The preliminary budget calls for $130.1 billion in spending over two years. Lawmakers still have plenty of chances to change what’s in the budget and the Senate has yet to release its proposal.
Texas House leaders on Wednesday released the chamber’s new preliminary state budget bill for the 2024-25 biennium, proposing to shell out an unprecedented $130.1 billion in general revenue at a time when the state is awash in more cash than the constitution will allow lawmakers to spend.
The proposal appears to leave on the table more than $50 billion in available funds at a time when the state has a total of $188.2 billion in funds available for spending over the next cycle, including a historic $32.7 billion cash balance.
The Senate did not appear to have filed its version of the bill by early Wednesday, but Senate Finance Chair Joan Huffman has said it would be filed by the end of the day. Both bills are likely to change drastically before a budget is finally passed around May.
“This budget is historic, balanced, and conservative, and is the starting point for our deliberations moving forward,” Huffman said in a Tweet on Tuesday.
The 1,033-page preliminary budget bill by House Appropriations Chair Greg Bonnen was filed early Wednesday morning. It includes a section stipulating that the House will propose, in a later bill, about $6 billion in supplemental spending for the current biennium, on projects such as hospital construction, school safety and others.
Last week, the state comptroller projected the state would receive at least $108 billion in federal funds, $68 billion in dedicated state revenue from fees and other sources, and $165 billion in general revenue for lawmakers to use during the next biennium.
The $288.6 billion in all funds in the House proposal is up significantly from the $265 billion in total funds appropriated in the 2022-23 budget.
The proposal offers a first glimpse into where the chambers may be headed in funding the business of Texas. State leaders learned last week that lawmakers would be convening their 140-day session with a treasury balance higher than the budgets of nearly half the states in the U.S. — even as the nation faces a potential recession.
The 88th Texas Legislature convened on Jan. 10. Passing a balanced budget is its only constitutional obligation during the session.
Last week, Texas Comptroller Glenn Hegar said in his biennial revenue estimate that with the cash surplus and 5.7% growth in general revenue in 2024-25, lawmakers would have an unprecedented $188.2 billion available for general spending — a historic 26.3% increase from the current biennium.
Among lawmakers’ biggest budgeting challenges is that state law and the Texas Constitution limit the amount that tax spending can grow between sessions.
But some of the same Texans whose record tax payments helped put the state in such a positive position are, themselves, struggling to recover from the pandemic’s economic fallout — increasing pressure on lawmakers to use the extra cash to help make ends meet.
State leaders are pushing property tax relief and infrastructure upgrades among their biggest ambitions this session, but the requests by lawmakers and state agencies far exceed the amount of cash available for the next budget, as they often do at the start of a cycle.
Someone always leaves with less money than they asked for.
Meanwhile, as inflation soars and property taxes skyrocket, schools and rural hospitals are facing closures, state employees are leaving in droves, the power grid is vulnerable, water problems are rising, youth prisons are on the brink of collapse, and inflation is pushing many residents and state agencies past their breaking points — along with a host of other challenges across the state.
“If you count up all of the ideas, all the money — the $32.7 [billion] — is spent over like five times,” Hegar said in a Texas Tribune interview last week. “There’s just a lot of requests. … Some ideas are better than others. So they are going to have to prioritize.”
Requests by agencies for new money alone — for everything from staff raises to a new law enforcement training center — total more than $15 billion in general revenue. And some of the expected appeals for cash, like new money for child mental health programs, haven’t shown up yet in those legislative appropriations requests.
State budget officials have set the limit at a 12.3% increase based on personal income growth of Texans, population growth and inflation adjustment. That number could change as spending is adjusted in the current biennium.
It was unclear immediately from Wednesday’s bills if the drafts bust the spending limits, which were set last November around $135 billion but are subject to change as state budget leaders update their numbers this week. Several funds are exempt from the caps, and legislation could be filed later that would further shift dollars around.
There are several ways around the caps, however.
If the money is spent with the approval of voters in a constitutional election, then it is exempt from the spending limit. Reducing state-collected taxes — like sales and franchise — or reducing property taxes could also sidestep the limits.
And short of any of that, the lawmakers can simply take a vote — a political risk for some — to bust the spending caps.
Disclosure: The Texas comptroller of public accounts has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.
Photo: An aerial view of the Capitol on March 23, 2020. Credit: Miguel Gutierrez Jr./The Texas Tribune
BY KAREN BROOKS HARPER with Texas Tribune.
