(Austin) Members of the Senate approved without dissent Tuesday a plan that would spend $116.8 billion in non-dedicated state funds for state services through 2021. The bill sets aside $6.3 billion to cover an across-the-board public school teacher and librarian pay raise and funding to cover education reform. It also earmarks almost $3 billion towards property tax relief, a priority that must be addressed, said the Senate’s lead budget writer. “We must take action this session to provide lasting, meaningful property tax relief,” said Flower Mound Senator and Finance Committee Chair Jane Nelson. “The budget sets aside $2.7 billion for that purpose and it will conform to whatever solution for tax relief is agreed to this session.” Including federal money, dedicated general state revenue and all other funds, the Senate approved $247.7 billion to cover state expenses for the next two years. “And it does so, all of that, within all constitutional spending limits and it stays within population times inflation,” said Nelson. She said the Senate proposal would leave $1.3 billion in the state treasury and $11 billion in the rainy day fund.
Public education, as always, makes up the bulk of state spending, accounting for 55 percent of state general revenue spending in the Senate budget. That includes the $4 billion for the $5,000 teacher pay raise and $2.3 billion to fund the forthcoming Senate education reform bill. Education Committee chair and Friendswood Senator Larry Taylor led the markup process for the public school budget. Though the details haven’t been worked out yet, he says that funding, plus the $2.7 billion for property tax relief, represents a significant investment in improving public education in Texas. “We don’t often increase anything by $9 billion,” said Taylor. “What we’re working on this session is landmark, to improve educational outcomes for all our kids.” The final education reform proposal hasn’t been heard in committee, but Taylor did offer previews of where he intends that money to go. In addition to more for dual-language and compensatory education, he said there will be more money for early education through 3rd grade. “Up to 3rd grade, kids are learning to read, then from the 3rd grade on they’re reading to learn,” said Taylor. He said the education reform bill will incentivize reading proficiency for children in pre-kindergarten through third grade.
The next largest chunk of the budget is healthcare spending. The Senate proposes spending almost 30 percent of biennial general revenue on health and human services, for a total of $33.8 billion. That’s less than was appropriated last session, almost three percent, but including federal funds, total healthcare spending is actually up 1.3 percent. That’s due to how the federal government calculates fund matches for Medicaid and other state health programs through Federal Matching Assistance percentages (FMAP), said Health and Human Services Committee chair Senator Lois Kolkhorst of Brenham. It’s calculated based on state per capita income in comparison to average national per capita income levels, and that means more money in the next two years. “Texas will receive a more favorable FMAP result, and that will result in a higher proportion of the program being funded by federal funds, which more than offsets the decrease to general revenue,” she said. Kolkhorst says that the change in FMAP will bring $1.7 billion in additional federal Medicaid funds next biennium.
The next step in the process is a conference committee, where members of each chamber will hash out the differences between the House and Senate bills. One potential area of contention is already resolved as both proposals include $9 billion for education finance reform and property tax relief. Though there are still many details to work out in that regard, agreement at this stage on the level of spending for the session’s top two issues removes what could have presented a significant obstacle in negotiations between the two chambers.
The Senate will reconvene Wednesday, April 9 at 10 a.m.