During TX lege sessions, many bills come and go, try and die, but the one thing you can always count on biennially is the passing of the state budget. They gotta, it’s in the Texas Constitution! Just because it has to pass doesn’t mean it is without woes and upsets just as many bills in the capitol corridors. And if you’re like me, you’re probably just like, “Why this so hard? Aren’t we like the 10th largest economy in the world?”
There’s meticulous deliberation, consideration, fine tooth-combing, and slashing for this hefty state and its budget accordingly. Alas, with the economy comes a large set of rules and regulations to keep it alive, and that onus and its pitfalls usually come down on working Texans.
Budgets can be a sore subject, especially as many of us were like “unhand my stimmy, Joe.” And the Texas budget is a monster that unfortunately everyday Texans rarely get to be a part of. Here at WTFTxLege, we want everyone to see where the money goes, who follows it, and what things we can advocate for within it.
Today’s mantra comes from fellow Texan and Grammy winner Megan Thee Stallion:
“I’m on that cash shit. I’m in my bag, bitch.”
Process of the budget
Here’s a couple definitions to describe stupid economics words from ballotpedia.
- Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
- Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
State budgets are forward-thinking. They depend on predicted revenues and planned expenditures.
So, just imagine all of TX Lege trying to handle a budget in a world where an unpredicted and unplanned pandemic is happening. That’s not to skirt accountability, but to just point out the considerations this budget is taking. Texas’ budget mostly comes from sales tax revenue aka businesses being open and operating. Revenues were obviously going to be down as the pandemic pushed people inside.
And when revenue does not meet expectations, Texas has to make cuts, raise taxes, borrow money, or take money from the Rainy Day Fund – none of which Texas legislators really like to do.
The lifespan of the budget includes many steps. The background stuff happens for a majority of the timeline, but we are approaching the thick of it where floor action begins. Here’s a great example of the state budget process provided by the Texas Association of Counties.
When it comes to the budget and whose analysis we are looking for, it’s the state comptroller. Texas’ Comptroller is Glenn Hegar and for months he rang alarms, provided thoughts on where revenue would stand, and suggestions for when the lege would start drafting the budget. Hegar is our very own Paul Revere heeding warnings to be ready for and the lege is able to act accordingly. Since the pandemic started, we have seen a handful of heeds all changing as the circumstances and days do. Here’s a timeline of what the budget has been staring down:
April 2020 – Early into the pandemic, Hegar named the recession and said about the budget: “It’s probably going to be a revised downward adjustment of several billion dollars.” He suggested legislators be ready to cut spending or find some new source of money.
July 2020 – While sales tax revenues were down, the reopening of the economy in the summer helped only a bit. Rising cases forced Gov. Abbott to move capacity levels at restaurants down. Despite this, Hegar said sales taxes from takeout, delivery, and online shopping helped buoy revenue. He projected the state’s current two-year budget to be roughly $11.5 billion less than originally estimated.
November 2020 – Hegar presented virtually to Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen, who co-chair the budget board and said although revenue was still significantly down, it wasn’t as bad as he initially projected in the summer, once again due to takeout, delivery, and online shopping.
January 2021 – Hegar’s official revenue estimate concluded that $112.5 billion would be available for the two-year budget. The current budget would be under $1 billion down from past budgets, but still much less than anticipated from the summer, the Texas Tribune outlines.
March 2021 – With the economy improving and Hegar’s new optimistic estimate, the budget was looking up. At the federal level, the new 1.9 trillion COVID relief bill was signed which includes about $17 billion for Texas making the budget this session look even better.
There are three committees that deal with the budget. Overall, there is a good chunk of the lege focusing on the big bucks.
- Texas House: Appropriations Committee
- Texas Senate: Finance Committee
- Texas House: Ways & Means Committee
Rainy Day Fund
There’s always lots of talk about the economic stabilization fund – or rainy day fund. This is essentially our state’s savings and what many legislators see as an emergency only – one time use – fund. But this fund currently sits at $10 billion worth of unused money. And to many advocates, issue areas are emergencies. Climate justice is an emergency. Education is an emergency. Here’s a few bills and areas advocates and progressive legislators are looking at to use the rainy day fund.
The winter storm, snowpocalypse 2021 that hit Texas and caused widespread power outages resulting in some Texans receiving sky high electricity bills that should not be their responsibility to pay. The POWER Act, HB 3460, written by Rep. Ana Hernandez is a bill calling on the state to provide direct financial assistance to residents of this state who were affected by the winter disaster.
Gov. Abbott told state agencies to reduce budgets by 5 percent and shifts like that usually mean we will see cuts to big programs like public education, higher education, and healthcare. Even though he promised education would not be slashed in his State of the State address, this is usually the area it happens to, sadly. The senate’s proposed budget does protect teacher’s pay raises, but cuts costs to technology and materials which are incongruent to distant learning.
Many advocates consistently push for the rainy day fund to be used on education to make up for past cuts and more investment in our future. The pandemic also exacerbated gaps in education as distant learning took hold. Higher education officials are asking for an investment in colleges and universities because of this.
Progress in the budget is underway, but with a lot of work to go. Gov. Abbott has released his proposed budget as has the Senate and House, both of which look similar and are $7 billion over what Comptroller Hegar said the chambers had to spend.
We are looking at budget cuts unless we dip into the rainy day fund or find another source of money. The COVID relief bill may have helped this, but we have yet to know by how much and what will continue to go down as the budget progresses. We should see floor action begin within the next few weeks. Until then, stay in your bag, friends.