Issues

House Bill 1, the base appropriations bill, was filed in the Texas House of Representatives by Rep. Warren Chisum (R - Pampa), Chair of the Appropriations Committee.

The introduced version of the Appropriations bill (HB 1) totals $147.6 in all funds. This is an increase of $5.2 billion or 3.7 percent when compared to 2006-07. This growth rate is less than 1.9 percent per year, far below the anticipated population growth plus inflation.

House Bill 1, excluding property tax relief, is estimated to be $5 billion below the 13.11 percent spending limit adopted by the Legislative Budget Board (LBB). 

As filed, the base bill totals $70.1 billion in general revenue funds. This is an increase of $4.6 billion or 7.0 percent when compared to 2006-07 general revenue spending. Approximately $2.7 billion of this increase is attributed to fiscally conservative accounting measures.

The base bill reduces most state agency's administrative budgets by 5 percent with some exceptions in higher education, judiciary and regulatory agencies.

Public education funding increases by $2.0 billion in general revenue to fund enrollment growth, enrichment, teacher pay raise, the high school allotment, and teacher incentive programs. Other education funding includes math textbooks for all grades and an increase in the Teacher Retirement System (TRS) contribution rate from 6 to 6.4 percent to bring the TRS fund closer to actuarial soundness. The TRS fund is projected to be actuarially sound during fiscal year 2008 if the fund meets market expectations

When the costs of property tax relief are taken into consideration, an additional $14.2 billion will be added above these amounts to public education appropriations making this area by far the largest function in the state budget.

Higher education funding increases by approximately $0.6 billion in general revenue to provide for enrollment growth, tuition revenue bond debt service, health care cost increases for Higher Education Group Insurance, start up funding for the El Paso Medical School, operating costs for the Rangel School of Pharmacy, and a statutorily required increase to the Higher Education Fund.

Health and human services funding increases by approximately $1.7 billion in general revenue to fund anticipated caseload growth associated with Medicaid, CHIP, foster care, adoption subsidies, as well as child and adult protective services reform.  

The base bill also provides funding for bond debt service to cover current obligations across all state agencies, projected correctional population increases, and increased funding for the Attorney General as a result of decreased federal child support revenue. 

A separate Property Tax Relief bill (HB 2) has been filed which will make a $14.2 billion appropriation to the Texas Education Agency to fund property tax relief. This appropriation will consist of $8.1 billion from the Property Tax Relief Fund and $6.1 billion from general revenue. 

This bill will reflect the cost of providing $0.50 of property tax relief ($1.50 to $1.00 per $100 valuation) for the 2008-09 biennium. 

Thus the property tax relief provided during the last special session, even when netted against the anticipated revenues from the business tax and the cigarette tax represents a total tax reduction of over $6 billion for the 2008-09 biennium. 

The Comptroller of Public Accounts, Susan Combs, released the Biennial Revenue Estimate (BRE) for the 2008-09 biennium indicating $14.3 billion more general revenue is available compared to 2006-07 budget amounts.

By exercising fiscal discipline over the past two biennia, job growth in the state and a robust economy, Texas has gone from a $10 billion deficit to a $14.3 billion surplus - a $24.3 billion upswing.   

Of this 'new money' cited by the Office of the Comptroller, there exist two components.  Approximately $7.0 billion is related to fiscal year 2006-07 surplus funds, while the remaining $7.3 billion is projected growth in revenues over the 2006-07 biennium.

The 80th Legislature will face major spending demands including the anticipated enrollment growth in public and higher education, the cost of border security, the increasing numbers of individuals on Medicaid, and the prison inmate capacity issues. All of these increases in caseloads, enrollments and numbers will require funding from this 'new money.'

Traditionally, appropriations bills are numbered HB 1 in the House and SB 1 in the Senate. The House and the Senate alternate whose bill will be the "lead bill."  Since SB 1 was the lead bill during the 79th session, then the final General Appropriations Act this session will be based on HB 1.

Throughout the session, the House will hold hearings daily to take testimony from experts and interested parties regarding funding for state agencies and state universities under review.

The House Appropriations Committee also appoints several subcommittees to allow for a more thorough review and consideration of specific issues.

The appropriations base bill is upwards of 910 pages and is organized by articles.  Articles are based on functional areas of state government.  They include:

Article I - General Government
Article II - Health and Human Services
Article III - Education
Article IV - The Judiciary
Article V - Public Safety and Criminal Justice
Article VI - Natural Resources
Article VII - Business and Economic Development
Article VIII - Regulatory
Article IX - General Provisions

The base appropriations bill can be accessed online via the Legislative Budget Board (LBB) Web site, www.lbb.state.tx.us. The LBB is a permanent joint committee of the Texas Legislature that develops recommendations for legislative appropriations for all agencies of state government.