The Senate Finance Committee this week began a string of meetings to flesh out plans for a Texas state budget for the next two years. Following an organizational meeting on Monday, the committee began hearing testimony Tuesday on Article III of the budget, which includes public education. Both in her written statement and over and over again in comments during Monday’s and Tuesday’s hearings, committee chairwoman Sen. Jane Nelson (R-Flower Mound) called Senate Bill (SB) 1 a “starting point” from which the senators on the finance committee, and eventually the entire Senate, can work to produce the Senate’s eventual budget proposal.
So where did Chairwoman Nelson and her colleagues start?
On Monday, Nelson began by laying out a budget that spends roughly $3 billion less in general revenue than its predecessor over the last biennium (House Bill 1 of 2015) and $4-6 billion less than would be needed to maintain the level of services funded during the current biennium considering inflation and population growth. She also started lowering expectations by laying out a budget proposal that spends about a billion dollars less than the revenue the state is projected to bring in, according to the comptroller.
While the numbers were not promising, the chairwoman also started the process by announcing two work groups that would be tasked with proposing solutions for two of the state’s most pressing budgetary and policy trouble areas, school finance and the out-of-control cost of health care. The two areas of the budget that these issues impact account for more than 85 percent of the state’s discretionary budget.
On Tuesday, the actual work of going through the budget one agency at a time began. First up; Texas Education Agency (TEA), which includes the $42 billion Foundation School Program (FSP), followed by the Teacher’s Retirement System (TRS), and Texas’s schools for the visually impaired and the deaf.
Several members of the committee spent the majority of Tuesday morning trying to prove, while convincing no one, several points: (1) That the state is not under-funding education; (2) thet neither local property taxes nor recapture dollars have been spent outside of the education budget; and (3) that high property taxes and the disparity between significant increases in local revenue dedicated to education versus much smaller increases in state revenue going to education should be blamed on local tax assessors and school boards, not the legislature. The committee also heard from TEA staff about spending on the various projects administered by the agency outside the Foundation School Program. Many of these standalone programs are funded at levels below the current biennium, and several have been zeroed out completely in the base budget.
Tuesday afternoon, the committee heard from the Commissioner of Education and from executive directors of TRS, the Texas School for the Visually Impaired, and the Texas School for the Deaf. Each presented their exceptional items, budget requests above and beyond the agencies’ base budget needs. Brian Guthrie, the executive director of TRS, had the most challenging reception from the senators, several of whom would like to abandon Texas’s defined benefit pension system and replace it with a defined contribution 401(k)-style system that would both reduce state liability and result in increased profits for wealthy campaign donors. Ultimately, Sen. Joan Huffman (R-Houston) redirected questioning away from the TRS pension trust fund, which is in reasonably good health, and toward the separate TRS-Care health insurance fund, which over the years has become unsustainable in its current form and will run out of money in the upcoming biennium without significant structural changes and increased funding.
After the committee concluded the testimony from the state agency heads, they heard public testimony, including from ATPE. In addition to a general plea for prioritizing education spending, we requested the committee’s consideration in three specific areas. First, we asked that the senate approve TEA’s full funding request of $236 million for the high quality pre-kindergarten grant created last session, for which the current draft of SB 1 provides only $150 million. Second, we asked that the legislature increase state funding for health insurance for active educators. The state has not increased its share of funding for TRS-ActiveCare since that program began in 2001, and funding that was once in line with what private employers provide is now far less than the private market and woefully inadequate. Finally, ATPE echoed much of the rest of the education community in requesting that additional school property tax revenue collected due to increased property values be used to increase the education budget instead of being used to replace state dollars that legislators want to spend elsewhere – in other words, the concepts of “supplement not supplant” and property tax transparency.
If this was the Senate’s starting point, what are the next steps?
Today, Jan. 27, the work group tasked with reimagining the school finance system will meet for the first of what will likely be several times. It is a joint meeting with the Senate Education Committee, chaired by Sen. Larry Taylor (R-Friendswood). They will be taking invited testimony from several stakeholder and school finance experts. At some point in the coming weeks, the Article III (education) subcommittee will also meet and begin to negotiate potential changes from the base budget. The work of these two groups will eventually inform both the budget and a separate school finance bill that would then have to be negotiated with the House, before a final budget and possibly and school finance bill finally makes its way to the governor’s desk.
Stay tuned to Teach the Vote and atpe.org/advocacy for updates as the budget-writing process continues.