR funding was not restored, the filed versions of the bill begin with the current year’s ASATR level (92.35 percent of funding), rather than an additional reduction. 

The cost of enrollment growth for the additional 85,000 students that will be added to the public school system during each year of the next biennium and funded in both introduced bills is estimated to be $2.2 billion, which represents an increase in spending of about 1.8 percent.  As part of this funding, it is assumed that property values will increase by 2.22 percent in tax year 2013 and 1.85 percent in 2014, which Moak Casey & Associates reports is expected to bring a savings to the State of $1.5 billion over the next biennium. This increase in values will of course amount to increased recapture.

One item of particular note in the House version of the budget (House Bill 1) is that the proposal contains no funding for the State of Texas Assessments of Academic Readiness (STAAR). This signals legislators’ willingness to have a serious discussion about making changes to the state assessment system.  The Senate version of the budget contains funding for state assessment at the current rate of $82.6 million per year, but does not include the additional funding requested by TEA.

An annual appropriation of $421 million was included in both bills for the Instructional Materials Allotment.

The grant programs that were cut last session, such as the Student Success Initiative, teacher incentives, and pre-kindergarten, were not restored in the budget proposals.  In fact, they faced further threats.  The $40 million for the District Awards for Teacher Excellence is included, but TEA is given authority to use $8 million of that appropriation to fund Project Share, rather than make awards to individual districts.  What is left of the Student Success Initiative was reduced by another $3.5 million.

One exception to the lack of restoration of special program funding is found in the House budget, where funds supporting the Communities in Schools program saw a proposed increase of $12.6 million (the Senate cut CIS by $400,000 instead).  The Best Buddies program received a new $400,000 rider in both versions of the bill.

The $1.3 million appropriated for steroid testing was maintained in the Senate plan, but completely eliminated in the House proposal.

All the documents associated with the appropriations bills can be found on the Legislative Budget Board site at www.lbb.state.tx.us.   More information about the budget proposals and when legislators will begin discussing them will be provided as we become aware.

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