The Texas House and Senate are closely aligned on their priorities for how to spend a $288.7 billion budget over the next two years, with a special focus on border security, employee raises and property tax relief.
The preliminary budgets from the House and Senate, released Wednesday, come as state lawmakers are preparing for a trickier battle over how to spend an unprecedented $32.7 billion budget surplus from the previous biennium.
Some lawmakers have suggested spending it on one-time investments on infrastructure, while Gov. Greg Abbott and Lt. Gov. Dan Patrick say they want to return it to homeowners through property tax relief. Complicating the exercise are limits on budget increases, as outlined by the Texas Constitution and state law, that state budget officials have set at 12.3% for the 2024-25 budget.
The budget surplus is included in a historic $188.2 billion total in general revenue that state Comptroller Glenn Hegar announced last week would be available for discretionary spending. The House and Senate budget bills both leave tens of billions of those dollars unallocated, and do not touch the state's rainy day fund.
The bills were authored by Rep. Greg Bonnen, R-Friendswood, and Sen. Joan Huffman, R-Houston, who are the chief budget writers in their respective chambers. Their plans are indicative of the Republican-dominated legislature's fiscally conservative approach to budget writing.
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The spending proposals are likely to go through many changes before the end of the 140-day session. The two-year budget is the only bill lawmakers must pass every session.
The money in the budget is made up of $93.7 billion in federal funds, $130.1 billion in state general revenue funds, and $64.9 billion in other funds.
Property tax relief
Both drafts set aside $15 billion for property tax relief, including $3 billion in the Senate's proposal to increase the homestead exemption from $40,000 to $70,000, as Patrick touted in his inauguration speech Tuesday. The House version also calls for a reduction of $2.2 billion in recapture payments.
The Senate and the House proposals jointly call for allocating a total of $4.6 billion to the state's border security efforts, which will largely go to three departments - $2.3 billion to the Texas Military Department, $1.2 billion to the Department of Public Safety, and $1 billion to the Office of the Governor. Texas has already spent just under $4.4 billion on Gov. Greg Abbott's border security program known as Operation Lone Star.
Both House and Senate draft spending bills propose $36.1 billion for the Texas Education Agency but note the Legislature also intends to increase funding for public schools. The Senate draft proposes increasing the teacher incentive allotment, a new program to reward teachers who raise student scores. The House draft also proposes raising funding per pupil, also known as the basic allotment, or putting more money into the instructional materials allotment, according to the proposed budget.
Raises for state employees
Both chambers' proposals include a pay raise for state employees - a 5% increase in September and an additional 5% increase in September 2024. The minimum increase is $3,000.
The House draft also lays out a pay raise for employees in the Texas Department of Criminal Justice, totaling $674 million. Of that, $374 million is for corrections officers and is already approved.
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Rural law enforcement
Patrick says that he wants to provide additional resources to rural law enforcement agencies. The Senate's budget places the cost at $350 million, which includes an increase in sheriffs' pay.
Supplemental appropriations bill
The House and Senate drafts also include plans for a supplemental spending bill, including:
$2.3 billion for state hospital construction and additional inpatient capacity.
$1 billion for a "one-time legacy payment" to the Employees Retirement System of Texas.
$600 million to TEA to assist school districts with school safety initiatives.
$400 million to the Water Development Board for flood mitigation.
$100 million to the Texas Parks and Wildlife Department for park acquisition.
$148.9 million to fund three months of a 5% pay increase, or $250 per month if greater, for classified state employees.
Both budget versions propose allocating an identical $27.1 billion for higher education over the upcoming biennium, according to the Legislative Budget Board.
That is a 2.6% decrease from the 2022-23 biennium, partially because colleges received extra federal funding due to COVID-19 during the previous two years.
Each budget proposes allocating $650 million more over two years for the state's community colleges and creating a $2.5 billion endowment to support higher education institutions that don't currently benefit from the Permanent University Fund, but both proposals are contingent on the passage of additional legislation.
The House budget notes that certain colleges and universities may receive additional state funding if they freeze tuition and fee prices at Sept. 1, 2023, levels for the next two fiscal years, but the specification is absent from the proposed Senate budget.
American-Statesman reporters Megan Menchaca and Keri Heath contributed to this report.
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This article originally appeared on Austin American-Statesman: Texas Legislature: Budget priorities: border security, tax relief