Texas House offers budget blueprint that flat-lines spending and ends gas tax diversion

The following story originally appeared on The Quorum Report.  

As Gov. Perry was saying farewell to the Texas Legislature on Thursday in a speech largely about his accomplishments over the past 14 years, Texas House leadership was looking toward the future by offering a budget roadmap that would barely increase spending – essentially flat-lining it – and will leave plenty of room for a robust debate about tax relief, education funding, and more.

“It’s very much a starting point,” one House official told Quorum Report.

The House Introduced Budget, the base budget proposal required by law to be put on the table early in the session, would nominally increase spending by 0.2% with a boost in general revenue spending of about 4%.

The proposal, which also takes no money from the Economic Stabilization Fund, would spend $98.8 billion from general purpose revenue, well under the $113 billion in revenue estimated for the biennium by Comptroller Glenn Hegar. It is also well under the $107 billion cap created by constitutional constraints. The budget proposal would spend a little more than $202 billion in both state and federal dollars, or “all funds” as we say around the Capitol.

Of course there will be much discussion in the coming months about all that’s in this massive document. So for right now, we’ll take you through just a few of the highlights.

The biggest drivers of the nearly 4% increase in general revenue spending would be paying for the Department of Public Safety out of GR funds, which is about $900 million, and an increase in the Medicaid caseload – an estimated $1.8 billion.

Public education advocates likely will not be satisfied with this proposal. While it fully funds enrollment growth with $2.2 billion, those traditional allies of public ed will want more than that. It is not likely that Republican leaders will put more money into public education, though, until the school finance case has completely worked its way through the courts. Local property values have gone up significantly more than had been expected, we are told, which reduces the state’s legal obligation to provide nearly as much of this kind of help to local districts.

Border security is funded at a significant level, keeping the “super surge” of DPS troopers along the Rio Grande for the next two years. There has been some talk of continuing to fund the National Guard’s operations along the border – something favored by Lt. Gov-Elect Dan Patrick – but, that is not in this document. The cost of keeping DPS on the border over the next two years is $393 million.

The House is recommending no new money for Gov. Perry’s business luring pots of money: The Texas Enterprise Fund and the Emerging Technology Fund. The TEF is expected to have about $30 million left on hand at the end of the fiscal year. The ETF will have about $32 million. Funding for both programs will be contingent on legislation aimed at “increasing transparency and accountability,” House leaders said.

The Public Integrity Unit housed in the Travis County District Attorney’s Office would get the $6.6 million requested by prosecutors. But, that money would also hinge on legislation.

Given the numbers, tax relief in whatever form lawmakers wish to pursue it, is certainly on the table. “At some point in time during the session, there will be a serious discussion about tax relief," said the House official who spoke with Quorum Report.

“This plan proves that the Texas House remains serious about fiscal discipline,” Speaker Joe Straus, R-San Antonio, said in a statement. “We are able to hold spending in check while addressing some very important challenges related to our rapid growth.”

You can check out the entire proposal from the House by clicking here.

Meantime, Rep. John Otto, R-Dayton, on Thursday proposed a constitutional amendment called House Joint Resolution 8 that would change how the cap is calculated for the Rainy Day Fund and would dedicate any money collected over that cap to be spent on buying down debt. As you may be aware, any money right now that might exceed the RDF’s cap is returned to general revenue.

Copyright January 15, 2015, Harvey Kronberg, www.quorumreport.com, All rights are reserved. Reprinted with permission.