Texas Comptroller Glenn Hegar didn’t provide details as he told lawmakers Monday that the financial forecast isn’t as dire as earlier feared. But he said revenues are still down “significantly” compared with last year.
Comptroller Glenn Hegar discussed the biennial revenue estimate for the 2020-21 biennium at the state capitol in 2019. On Monday, he said state revenues are down during the pandemic, but not as bad as earlier feared. Credit: Miguel Gutierrez Jr./The Texas Tribune
Sales tax revenues, by far the largest part of the state budget, fell by 4.8% in the second half of the 2020 fiscal year compared with the same stretch last year, Hegar said. It was a much softer hit than he anticipated, thanks to Texans staying home and spending money on “staycations instead of vacations.”
Other revenue streams, such as taxes related to alcohol, hotel occupancy, and oil and gas, were down more than 40% in the same period this year compared with last, Hegar told lawmakers Monday during a Legislative Budget Board meeting at the Capitol.
“Revenues remain down significantly relative to a year ago, and well below what we expected to collect when the Legislature wrapped up work on the budget in 2019,” Hegar said.
Legislative budget writers decide how much money will be allocated for large state expenses like how much school districts get, how well health care programs are funded, which transportation projects get built and what amount state law enforcement gets based on how much the comptroller says will be available during the next two-year budget cycle, which runs from September 2021 through August 2023. Hegar will likely unveil that number as the session nears.
Hegar, whose office is in charge of collecting taxes owed to the state of Texas, last formally updated lawmakers in July, when he wrote a letter to Gov. Greg Abbott and lawmakers projecting the state’s current two-year budget to be roughly $11.5 billion less than originally estimated. That would put the state on track to end the biennium, which runs through August 2021, with a deficit of nearly $4.6 billion, Hegar wrote in July.
On Monday, Hegar presented virtually to some of the state’s political leaders, including Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen, who co-chair the budget board and who appeared in person at the Capitol along with eight other colleagues from both chambers.
Plexiglass dividers separated the lawmakers, most of whom entered the room wearing masks and who were all tested for the coronavirus before attending the meeting, a possible preview of what the Legislature could look like once it begins Jan. 12.
Before Monday’s meeting adjourned, it also turned into a brief public goodbye between Patrick and Bonnen, who is retiring from the House after a 2019 political scandal.
“Thank you for all of your cooperation working with the Senate and leading the House during the interim,” Patrick said. “A much different level of cooperation than in the past, so I greatly appreciate that and I look forward to the new speaker.”
State legislators offered up a preview this week of what debates over public education policy and the budget could look like in the 87th Texas Legislature. Legislators spoke to the Texas Tribune as part of the Texas Tribune Festival 2020, which is being held virtually throughout the month of September.
On Tuesday, House Appropriations Committee Chairman Giovanni Capriglione (R-Southlake) and state Rep. Mary González (D-Clint), who serves on the subcommittee that oversees public education spending, addressed the budget.
Earlier this summer, Texas Comptroller Glenn Hegar announced that the state will end the current two-year budget cycle at a $4.6 billion deficit, marking an $11.5 billion decline from what was estimated before the economic recession driven by the COVID-19 pandemic.
“We definitely know this will be one of the worst budget sessions that we’ve ever experienced,” said Rep. González. “We haven’t really dealt with a deficit this big in a significant amount of time.”
González expressed optimism that Texas has fared better than other states during the economic recession, and suggested the House will look for innovative solutions for addressing the budget crunch, such as looking for areas to cut or raise new revenue.
González said her personal wish list includes drawing down additional federal funding by expanding Medicaid and reducing the amount of additional state money legislators have chosen to spend on border security. Chairman Capriglione said he is hopeful that future relief funds from the federal government will support state and local municipalities as well.
Regarding Texas’s Economic Stabilization Fund (ESF), Capriglione noted that the “rainy day fund” will likely not be the only solution and legislators will want to be able to save some money for future emergencies, such as another hurricane. Rep. González suggested the fund will not be enough to meet all of the state’s needs. The chairman also pointed out that legislation passed during the last legislative session allowed the state to invest some of the ESF, which generated $230 million in interest income last year.
State leaders have asked most agencies to cut their budgets by 5% ahead of the next budget cycle, which Chairman Capriglione said will have to be cleared by legislators. The chairman said cuts made now will serve to ease some of the pressure during the next budget cycle. Rep. González cautioned that cuts must be made in a way that does not harm vulnerable populations. Capriglione added that public health, public safety, and public education should be protected.
House Public Education Committee Chairman Dan Huberty (R-Humble) and Senate Education Committee Chairman Larry Taylor (R-Friendswood) spoke on Monday about the shape of the public education discussion when legislators meet in January. Chairman Huberty suggested the next legislative session will be about maintaining rather than expanding the changes made by House Bill (HB) 3, the school finance bill legislators passed last session. This includes preserving the funding that went to providing a modest increase to some educators’ salaries.
Both admitted they haven’t looked at new revenue sources for HB 3 other than relying on the economy to improve. Huberty suggested we could find money by pausing some programs under HB 3 right after mentioning the incentive program. On the other hand Taylor talked about continuing the Teacher Incentive Allotment (TIA) because districts are using it.
The chairmen also addressed the concerns of districts that have voiced frustration over federal relief funding Congress appropriated for schools, which the Texas Education Agency (TEA) has used to supplant rather than supplement state funding for schools. Chairman Taylor explained the decision was made in order to keep the state’s commitment to provide funding at the same level districts expected to receive before the recession hit. Yet, both chairmen suggested school districts will need to use some of their fund balances to fill in budget holes.
The 87th Texas Legislature is scheduled to meet January 12, 2021.
Texas Comptroller Glenn Hegar, the elected official charged with overseeing the state’s finances, now expects Texas will face a $4.6 billion deficit by the end of the current two-year budget cycle. The state had as recently as February been looking at a multi-billion dollar surplus heading into next session.
One of the comptroller’s primary jobs is releasing state revenue estimates, which project how much tax revenue the state is expected to collect in relation to how much it is budgeted to spend. These estimates are revised periodically, particularly in the event of a drastic change in economic circumstances. The economic downturn caused by the simultaneous events of the COVID-19 pandemic and the oil price war certainly marked a drastic change.
Certification Revenue Estimate 2020-21 Info-graphic from the Texas Comptroller
The comptroller told legislators back in April that the economic double-whammy had sent Texas officially into a recession. On Monday, Hegar testified before the Legislative Budget Board (LBB) and shared a revised revenue estimate that offered sobering numbers. The state is projected to end fiscal year (FY) 2021 with a budget shortfall of $4.6 billion — a $7.5 billion reversal from the $2.9 billion surplus his office projected in the certified revenue estimate (CRE) released in October 2019. The state is now expected to have $110.2 billion in available general revenue for the 2020-2021 budget biennium, representing an $11.6 billion decline from $121.8 projected in the 2019 CRE.
A mathematically-minded observer may note that the numbers do not exactly match up. Hegar explained that while revenue collections dropped by $11.6 billion, the budget fell by only $7.5 billion as a result of a handful of factors that reduced the amount of money the state was expecting to spend. Among them, Texas received $1.2 billion of federal CARES Act funding for public education that it used to offset state spending. Changes in the assumptions regarding the state share and the local share of public education funding resulted in $1.7 billion in unanticipated local funding. The state also received an additional $700 million in recapture (or “Robin Hood”) payments that it had not anticipated.
Source: Texas Comptroller
Sen. Finance Committee Chair state Sen. Jane Nelson (R-Flower Mound) asked Hegar in Monday’s LBB hearing whether legislators should expect to tighten their belts during the next legislative session. Hegar was reticent to prognosticate beyond the current budget cycle. However, he was quick to point out that he had pushed early on for agencies to reduce their spending ahead of next session. State leaders have since instructed state agencies to reduce spending by 5% across the board. Hegar noted that instruction is not factored into this projection. Any savings will however reduce the need for supplemental spending in the next legislative session, reducing the overall pressure on the next biennium’s budget.
In response to a question posed by Senate Education Committee Chair Larry Taylor (R-Friendswood), Hegar indicated that the state will be able to ensure schools receive the additional funding promised this budget cycle as a result of the school finance bill House Bill (HB) 3. Yet Hegar suggested there is tremendous uncertainty as to what the state will be able to provide in the upcoming 2022-23 budget cycle.
Lt. Gov. Dan Patrick (R-Texas) said Monday that school districts across the state have roughly $14 billion in fund balances, which represents each district’s cash reserves. Patrick suggested that the state could tap those fund balances to offset the budget deficit. Patrick separately acknowledged that teachers are now included in the list of “frontline” workers in the COVID-19 pandemic.
The revised estimate released this week does not take into account agency budget cuts, whether schools reopen for in-person versus remote instruction, or any future federal relief money. Hegar explained Wednesday in an interview with Texas Tribune Executive Editor Ross Ramsey that the estimate does not factor in any additional federal relief money until a bill is passed by Congress and signed by the president. Hegar also told Ramsey that the estimate was based upon the assumptions that the economic recovery is already underway, that there will not be an additional spike in COVID-19 cases in the fall that would spark another shutdown, and that GDP may return to normal by the end of 2021.
Hegar said that the state saw a less drastic decline in sales tax revenue than he had previously feared. The state also took in $950 million more in taxes from online purchases as a result of legislation passed during the last legislative session that expanded the sales tax.
The economic stabilization fund (ESF), commonly referred to as the “rainy day fund,” is projected to end FY 2021 with a balance of $8.8 billion. This fund is fed by taxes collected from oil and gas operations, which have been hit hard by the combination of lower oil prices and a reduction in production following the precipitous drop in demand caused by the economic impacts of the pandemic. The ESF was designed as a safety feature to enable legislators to dip into the fund to during lean years, smoothing out the fluctuations in available tax revenue caused by volatility in the oil and gas market and enabling the state to maintain critical government services.
In both testimony and interviews this week, Hegar has emphasized the need for the community to come to terms with the reality of a protracted battle against COVID-19. Hegar highlighted citizens’ responsibility to wear masks and engage in safe practices designed to slow the disease’s spread and prevent another shutdown. On a positive note, Hegar noted the healthy ESF and potential savings from agency budget cuts are among the measures at the state’s disposal to help manage the budget shortfall.
“There’s plenty of tools in the toolbox to be able deal with it as this current revenue estimate projects,” said Hegar, while adding the caveat, “Every revenue estimate has clouds of uncertainty, yet this one has greater clouds of uncertainty than ever before.”
The comptroller discussed other potential sources of revenue and savings in Wednesday’s interview. Hegar contended that an income tax is unlikely to pass in Texas, where such a proposal would require a supermajority of the Texas legislature and a statewide vote. The comptroller was also skeptical of the idea of legalizing and taxing marijuana, which polling shows is supported by most Texans. Hegar instead pointed to budget measures taken during the 2011 legislative session, which saw large budget cuts (including $5.4 billion from public education) as a result of a projected budget shortfall. The comptroller also mentioned deferring public education payments and looking at funding for Medicaid.
When the 87th Texas Legislature convenes in January 2021, shoring up the current budget will be the first task legislators face. Their next task will be to set the budget for the 2022-2023 biennium, which Hegar warned is likely to be a much bigger issue — although it’s too early to forecast the scope of the challenge. That will be the focus of the comptroller’s biennial revenue estimate (BRE), which is usually released right before the new legislative session begins.
The Teacher Retirement System (TRS) of Texas Board of Trustees met virtually last week on Wednesday through Friday, July 15-17, for its regular board meeting. In addition to other items, the board discussed the current financial market, TRS-Care and ActiveCare, the fiscal year 2021 budget and highlights of the preliminary legislative appropriations request, and updated considerations on TRS office space.
The official numbers for the trust fund through March 31 were presented to the board, but it was noted that those numbers are at this point significantly out of date. Staff went on to report that the market (as gauged by the S&P 500) has rebounded to approximately January 2020 levels, and they indicated that the TRS fund has tracked the market similarly. The benefit of the quick recovery of fund assets is that only a relatively small amount of assets had to be sold while prices were down to cover the cost of pension benefits paid out over that time frame. Longer recovery periods are by comparison much more detrimental to the fund because the period in which assets have to be sold at a reduced price, effectively locking in losses, is much longer.
TRS Board Presentation: S&P 500 chart
While the stock market and the TRS pension fund are relatively unscathed by the coronavirus pandemic for the moment, the state budget that relies largely on sales tax receipts and oil and gas severance taxes is in much worse shape. Due to this reality, state leaders called on all state agencies to cut their fiscal year 2021 budgets. Although the retirement system’s operational expenses are paid out of the pension fund itself and not out of the state’s general revenue, TRS still undertook the budget trimming exercise.
TRS staff presented the board with a proposed operational budget of $211 million for fiscal year (FY) 2021. This represents a 9% decrease from the FY21 target budget and a 6% decrease from the FY20 operational budget, which was $225 million. As part of the cost saving measures, TRS has instituted a hiring freeze through 2020 and a salary freeze through FY21. The agency has also cut the majority of outsourced funding going to vendors previously working on the data systems project dubbed TEAMS. The project will continue with the current number of in-house employees. TRS is also abandoning the effort to set completion dates on TEAMS benchmarks, as those dates have proven to be unrealistic and problematic.
In addition to next year’s budget, TRS staff also updated the board on the draft legislative appropriations request (LAR) the agency will present to lawmakers during the next legislative session. The agency’s request will cover fiscal years 2022 and 2023. The request will ask for specific funding to cover the state’s share of healthcare and pension costs, in addition to approval of the agency’s projected operational budget. TRS plans to ask for funding in the agency’s LAR based on the increased state contributions to pensions and retiree healthcare that legislators ordered during the last session and considering standard payroll growth assumptions for teacher salaries.
The agency’s LAR will also include a request for funding for 25 additional employees, or what are referred to as “Full-Time Equivalents” (FTEs). TRS staff had internally requested an additional 167 FTEs: 57 for the Investment Management Division (IMD) and 110 for the Benefits division. The 25 new FTEs in the agency’s LAR will go to IMD as a part of a “growing the fleet” initiative. This initiative aims to save the pension fund money by reducing outsourced costs in a greater amount than the cost of the new salaries. The Benefits division will have no new FTEs included in the upcoming LAR.
Over the last 18 months, space planning has become a constant conversation at the TRS board level as issues over the short term plans to lease space for housing the IMD staff have transitioned into a broader conversation on longer-term space needs for all staff. TRS continues to move forward with the goal of having a solution for its long-term office space needs in place by 2025. A major priority of that push is to house all TRS employees in the same location and discontinue the practice of housing the IMD staff in separate leased space.
As with everything, the current coronavirus has impacted the discussion around TRS space planning. With declining real estate prices and new potential spaces opening up in downtown Austin, the agency has paused its negotiations to renew its lease at 816 Congress so as to assess if there are better options available. Unfortunately, while the current market may present an opportunity for savings as a tenant, it is creating a more challenging environment in which to sublet the TRS space in Austin’s new Indeed Tower. The COVID-19 pandemic also has forced the agency to utilize remote working for a significant number of its staff for an extended time frame. Due to this change, TRS has revised its assumptions going forward on the percentage of staff who can work from home on a daily basis from 5% up to 25%. This change decreases TRS’s overall space requirements but also highlights a need for more collaborative space for staff who may usually work outside the office to come in and use. This also opens up the possibility that, with significant renovations, the agency’s current Red River location could house all TRS employees on a longer-term basis. Such renovations might not be any less expensive than simply relocating the agency to a new location outside of downtown Austin.
Finally, nominations for an active member seat on the TRS board of trustees are currently underway. The nomination period began June 15 and will continue through January 25, 2021. Assuming there are more than three successful nominees, an election will be held from March 15 to May 5, 2021. The top three vote-earners from that election will be reported to the governor, who will appoint the new board member from among those three candidates. ATPE members interested in running for this TRS board position can contact the ATPE Government Relations team for more information.
Access board documents and archived video of the July meeting here on the TRS website. The next TRS board meeting will be held in September.
In an interview Tuesday morning, April 7, 2020, with Texas Tribune Executive Editor Ross Ramsey, Texas Comptroller Glenn Hegar repeated a statement he had already made to legislators in private last month regarding the combined economic impact of the COVID-19 pandemic and plummeting oil prices.
“I know that we are unfortunately in a recession,” said Hegar, whose office oversees the state’s finances. “I just don’t know how deep or how wide it’s going to be.”
The comptroller’s certification revenue estimate in October 2019 projected that the state would end the current budget cycle with a balance of $2.9 billion in general revenue and $9.3 billion in the state’s economic stabilization fund (ESF), which is often referred to as the “rainy day fund.” Hegar said he plans to release a revised revenue estimate in July, which he predicts will be several billions dollars less. Many are questioning just how much of a toll the double-whammy of a pandemic and an oil price war will take on the state’s budget — especially after legislators significantly increased public education funding under House Bill (HB) 3 in 2019.
Hegar said Tuesday the state is expected to have enough cash flow to meet its obligations through the end of the current budget, which runs through August 31, 2021. While contributions to the ESF are expected to decrease as a result of declining oil and gas revenues, the comptroller’s office is still projecting a balance of $8.5 billion in the fund by the end of the current budget cycle.
Altogether, Hegar said he does not believe legislators will need to be called into a special session this year to shore up the current budget, but he added that the start of the next legislative session in January 2021 will be quickly upon us. Next session, legislators anticipate facing the daunting task of funding state priorities over the next budget cycle with significantly less money available.
The reason less money will be available has to do with how Texas government is funded. Since Texas does not have an income tax, sales and use taxes account for 57% of state revenue. Local governments are funded by a combination of sales and property taxes. When places like bars, restaurants, and stores make less money, they send in less sales tax revenue. Surging unemployment has the same effect on sales taxes by depressing consumer spending, as well as inhibiting people’s ability to keep up with their property taxes.
All this is happening at the same time the demand for government services such as unemployment, healthcare, and food assistance is increasing. The result is an unprecedented strain on government at every level, yet Hegar noted that state agencies should look for ways to cut spending.
The comptroller’s office is currently working off of sales tax revenue reports released in March detailing economic activity that happened in February, which was before social distancing was enforced. April sales tax numbers will provide a better look at the economic impact of business closures and downsizing, but that report won’t be available until the end of May. Hegar is waiting on those numbers to give a better estimate of the impact on the state budget in the planned revised revenue estimate this summer.
So what does this all mean for public education? It’s still unclear. Hegar noted Tuesday that education and health and human services make up the two largest components of the state budget. Hegar noted that state leaders will likely begin discussing ways to cut agency spending during the current budget cycle, but he suggested that areas like the Foundation School Program (FSP) and Medicaid should be exempted from cuts this year. The FSP is the finance formula that flows funding for public education to local schools.
The state is also awaiting federal coronavirus aid recently passed by Congress, which will send billions of dollars to schools across the nation. Future federal aid packages are likely to have an additional impact on the state budget going into next session. There are already talks coming out of Washington about a fourth coronavirus stimulus bill that could provide as much as one trillion dollars in additional aid.
The one phrase Hegar repeated multiple times throughout this morning’s 45-minute interview was “managing expectations.” The comptroller was clear that the state is in the midst of a recession driven largely by the COVID-19 outbreak and aggravated by the oil price war. We still don’t know how many billions of dollars this will drain from the state’s budget going forward, but it will be significant. We’ll have a better look when the comptroller releases his revised estimate in July.
You can watch the full Texas Tribune interview with Texas Comptroller Glenn Hegar here.
On February 10, 2020, President Donald Trump released his budget proposal, which is a statement of his administration’s spending priorities across all sectors of government. Because the president’s budget is merely a proposal, any of these funding amounts would still need to be approved by Congress in order to be enacted. Historically, Congress has largely ignored President Trump’s funding proposals for education.
The education portion of the president’s 2021 budget recommendation is focused on “education freedom.” While cutting funding for the U.S. Department of Education by $5.6 billion, the proposal requests funds to provide up to $5 billion annually in “Education Freedom Scholarships.” Using these funds, states would be free to design their own scholarship programs, which could be used to send public dollars to private schools. This requested increase in voucher funding reflects the president’s statements during his State of the Union address last week, which my fellow ATPE Lobbyist Mark Wiggins reported on here and here for Teach the Vote.
Trump’s proposal also consolidates 29 federal education programs into one block grant totaled at $19.4 billion, which is $4.7 billion less than Congress approved for these programs in 2020. A list of the programs can be found here (see p. 9), which includes 21st Century Learning Centers, charter schools, school safety national activities, and the $16 billion Title I Grants. This change purportedly would cut the role of the Department of Education significantly by reducing staffing and administrative costs. Though this is labeled a “block grant,” funds would still be allocated using the Title I formulas. The proposal indicates that states and school districts could use the funds on any of the consolidated programs and would still have to follow key accountability and reporting requirements.
Consistent with the president’s affinity for career and technical education (CTE), the proposal also includes $2 billion for CTE state grants and $90 million for CTE national programs. Part of this $763 million increase would be funded by a proposal to double the fee for H1-B visas.
The president’s 2021 budget recommendation includes an increase of $100 million in funding for Individuals with Disabilities Education Act (IDEA) Part B grant funding, for a total of $12.8 billion. This increase is relatively small considering the overall funding needs for students with disabilities. (Texas appropriated over $2 billion for this purpose during the 86th legislative session.)
As was the case in previous presidential budget requests from the Trump administration, the proposal eliminates the Public Service Loan Forgiveness program, citing that it “unfairly favors some career choices over others.”
Review past reporting on President Trump’s budget requests for the 2018,2019, and 2020 fiscal years here on ATPE’s Teach the Vote blog.
On Tuesday, April 9, the Texas Senate passed its version of the state budget for the next two years. The Senate’s substitute version of House Bill (HB) 1 received unanimous approval from the upper chamber.
Like the House, the Senate set aside $2.7 billion in the budget bill for “tax relief,” although it is yet to be determined exactly how the money will be spent to achieve that goal. The Senate also dedicated $6.3 billion to public schools, $4 billion of which is reserved for a $5,000 across-the-board pay raise for all full-time teachers and librarians through Senate Bill (SB) 3. That leaves only $2.3 billion in the Senate’s bill to try to make changes to the larger school finance system.
The Senate’s budget proposal differs from the House’s plan, which delivers more than $6 billion to school districts with instructions to spend the first 25 percent of any increase in the basic allotment, or approximately $2.4 billion, on salary increases for all non-administrative staff. While amounts of such a pay raise, if passed, would vary from district to district, the House’s plan would average out roughly to about $1,300 per full-time employee.
Next, each chamber will appoint members to a conference committee that will work out the differences between the version of HB 1 that the Senate passed this week and the version of the bill that the House passed last month. For its part, the House has already appointed its five members of the critical budget conference committee: House Appropriations Chairman Rep. John Zerwas will chair the committee, joined by Reps. Greg Bonnen, Sarah Davis, Oscar Longoria, and Armando Walle. Once the Senate appoints its conferees, negotiators will have until the session ends in late May to reach an agreement. The budget is the only bill the Texas Legislature is constitutionally required to pass, so any failure to come to an agreement within the 140-day regular session would result in legislators being called back for a 30-day special session to finish the budget.
The state’s ongoing difficulty in providing resources for students with disabilities continues to make headlines. On Thursday, April 11, Representative Mary González (D – Clint) and Representative Morgan Meyer (R – Highland Park) held a press conference to address Texas’s consistent underfunding for students with disabilities and lack of compliance with federal spending requirements under the Individuals with Disabilities Education Act (IDEA). ATPE and other stakeholder groups representing educators, students, and advocates for people with disabilities participated in the bipartisan press conference.
The state’s inadequate spending on students with special needs could cost Texas as much as $223 million in lost federal funding. Under the IDEA’s maintenance of financial support requirement, each state must spend at least as much on special education as it did in the previous year or face a financial penalty. Read more about the millions in penalties Texas faces here.
The Senate Education Committee convened twice this week to take action on bills pertaining to virtual schools and other miscellaneous items. The first meeting of the committee on Tuesday featured testimony about which entity should manage the Permanent School Fund and a discussion of school turnaround options. The committee also heard an ATPE-supported bill by the committee’s chairman, SB 1895 by Sen. Larry Taylor (R-Friendswood), that would help educators receive professional development on blended learning.
Among the legislation voted out favorably by the committee on Tuesday were two bills pertaining to virtual schools, which ATPE opposed when they were heard by the committee the previous week. The committee advanced SB 2244 by Sen. Angela Paxton (R-McKinney), which prevents school districts from charging fees for virtual classes and makes it easier to enroll in virtual schools, and SB 1455 by Sen. Larry Taylor (R-Friendswood), which also expands virtual schools. ATPE previously submitted written testimony opposing both bills and citing research that calls into question the quality and performance of existing virtual schools. The committee also voted out a number of other bills, including SB 1256 by Sen. Paul Bettencourt (R-Houston) that cleans up portions of his educator misconduct bill passed last session.
During the Senate committee’s second hearing on Thursday, the bills discussed were mostly unrelated to each other. ATPE supported bills including SB 426 by Sen. Eddie Lucio,. Jr. (D-Brownsville), which would ensure that counselors spend the majority of their time counselling students as opposed to being assigned other duties such as test monitoring. The committee also took action on some pending bills, including a major school safety bill. Chairman Taylor’s SB 11, which ATPE had also supported, received a favorable vote by the committee on Thursday. SB 11 follows up on recommendations of the Senate Select Committee on Violence in Schools and School Security that met during the interim last year.
On Tuesday, April 16, the Senate Education Committee is slated to meet again and is expected to hear the House’s major school finance bill, HB 3. ATPE urges educators to contact their senators about this widely support bill and keep up the momentum for passing meaningful school finance reform and an educator pay raise this session.
The House Public Education committee held a marathon meeting on Tuesday, hearing 38 bills that mostly pertained to charter schools. Several of the bills were aimed at regulating the expansion of charter schools and how charter schools handle student discipline, eliciting hours of public testimony. Other bills heard on Tuesday included the ATPE-supported HB 228 by Rep. Matt Krause (R-Fort Worth) that would create new eligibility standards for Districts of Innovation (DOI), and HB 1853 by Rep. Leo Pacheco (D-San Antonio), which would require charter schools to hire certified educators and protect the rights of educators. ATPE also provided neutral testimony on HB 3904 by Chairman Dan Huberty (R-Kingwood), which is considered a clean-up bill for Huberty’s HB 22 that was passed last session.
Find more information on the bills considered and passed by the House Public Education committee in this blog post by ATPE Lobbyist Andrea Chevalier. The committee will meet again on Tuesday, April 16, where it will consider a diverse agenda, including some virtual schooling bills similar to those acted upon by the Senate committee this week. Stay tuned to Teach the Vote and follow us on Twitter for updates.
ATPE is encouraging educators to contact their senators asking them to oppose two bills that would infringe on educators’ free speech rights and limit the ability to teach students. SB 1569 by Sen. Pat Fallon (R-Prosper) and SB 904 by Sen. Bryan Hughes (R-Mineola) both deal with “political advertising” laws and are aimed at limiting the ability of school district employees and school board members to talk about political content while they’re at school.
SB 1569 has been placed on the Senate Intent Calendar for next week, meaning that it could come up for a floor vote as early as Tuesday. SB 904 has not yet been placed on the Senate Intent calendar but may also appear there at any time. While the authors did make some changes to these two bills compared to their versions as filed, ATPE remains concerned about likely negative consequences of SB 1569 and SB 904 and the chilling effect they would have on educators. For additional information, check out this blog post about the bills. ATPE members are urged to visit Advocacy Central for talking points and quick communication tools for reaching out to their senators.
The Texas House of Representatives debated its budget bill, March 28, 2019.
During a late night floor session on Wednesday, the Texas House unanimously approved a $251 billion state budget bill, House Bill (HB) 1. The bill includes a $9 billion appropriation for improving the state’s school finance system and providing property relief to homeowners. The public education-related funding increases in the House budget would be implemented via HB 3, Chairman Dan Huberty’s (R-Kingwood) omnibus bill that ATPE supports. The full House is slated to debate HB 3 on the floor next Wednesday, April 3.
On the other side of the Capitol, the Senate Finance Committee is preparing to approve its budget bill, Senate Bill (SB) 1, in the coming days. During a meeting yesterday, the committee decided to add money to its bill to match the House’s $9 billion funding proposal for public education. The two chambers are likely to disagree, however, on how that money should be spent.
Read more about the House’s big budget vote in this article from The Texas Tribune republished on our Teach the Vote blog. We urge ATPE members to use our convenient tools on Advocacy Central to send a message to House members thanking them for their vote on the budget to increase public education funding and urging them all to similarly support HB 3 next week.
ATPE State President Byron Hildebrand testified before a House committee, March 26, 2019.
This week two important bills affecting the Teacher Retirement System (TRS) advanced in both the House and Senate.
House Bill (HB) 9 by Rep. Greg Bonnen (R-Friendswood), which increases contributions to TRS and provides retirees with a 13th check, received a hearing the House Committee on Pensions, Investments, and Financial Services on Tuesday. The bill was left pending in committee but is expected to be voted out favorably in the near future. ATPE State President Byron Hildebrand testified in favor of HB 9 during the hearing.
Also, Senate Bill (SB) 12 by Sen. Joan Huffman (R-Houston) was voted out of the full Senate by a unanimous vote on Monday. SB 12, which ATPE also supports, raises the contribution rates into TRS, albeit differently from the House’s bill, and provides retirees with a 13th payment, but the payment would be lower. For more information on the differences between the two bills, check out this blog post by ATPE Senior Lobbyist Monty Exter.
On Tuesday, the Senate Education Committee chaired by Sen. Larry Taylor (R-Friendswood), heard a number of bills focused on student discipline issues. ATPE supported bills such as Senate Bill 1451, which prohibits negative action on a teacher’s appraisal solely on the basis of the teacher’s disciplinary referrals or documentation of student conduct, and Senate Bill 2432, which would add harassment to the list of conduct that will result in the mandatory removal of a student from the classroom. For more information on the bills heard, plus other pending bills that were voted on during this week’s committee hearing, check out this blog post by ATPE Lobbyist Mark Wiggins.
Meetings of the House Public Education Committee have been known to take on a theme and focus on bills that pertain to the same issue. The theme of this week’s meeting of the committee was school safety. Members of that committee on Tuesday heard 35 bills related to topics in school safety such as school hardening, access to mental health resources, and increased law enforcement on school campuses. ATPE registered a position in support of six bills including House Bill 2994 by Rep. James Talarico (D-Round Rock), which would require the Commissioner of Education to develop mental health training material for school districts. A thorough breakdown of the bills heard during this committee meeting can be found in this blog post by ATPE Lobbyist Andrea Chevalier.
FEDERAL UPDATE: On Thursday, March 28, 2019, U.S. Secretary of Education Betsy DeVos sat before the Senate Appropriations Committee to defend President Donald Trump’s proposed federal budget for the Department of Education. DeVos faced questions on her support for increasing federal funding for school choice while eliminating or decreasing funding aimed at teacher effectiveness, special populations, and loan assistance. Watch more coverage of the hearing here for the full scoop.
ELECTION UPDATE: The 86th Texas Legislative session is more than halfway over, and issues like school finance, teacher pay, and school safety remain key topics. This is a direct result of the tremendous educator turnout during the 2018 elections and proof of the power of democracy – informed and engaged citizens holding their elected officials accountable. Practicing and modeling civic engagement require voting in every election. On May 4, 2019, many Texans will have the chance to vote in local elections for school boards, mayoral seats, bonds, and more. Make sure your voter registration is up to date so you will be able to participate. The last day to register to vote in the May election is April 4. Early voting runs April 22-30, 2019. Visit VoteTexas.gov to learn more about how to register and vote.
Editor’s note: This story has been updated throughout.
In Dennis Bonnen’s first major test as speaker of the Texas House, the chamber he oversees resoundingly passed a $251 billion budget Wednesday after a long but largely civil debate — a departure from the dramatics that have typically defined such an affair.
Though lawmakers proposed more than 300 amendments to the spending plan, Bonnen, an Angleton Republican, and his chief budget writer, state Rep. John Zerwas, R-Richmond, finished the night with their budget plan largely intact. After 11 hours of relatively cordial discussion, lawmakers agreed to withdraw the vast majority of their amendments or move them to a wish list portion of the budget, where they are highly unlikely to become law.
The budget passed unanimously on the final vote. The legislation, House Bill 1, now heads to the Senate, whose Finance Committee was set to discuss its budget plan Thursday.
“I’m proud of where we are in the bill that we are sending to the Senate,” Zerwas said at the end of the marathon debate. “Each and every one of you should be incredibly proud of the work that you’ve put in here.”
The two-year spending plan’s highlight — a $9 billion boost in state funding for the public education portion of the budget — remained unchanged. Of that, $6 billion would go to school districts, and the remaining $3 billion would pay for property tax relief, contingent on lawmakers passing a school finance reform package.
The budget plan would spend $2 billion from the state’s savings account, commonly known as the rainy day fund, which holds more than $11 billion.
“I’m not here to compare it to previous sessions,” Bonnen told reporters after the House budget vote. “But I’m here to tell you we had a great tone and tenor tonight, and I’m very proud of the business that we did.”
Some of the more contentious budget proposals floated by lawmakers never reached the floor. An amendment from state Rep. Richard Peña Raymond, D-Laredo, for example, would have asked members to vote on the issue of across-the-board pay raises for public school teachers. Such a proposal has divided the Legislature this session, with Lt. Gov. Dan Patrick’s Senate in favor and much of the House opposed. Raymond withdrew his amendment Wednesday evening, saying he planned to bring up the issue again when the House debates its school finance bill.
A proposal from state Rep. Mayes Middleton, R-Wallisville, to prohibit disaster recovery dollars from benefiting noncitizens and “illegal aliens” was quietly withdrawn after sparking controversy earlier this week. Across the aisle, state Rep. Jessica González, D-Dallas, withdrew her amendment that would have required Gov. Greg Abbott’s office to prepare a report on domestic terrorist threats posed by white supremacists.
Bonnen worked behind the scenes in the days preceding the vote, House lawmakers said, in the hopes of avoiding the discord that has erupted during the chamber’s marathon budget debates in past sessions. On Tuesday, top lieutenants for Bonnen met for a handful of informal gatherings to offer concessions in exchange for lawmakers dropping some of their more controversial amendments, according to people familiar with the meetings.
The result was one of the shortest budget debates in recent memory. Lawmakers gave preliminary approval to the two-year spending plan minutes after the clock struck midnight. Under former House Speaker Joe Straus, lawmakers in 2017 and 2015 went home well into the morning, after several explosive exchanges between Straus’ allies and the chamber’s hardline GOP membership.
“This budget night is unlike any other I have experienced in my time in the House — both in it’s shorter duration and civil tone,” said state Rep. Matt Krause, a Fort Worth Republican and Freedom Caucus member, in a text message after the debate concluded. “I think Speaker Bonnen deserves the bulk of the credit for creating an environment of civility and decorum. This is how the Texas House should operate when debating the big issues for the state of Texas.”
So while Bonnen’s first budget night as speaker was hardly free of controversy — an argument over the effectiveness of the state’s “Alternatives to Abortion” program, for example, derailed movement on amendments for nearly an hour — the occasional spats paled in comparison with those of years past. There were no discussions at the back microphone of lawmakers’ sexual histories, as happened in 2015, and no one had to physically restrain House members to prevent a fistfight over the fate of a feral hog abatement program, as happened in 2017.
Still, state Rep. Jonathan Stickland, R-Bedford, continued his long-running campaign against the feral hog program. And though the exchange ranked among the evening’s rowdiest, it was more than tame by last session’s standards.
State Rep. Drew Springer, R-Muenster, again opposed Stickland’s amendment to defund the program, which reimburses local initiatives to eradicate wild hogs. Stickland responded, “Members, although I respect the thoughtful words of Rep. Springer … let’s end this program right here, right now.”
Stickland’s amendment failed, with just four votes in favor.
In an earlier dustup just before 2 p.m., state Rep. Sarah Davis, R-West University Place, who led the House budget negotiations over health and human services programs, was seen in a heated exchange with state Rep. Jeff Leach, R-Plano.
A few minutes later, Leach proposed an amendment that would allow Texas to expand Medicaid coverage for women up to a year after they give birth. To cover some of the costs, Leach’s amendment recommended cutting $15 million from a program in Abbott’s office that reimburses film and video game makers who work in Texas.
Extending postpartum Medicaid coverage “is simply more important and should be a higher priority” than the film incentives program, Leach said.
Democrats gathered at the back microphone to oppose the motion, saying the funding should come from elsewhere.
“I appreciate that you’re trying to help women’s health,” said state Rep. Donna Howard, D-Austin, who said she supported the film incentives as a job-creation program. “If we found another source, would you create another amendment?”
“I’m not going to agree to hypotheticals,” Leach replied. The amendment subsequently passed without a recorded vote after putting Democrats in the awkward position of voicing opposition to a Medicaid coverage expansion they otherwise supported.
A more ambitious Medicaid coverage expansion, which would have provided publicly funded health insurance to low-income Texans under the Affordable Care Act, failed for a fourth legislative session. The Medicaid expansion amendment brought by state Rep. John Bucy III, D-Austin, was rejected with 66 votes in favor and 80 opposed.
Still, Democrats saw some wins Wednesday. For example, an amendment by state Rep. Michelle Beckley, D-Carrollton, that would require the Department of State Health Services to conduct a study on vaccination rates among children at licensed child care facilities was approved in a 79-67 vote. Another successful amendment by state Rep. Chris Turner, D-Grand Prairie, directs the state to come up with a transition plan for when a pot of federal health care safety-net funding, known as the 1115 waiver, dries up in 2021 and 2022.
Complicating budget negotiations was news of an updated property tax reform proposal, which was expected to be laid out in committee before the House convened but was instead postponed until after the budget debate. Debate over that updated proposal, which drew opposition from Democrats and hardline Republicans, carried over onto the floor as its author, state Rep. Dustin Burrows, R-Lubbock, met with committee members to discuss the high-priority legislation.
The debate on the HB 1 ended with a procedural move spearheaded by Turner and Burrows to wrap up the remaining amendments and send them to the wish list portion of the wish list portion of the budget. That section of the budget, known as Article XI, is considered a graveyard for most line items.
Passing an amendment to the wish list is “just a way to get you off the main,” state Rep. Yvonne Davis, D-Dallas, said in protest earlier in the evening, shortly before one of her proposals was shot down.
The two-year budget wasn’t the only spending plan advanced by the House on Wednesday.
Lawmakers also approved a $9 billion supplemental spending plan to pay for leftover expenses that aren’t covered in the state’s current two-year budget, mostly for Hurricane Harvey recovery and health and human services programs.
A $4.3 billion withdrawal from the state savings account covers the largest share of expenses in the supplemental bill. Another $2.7 billion comes from the state’s general revenue, and $2.3 billion are federal funds.
The legislation, Senate Bill 500, returns to the Senate, whose stopgap spending plan approved earlier this month carried a $6 billion price tag.
Lawmakers in 2017 underfunded Medicaid, the federal-state health insurance program for the poor and disabled, requiring a $4.4 billion infusion of state and federal funds. The Legislature must pass the stopgap funding bill before the end of May if the Texas Health and Human Services Commission is to be able to pay health care providers on time.
The supplemental bill also includes:
Nearly $2 billion to reimburse school districts, state agencies and universities for costs they took on after Hurricane Harvey
About $1.3 billion to shore up a system that pays out teacher pensions, contingent on the passage of a pension reform bill, which includes $658 million from the state savings account to provide a one-time “13th check” made out to retired teachers
Nearly $11 million for the Santa Fe Independent School District, which experienced a mass shooting last year that left 10 dead and 13 wounded
$2 million for state mental hospital improvements, which includes funding to plan the construction of new hospitals in the Panhandle and the Dallas area.
Now that the bill filing deadline has passed and the 86th legislative session is beyond its halfway point, it’s time for the legislature to do the one thing that it is mandated to do in every session: pass a budget. “Budget Day,” though it doesn’t have an official date in each legislative session, is when the House or Senate passes its version of a budget bill. Things get heated, legislators stay on the floor until the wee hours of the morning, staving off delirium to fight for every penny possible for their constituents’ legislative priorities. At stake this session is the future of public education funding, deemed an emergency issue this session by Gov. Greg Abbott and a top priority of the leadership in both the House and Senate.
For its part on the school finance front, the House Public Education Committee unanimously approved Chairman Dan Huberty’s (R-Kingwood) comprehensive school funding bill, House Bill (HB) 3, on Tuesday of this week after making a number of changes requested by ATPE and other education stakeholders. Those changes included removing a controversial merit pay proposal from the bill. Read more about the revisions made to HB 3 in this blog post by ATPE Governmental Relations Director Jennifer Mitchell. The new and improved school finance and tax reform bill is expected to be brought up by the full House for a floor debate within a couple of weeks.
With the momentum behind major public education bills like HB 3, it is now up to lawmakers to put aside enough money for the next biennium to make those school funding proposals a reality. On the House side, those budget decisions will be made via HB 1, which is the House’s version of the budget bill that is scheduled for a floor debate next week. State representatives will be spending the weekend drafting and pre-filing their amendments to the massive budget bill before its lengthy budget debate happens on Wednesday, March 27. Stay tuned to Teach the Vote and be sure to follow us and our lobbyists on Twitter for updates on the budget debate next week.
House Public Education Committee hearing, March 19, 2019
In addition to approving HB 3 earlier this week, the House Public Education committee also heard 21 other bills when it met on Tuesday, March 19. The subjects of the bills ranged from the compensatory allotment to a proposal to make personal financial literacy courses mandatory for graduation. The committee also voted to send 14 previously heard bills to the House floor, including the high-profile school finance and tax relief bill, HB 3. For more information on the bills heard during Tuesday’s committee meeting, read this blog post by ATPE Lobbyist Andrea Chevalier. Next Tuesday, the committee will meet again to hear a long agenda full of school safety bills.
Senate Education Committee hearing, March 19, 2019
The Senate Education committee also met Tuesday, March 19, to hear a number of bills, including several relating to educator misconduct. Most of the bills heard on that subject were filed by Sen. Paul Bettencourt as follow-ups to his Senate Bill 7 enacted by the legislature in 2017. The Senate Education Committee voted to advance three bills to the Senate floor. Read more in this blog post from ATPE Lobbyist Mark Wiggins. On the agenda for next week’s Senate Education Committee hearing are several bills relating to student discipline.
Two high-profile bills positively affecting Teacher Retirement System (TRS) pension benefits are slated for legislative action next week.
First, Senate Bill (SB) 12, by Sen. Joan Huffman (R-Houston) is on the calendar for debate by the full Senate next week. As we reported in last week’s wrap-up, SB 12 was previously heard and approved by the Senate State Affairs Committee. SB 12 would shore up the educator pension fund by gradually increasing what the state, school districts, and educators contribute to TRS over a period of six years.
The second bill is House Bill (HB) 9 by Rep. Greg Bonnen (R-Friendswood), which is scheduled for a public hearing by the House Pensions/Investments/Financial Services Committee on Tuesday morning, March 26, 2019. ATPE will be testifying in support of the bill. HB 9 would increase contributions to the TRS pension fund placing the entirety of the responsibility of paying for the contribution increase on the state. It also provides for TRS retirees to receive a 13th check equal to up to $2400 of their annuity payment.
Despite their different methods, both of these ATPE-supported bills are aimed at making the pension fund actuarially sound, which would make it possible for the state to provide a much-needed cost of living adjustment to those retired educators who are receiving TRS benefits.
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