A closer look at the final Texas 2018-19 budget
Clashes between the Texas House and Senate dominated the 2017 legislative session, and the state budget process was no exception. After weeks of negotiations over how much to spend on public schools, border security, health insurance for the poor and disabled, and other services, the two chambers approved a $217 billion budget in late May. If Gov. Greg Abbott signs it, the new budget will go into effect on Sept. 1.
Here’s a look at how the two dueling budget proposals compared and what the two chambers ultimately settled on, using information from the Legislative Budget Board.
Two years ago, lawmakers passed a budget of just over $209 billion. This session, they backfilled some expenses, and the current budget grew to $216.4 billion.
The 2018-19 budget spends less than $500 million more over the next two years. At $216.8 billion, the budget is also less than both chambers' initial proposals. Before the Legislature reached a final agreement, the Senate proposed a $217.7 billion budget, compared with the $218.1 billion budget proposed by the House. General revenue, the portion of state funds that lawmakers have the most control over, makes up about half of the budget at $108 billion.
After passing tax cuts and a large investment in state highways in 2015, the Legislature this year struggled to find funding to pay for public programs. In the final days of the legislative session, the House and Senate reached a compromise to tap two alternative sources of funding to shore up the budget: withdrawing $1 billion from a savings account known as the Rainy Day Fund and using an accounting trick to free up nearly $2 billion dedicated to the highway fund.
Lawmakers agreed to spend $62.4 billion on Medicaid, the federal-state insurance program for the poor and disabled and one of the Legislature’s largest funding requirements. About 40 percent of Medicaid funds come from the state, with the federal government paying the rest of the bill.
The budget that lawmakers passed this year spends nearly $2 billion less on Medicaid than the previous two-year budget. Lawmakers have said they expect to face a Medicaid shortfall of at least $1 billion when they return for their next regular legislative session in 2019. At that point, they are likely to cover the shortfall via a supplemental budget bill.
After lawmakers made deep cuts in 2015 to a therapy program for children with disabilities, the new Medicaid budget includes some funding to increase payments to speech, physical and occupational therapists. The funding will restore about 25 percent of those cuts.
Public schools are another of the Legislature’s largest expenses, and the vast majority of that spending goes through the Foundation School Program. In the next two years, Texas public schools are expected to grow by more than 80,000 students annually.
While the $42.7 billion for the Foundation School Program in the 2018-19 budget is more than what was proposed by the House or Senate, it does not include an additional $1.5 billion that was the subject of debate between the two chambers.
The House sought to tie the extra state dollars for public education to school finance reforms, but negotiations failed after the Senate added a provision that would have subsidized private school tuition for some students — a move the House opposed.
Overall, state spending for public schools fell by about $1.1 billion, with local funds making up most of the difference. While the state share of public education spending falls, growing local property tax collections are expected to add about $1.4 billion to school funds.
Lawmakers did not approve extra funding for expanded pre-kindergarten programs, despite Abbott’s advocating for the funding. Instead, they required school districts to use $236 million from their existing funds to implement strict, “high-quality” standards for pre-K programs.
Lawmakers responded to a crisis in the state’s child welfare system with a roughly $500 million funding boost, which mostly went to Child Protective Services. The budget provides about $300 million to continue pay raises for many frontline caseworkers, including the 800 or so who were hired after an emergency order last year. Another $88 million will pay to hire an additional 500 caseworkers in 2018 and 600 more in 2019. And $95 million will go toward raising payments to foster care families and other providers.
The final budget includes $800 million to maintain a surge in border security funding that lawmakers approved in 2015, which pays mostly for the stationing of state troopers in counties near the Texas-Mexico border.
That was a victory for the Senate, which favored a plan to spend as much toward the issue as the state does in the current budget, which would be enough to hire 250 new troopers and 126 additional support staff. The House sought to reduce the border funding to $653 million, which would have continued funds only for existing troopers.
Though they disagreed over how much to spend, conservative lawmakers in both chambers said the state needed to largely maintain its recent increased level of border security funding despite a Republican president in the White House who has vowed to dramatically boost federal border security efforts.