IssuesState HouseState SenateTaxes & SpendingThe SessionTexas Budget Grows by Almost $15 Billion

Texas' 2020-2021 biennium budget is awaiting Governor Greg Abbott's signature and is the only piece of legislation that must be passed each session.
May 29, 2019
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A few weeks ago, we took a look at what the recommended budget would look like compared to past years. With House Bill 1 not finalized at that point, the final product was unclear.

But now, a couple of days after sine die, the budget for the next biennium is only a governor’s signature away from being finalized.

The budget tops a quarter-trillion dollars in spending for the first time in Texas history.

Four of the five largest expenditure categories — Health & Human Services, Public Education, Business & Economic Development, Higher Education, and Public Safety & Criminal Justice — increased, and two of those increased (HHS and BED) but stayed below the inflation rate of 1.8 to 1.9 percent.

The largest increase was in public education, which jumped over 20 percent. This is largely due to the $11.5 billion SB2/HB3 deal struck by the Legislature last week on property taxes, increased teacher pay, and school finance.

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Additionally, the Transportation budget, which is treated as a subsection of the Business & Economic Development category, increased almost 17 percent. Higher education received $8.1 billion, a 12 percent increase from the last biennium.

Over a quarter of the budget goes toward Medicaid funding (included in the HHS category) — which Governor Abbott has thus far declined to expand under Obamacare. Nevertheless, Medicaid spending increases from the last biennium by $800 million.

Each of these categories has contributed significantly to the 30 percent increase in the overall budget since the 2012-2013 biennium. But other categories increased as well.

When it comes to the border, HB 1 appropriates $800.6 million for security purposes.

Specific purposes stated include establishing a 50-hour work week for all DPS commissioned officers; anti-gang and human trafficking initiatives; camera maintenance for Operation Drawbridge, a campaign to monitor the border; a new Cameron County tactical training facility; and additional funding for the Transnational Intelligence Center.

The Texas Legislature also included funding for natural disaster relief and flood insurance. A total of $3.5 billion was appropriated to the Economic Stabilization Fund (also known as a “Rainy Day” fund) for various repairs incurred during Hurricane Harvey in 2017.

One such use is $806.5 million for public schools damaged by the storm.

Other uses include $74.8 million for college campuses damaged; $350.5 million to reimburse state departments such as Department of Public Safety, General Land Office, the Health and Human Services Commission, and the Texas Forest Service for costs associated with disaster response; and $1.68 billion for the Flood Infrastructure Fund and the Texas Infrastructure Resiliency Fund for relief and flood mitigation projects.

According to the National Hurricane Center, Harvey is tied with Katrina at the top of the list with $125 billion in estimated damages.

In the aftermath of the Santa Fe school shooting, Texas officials made school safety and state-backed mental health initiatives a priority as well.

Governor Greg Abbott even included it as an emergency item in his 2019 State of the State address.

The legislature responded by appropriating $343.5 million to projects such as mental health initiatives, infrastructure enhancements, and a $99 million Mental Health Consortium that will look to address the mental health issues of students despite concerns from some corners that it infringes on parental rights and the privacy of students.

The state’s Child Protective Services program (CPS) received a $3.8 billion boost. This comes after a tumultuous time of overbearing caseloads, rising child deaths from abuse and neglect (notably, nearly a 25 percent increase from 2017 to 2018), and court rulings that the system is unconstitutional.

The department’s head also announced yesterday that he will be stepping down.

The budget also appropriates $6.9 billion for “adult incarceration,” most of which goes to the Texas Department of Criminal Justice for its functions. Other items include $34 million for a judicial salary increase, a decrease of 8.2 percent in Trustee Program funding, and $4.2 billion to service the state’s debt.

Some conservatives believe the state has spent too much, even going so far as to release their own budget plan. That plan would have the state spend $234.1 billion — a seven percent decrease that also includes property tax caps and a similar buydown. However, state leaders moved outside the scope of the Conservative Texas Budget in order to reach the deal announced last week.

The Center for Public Policy Priorities (CPPP) listed some issues it sees in the budget.

Luis Figueroa, legislative and policy director for CPPP, pointed out in a statement that, “Devoting $5 billion of the big new school finance law to “buying down” school property taxes was the wrong priority, especially since the state commitment gets even bigger after 2021.”

He also added that it has no continual source of income for schools in future budgets.

Despite this and other qualms, Figueroa and CPPP are pleased that the 86th Legislature passed significant school finance legislation that increases teacher pay and provides taxpayer funding for prekindergarten to eligible low-income households. 

Texas had the overall fourth-best rated economy in 2017 with a five percent GDP growth rate and is the third-highest spending state in the nation with almost $275 billion in state and local government spending.

Texas has also been able to boast 108 straight months of job growth as its economy has become the 10th largest in the world.

Governor Abbott still could utilize the line-item veto — vetoing certain sections of the bill without vetoing the entire thing — should he choose to do so.

The governor has until June 16 to veto bills passed by the Legislature.

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Brad Johnson

Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad chairing the Edmund Burke fan club.