86th LegislatureIssuesState HouseState SenateTaxes & SpendingLegislature’s Budget Proposal a Steep Increase from Past Years

Texas’s budget has grown significantly as the state has experienced booming economic and population growth. Since the turn of the century, Texas’ biennial expenditures have increased 113.5 percent which equates to over $115 billion. Part of this can be explained by inflation, as the inflation rate year to year has not been negative since 1954.

Sometimes, the percentage increase in biennium spending outpaces the inflation rate — such as in 2014-2015 when the inflation rate was 0.8 and 0.7 percent respectively, while the spending increased over 6.5 percent. But sometimes, the reverse is true — like the 2018-2019 biennium in which spending increased roughly 0.3 percent, and inflation sat just below two percent each year.

The four largest categories making up the state’s total expenditures are, in order: Health & Human Services, Public Education, Business & Economic Development, and Higher Education. Each category increased, albeit moderately so, from the 2016-2017 biennium to the 2018-2019 one — except for one, Health & Human Services which decreased by 2.47 percent.

The fifth-highest category — Public Safety and Criminal Justice — also decreased by 2.14 percent in the same time period, while Transportation spending increased7.6 percent.

The overall increase was 13.6 percent since the last biennium.

Rep. Mike Lang (R-Granbury), who also serves as chairman of the Texas Freedom Caucus, said of the budget, “I am hopeful that the Senate will bring us back a tighter budget. It’s not perfect, but it has some really good things in there that will help us reduce robin hood, fix school finance, and lower property taxes.”

The suggested estimates for the 2020-2021 biennium released in January follow the same overall trend of spending increases. Total proposed expenditures will increase by 14 percent and exceed $247 billion. The largest percentage increase for the new biennium is in Public Safety & Criminal Justice at a rate of 25 percent. The state’s largest overall category, Health and Human Services, will increase by roughly 7.5 percent, to the tune of nearly $6 billion for a total of almost $85 billion.

Under the plan released in January, Higher Education funding would also increase 2.85 percent.

Both the House and Senate approved their own plans, which exceed the original proposed budget. Once a plan is adopted in conference, both chambers must approve it before it moves to Governor Abbott’s desk. All of this must happen before May 26, which is the cut off date for legislation to be passed by the legislature.

In conference, figures may change even more from the original plan released in January. But those changes must be approved by both the House and Senate.

One aspect that could significantly affect the budget is the outcome of the school finance debate. Each chamber is in agreement on giving teachers a pay raise, but both remain divided as to how much that raise should amount to and the way it should be structured.

Lt. Governor Patrick has stated his resolve to implement a $5,000 per-year raise for teachers and librarians over the biennium. House Bill 3 would implement a $1,850 per-year raise, but to a broader base of public school employees.

The Senate passed HB 3 yesterday in a 26-2 vote, but inserted language providing for Patrick’s preferred teacher pay raise of $5,000. Sens. Charles Schwertner (R-Georgetown) and Brandon Creighton (R-Conroe) both opposed the measure due to a lack of a fiscal note.

Sens. Bob Hall (R-Edgewood), Angela Paxton (R-McKinney), and Paul Bettencourt (R-Houston) recorded “present, not voting” on the bill, echoing their previous protest of the process during HB 3’s committee markup.

HB 3 also included nearly $780 million in spending for full-day pre-K to eligible low-income children.

The Texan reached out to Lt. Governor Patrick for comment on the overall spending trajectory, but his office did not reply. We also requested comment from HB 1 author, Rep. John Zerwas (R-Richmond), and Rep. Chris Turner (D-Grand Prarie), the House Democratic Caucus chair, for their perspective on Texas’ spending trajectory. Neither replied for comment.

Texas continues to surge in both population and revenue, with few exceptions. Such growth does provide the opportunity for elected officials to spend more. But as with any budget debate, the focus on spending also necessitates a conversation on revenue and what taxes or fees are utilized or increased to offset any spending increases.

The trajectory of the Texas budget could easily result in future Legislatures having to make tough decisions on programmatic cuts and whether increased spending should occur at all, particularly if key sources of government revenue, such as property taxes, continue to have onerous effects on everyday Texans.

With under a month to get a budget passed, time is of the essence for the 86th — unless of course a special session is called.

Lang concluded with, “We didn’t get here overnight, and we won’t get where we want to be overnight either. There is no silver bullet, but conservatives are working hard to get a good budget and it’s important to know that the legislative process is very fluid. It’s not over until it’s over.”