Texas budget cuts taxes, plays up border, mental health, parks, school safety. ESAs?

AUSTIN — Texas would significantly bolster mental health, school safety and state parks under a spending plan laid out by House and Senate budget negotiators.

The budget package salutes the GOP’s priorities of tax cuts, border security and a pet idea of school voucher proponents known as education savings accounts — though passage of a bill creating the accounts isn’t assured.

The budget package irks educators and advocates of greater spending on health coverage and child care because it would leave gobs of available money on the sidelines. If voters approve, though, it would spend $5 billion to give teachers who retired in the last 19 years their first cost of living increase — ever — as well as supplemental checks to most.

After weeks of secretive deliberations, a 10-member conference committee on Thursday unveiled a two-year budget that would spend $321.3 billion, counting non-tax revenues and federal funds.

Homeowners and other real estate holders would receive $12.3 billion in new school property tax relief, along with $5.3 billion that continues cuts in school tax rates set in motion by legislation from 2019.

The budget doesn’t specify whether the $12.3 billion would be used to further reduce rates or to increase homestead exemptions on school taxes. However, a provision says the relief is contingent on passage of a separate bill and resolution calling for a constitutional amendment vote on Nov. 7 — which suggests an increase in the homestead exemption is not dead.

It’s unclear if the current 10% cap on increases in homesteads’ appraisals will be tightened, as the House wants. Documents spelling out the two chambers’ compromises on the budget package are silent about appraisal caps, a change to which also would require voters’ blessing.

This year, budget writers started from an enviable position — a surfeit of money that some called historic.

In the cycle that ends Aug. 31, Comptroller Glenn Hegar projects a record-breaking $32.7 billion revenue surplus, partly a result of Texas’ rapid economic rebound from the COVID-19 outbreak, higher inflation and GOP leaders’ hoarding of federal pandemic aid.

Meanwhile, the oil and gas industry is thriving, which has fattened the state’s “rainy day fund.” Hegar has forecast continued economic growth.

Spending most of the available new money was never a possibility. Days after the November midterm elections, Lt. Gov. Dan Patrick said the Senate wouldn’t even consider busting a constitutional spending cap, even though much of this session’s new spending was clearly ticketed for tax relief.

To lessen the stiffest property tax, which is levied by school districts, the Legislature makes the districts whole with additional state funds. In 2007, each chamber voted by simple majorities to exceed a “tax spending limit” approved by state voters in the late 1970s.

Public schools, vouchers

For public schools, the budget lists nearly $8.7 billion of new general revenue, including $500 million for the education savings accounts, or ESAs, a top priority of Gov. Greg Abbott and Patrick. The House has not yet embraced the school choice crusade.

More than half of the boost for schools depends on passage of other bills, such as a tripling of the current school safety allotment, up to $150 million a year from $50 million now. A second, “supplemental” spending bill has $1.1 billion for grants for fences, doors, windows, communications systems and other “school hardening” investments.

Almost $4 billion of the new money for schools would depend on whether measures increasing “financial and other assistance to public school educators” and bumping up unspecified school funding formulas pass through the Legislature.

While some of that apparently would involve teacher pay bumps, teacher groups who’d pleaded for $15,000 across-the-board raises were furious over what they called tightfisted treatment amid abundance.

Texas AFT president Zeph Capo said the budget deal contains “no raises for public school employees” and no increase to the basic allotment, which has been frozen for four years at $6,160 per student.

“Congratulations to Commissioner Mike Morath, the only person associated with Texas public education to receive a pay raise in this budget,” he said in a statement.

Capo was referring to the former Dallas school trustee, whom Abbott named as head of the Texas Education Agency. Budget provisions raised the maximum the TEA commissioner could be paid to $325,000 a year. Morath is — and will continue to be — paid $220,375, said agency spokesperson Jake Kobersky. The cap’s been increased before, and Morath hasn’t taken the raise, he said.

Retired teachers

Teachers who retired since Sept. 1, 2004, have never gotten a pension check bump for inflation.

But under a proposed constitutional amendment, public school employees who have been retired for between three and nine years would receive a one-time 2% increase if voters approved it.

Those who’ve been pensioners for between 10 and 21 years would get 4% more; and those who’ve been retired for 22 years or more, 6%.

Also, retirees who are 70 to 74 years old would get a one-time “13th check” of $2,400, and those 75 or older, $7,500, House Appropriations Committee Chairman Greg Bonnen explained to colleagues Thursday.

“These senior retirees have extremely modest retirement benefits,” said Tim Lee, executive director of the Texas Retired Teachers Association. The supplemental checks will go out, whether or not the constitutional amendment passes, he said.

Border security

On border security, the money is spread across the next budget and a “supplemental” appropriations bill that would spend $19 billion, counting federal funds, across dozens of programs. It would plug some holes in the budget the Legislature wrote in 2021 but also launch new initiatives.

Together, the bills would spend $5.4 billion for the beefed-up National Guard and Department of Public Safety presence and other state activities at the Texas-Mexico border that began in March 2021. That’s up from an estimate in January of $4.3 billion for the current cycle.

A state border wall being built by private contractors hired by the Texas Facilities Commission would receive $1 billion. A $6.6 million National Guard tuition assistance program would give priority to soldiers who served in Abbott’s two-year-old Operation Lone Star.

Included in the $5.1 billion of border spending in the budget is a “contingency appropriation” for a bill creating a new Texas Border Force and making “improper entry from foreign nation” a new state crime.

If the bill passes and becomes law, $100 million will become available for the border. Of that, $36 million would go to Attorney General Ken Paxton’s office to hire 10 employees who would create and administer a new Landowner Compensation Program for owners of ranches and other property along the Rio Grande River. The remaining $64 million would go to DPS, to buy technology and equipment for the border force.

Mental health, North Texas psychiatric hospitals

In mental health, the supplemental bill contains more than $2.2 billion, mostly for new facilities and the budget has $5.8 billion for ongoing treatment programs in the next two years.

Dallas would get the final tranche of taxpayer money for construction of a new state mental health hospital, though not the requested start-up funds, and Terrell State Hospital would receive funds for a replacement campus.

In Dallas, the Texas Behavioral Health Center at UT Southwestern would receive from the supplemental bill $101.9 million for completion of 200 adult beds. Of those, at least 75% of the beds would have to be used for forensic purposes, or assessments of whether a criminal defendant is competent to stand trial.

Cumulatively, the state in recent sessions has plunked more than $384 million into the center’s construction. Separate from the state budget, Dallas-based Children’s Health is chipping in $200 million of its own money for a 96-bed pediatric unit that is being designed.

The Terrell facility, which was the state’s second public psychiatric hospital when it opened in 1885, would receive $573 million for a 250-bed replacement campus. The Senate, which ignored a House proposal for 308 beds, succeeded in allocating the 250 beds: 50 maximum security, 140 forensic, 35 adolescent and 25 civil.

State park expansion

Marking the 100th anniversary of Texas state parks, the budget would provide $1 billion for a centennial parks conservation fund, subject to passage of separate legislation and voter approval of a constitutional amendment.

Last year, Dallas businessman and conservative activist Doug Deason joined Austin environmental leader Luke Metzger in launching a push to use $1 billion of the state’s surplus on parks. Texas ranks 35th in state park acreage per capita.

More immediately, the Parks and Wildlife Department would receive $125 million from the supplemental for land acquisition for parks.

Other new ‘investments’

Leaking water pipes lose 572,000 acre-feet of water a year in Texas, enough to supply Austin, Fort Worth, El Paso, Laredo and Lubbock combined, according to Uvalde Democratic Rep. Tracy King. He’s the House author of legislation to create a $1 billion Texas Water Fund. Voters would have to approve a proposed constitutional amendment.

The Water Development Board would get $750 million for flood mitigation and water projects under the supplemental bill.

That bill also would hand Abbott $698 million for a Texas Semiconductor Innovation Fund, which would draw down federal matching money in the CHIPS Act recently approved by Congress.

Also greenlit in the supplemental bill is a $3 billion cash infusion into a new Texas University Fund. If voters approve a constitutional amendment, the new endowment would help the University of North Texas system, as well as the Texas Tech, University of Houston and Texas State systems.

‘Red meat’ budget items?

A controversial program that gives state money to nonprofits urging women not to have abortions would receive a 65% increase in funding, even as Texas has virtually outlawed the procedure.

Alternatives to Abortion, which provides pregnancy support services and now gets $50 million a year, would receive $82.5 million annually under the proposed appropriations.

The final budget deal also embraces a Senate provision that bars spending of any Medicaid money on “gender reassignment procedures, treatments, therapies and surgeries performed to transition individuals.” The prohibition would apply to all low-income adults and children enrolled in Medicaid.

Also, an election audit division at the Texas Secretary of State’s office, which now has about a dozen employees, would be authorized to hire 19 more. Unlike the audits of Dallas, Collin, Tarrant and Harris counties that were released late last year, audits required by the “election integrity” bill passed last session will look at more than general elections — every school board, city and bond election would be reviewed as well. And they will go back two election cycles, not one.

While budget conferees accepted a House provision directing state health department officials to seek federal funds to stockpile drugs and protective equipment for the next public health emergency, the 10 lawmakers went with the Senate on this rider:

“None of the General Revenue funds appropriated to the Department of State Health Services (DSHS) may be used for the purpose of promoting or advertising COVID19 vaccinations in the 2024-25 biennium.”

New DMV title office for Dallas

The Department of Motor Vehicles got a green light to open and staff a second North Texas office for vehicle title replacements and title history searches. The existing one in Carrollton is overwhelmed. A second “regional service center” in the seven-county area probably would be located south or southeast of Dallas, a department spokesperson said.

The final budget has $3.5 million and eight new employees to help launch new regional title offices in Dallas and Houston.

What’s next

The two spending bills now head to both chambers for an up-or-down vote this weekend. First, though, in a move that’s only rarely challenged, chief budget writers Sen. Joan Huffman and Bonnen, both Houston-area Republicans, will seek passage of resolutions approving how the negotiators went “out of bounds” – basically, adding stuff – to cement the deals.

The budget is the only bill the Texas Constitution requires the Legislature to pass. The session ends Monday.