The House base budget has been published along with budget estimates by Strategy Art. I-III, budget estimates by Strategy Art. IV-X, and a summary of the House budget estimates. The base budget is a starting point in discussions as both chambers begin to discuss the state’s funding priorities for the next two years.
RECOMMENDATIONS SPOTLIGHT
For the 2020–21 biennium, funding includes the following key budget items:
ECONOMIC STABILIZATION FUND
- Appropriations of $633.0 million from the Economic Stabilization Fund are included for the 2020–21 biennium. The resulting cash balance of the fund plus the total asset value of investments is estimated to be $14.7 billion at the end of fiscal year 2021.
FOUNDATION SCHOOL PROGRAM
- Funding of $52.6 billion in All Funds is provided for state aid to school districts and charter schools through the Foundation School Program (FSP). General Revenue Funds appropriations for the FSP total $42.0 billion, which represents an increase of $7.4 billion from the 2018–19 biennium.
- General Revenue Funds provided for the FSP represents an increase of $9.0 billion over what is estimated to be required to fund the current law FSP entitlement, contingent on enactment of legislation supporting school districts and charter schools by increasing the state share of the FSP, enhancing district entitlement, reducing recapture, and providing local property tax relief, while maintaining an equitable system of school finance.
- The All Funds amount represents a $9.9 billion, or 23.1 percent, increase from the 2018–19 biennium, primarily attributable to the additional $9.0 billion in General Revenue Funds above statutorily required amounts. The remaining $0.9 billion All Funds increase is attributable to a projected increase of $2.4 billion in recapture revenue and a projected $171.7 million increase from the Property Tax Relief Fund, partially offset by a decrease of $1.6 billion in General Revenue Funds required to fund current law entitlement.
- Funding for current law FSP entitlement includes an estimated $2.4 billion for student enrollment growth and $2.2 billion in additional state aid greater than the 2018–19 biennial funding level for the Tier 2 enrichment funding guaranteed yield associated with the Austin Independent School District.
- FSP Other Funds are increased by $2.5 billion, attributable to a projected $2.4 billion increase in recapture payments and a projected $171.7 million increase from the Property Tax Relief Fund.
MEDICAID
- Funding for the 2020–21 biennium includes $67.6 billion in All Funds, including $25.2 billion in General Revenue Funds and $0.1 billion in General Revenue–Dedicated Funds, for the Texas Medicaid program. This amount is an increase of $2.0 billion in All Funds and a decrease of $1.4 billion in General Revenue Funds from 2018–19 biennial levels.
- Included in these amounts is $62.9 billion in All Funds for Medicaid client services, $1.7 billion in All Funds for programs supported by Medicaid funding, and $2.9 billion in All Funds for administration of the Medicaid program and other programs supported by Medicaid funding. The net increase in Medicaid funding is due to a $2.0 billion All Funds increase in Medicaid client services and a $69.2 million All Funds increase in other programs supported by Medicaid funding offset by a $33.7 million All Funds decrease in administrative funding.
- Increased All Funds funding for Medicaid client services supports caseload growth, maintains fiscal year 2019 average costs for most services, and provides funding for cost growth associated with average costs established by the federal government. More favorable Federal Medical Assistance Percentages result in a higher proportion of the program being funded with Federal Funds, more than offsetting increased General Revenue Funds demand associated with caseload and costs, resulting in an overall decrease to General Revenue Funds of $1.4 billion. Full funding for anticipated increases in cost due to medical inflation, higher utilization, or increased acuity is not included.
- The 2018–19 biennial amounts for Medicaid assume supplemental funding to complete fiscal year 2019 expenditures.
TRANSPORTATION
- Recommendations provide $31.6 billion in All Funds for all functions at the Department of Transportation, which includes the following amounts: an estimated $5.0 billion in funding from anticipated state sales tax deposits and $0.1 billion from motor vehicle sales and rental tax deposits to the State Highway Fund (SHF) (Proposition 7, 2015); $4.3 billion in funding from oil and natural gas tax-related transfers to the SHF (Proposition 1, 2014); and all available SHF funding from traditional transportation tax and fee revenue sources, estimated to be $9.3 billion for the 2020–21 biennium).
- Recommendations provide $27.8 billion in All Funds for highway planning and design, right-of-way acquisition, construction, and maintenance and preservation. Th e All Funds amount includes $10.8 billion in Federal Funds; $7.6 billion from traditional SHF revenue sources; $4.5 billion from Proposition 7, 2015, proceeds and $4.3 billion from Proposition 1, 2014, proceeds for constructing, maintaining, and acquiring rights-of-way for nontolled public roadways; and $0.5 billion from the Texas Mobility Fund and regional toll project revenues.
- Recommendations provide $2.2 billion in All Funds for debt service payments and other financing costs, including $1.5 billion in Other Funds from the SHF and Texas Mobility Fund; $0.6 billion in Other Funds from Proposition 7, 2015, SHF proceeds for General Obligation bond debt service; and $117.0 million in Federal Funds from Build America Bond interest payment subsidies.
BEHAVIORAL HEALTH
- Funding includes $4.0 billion in All Funds ($3.0 billion in General Revenue Funds and General Revenue–Dedicated Funds) for non-Medicaid/Children’s Health Insurance Program (CHIP) behavioral health services. Funding supports programs at 23 agencies across six articles, and includes the following areas: funding for inpatient client services at state hospitals and community hospitals; outpatient services provided through local mental health authorities and local behavioral health authorities; substance abuse prevention, intervention, and treatment services for adults and children; mental healthcare and substance abuse treatment for incarcerated off enders; mental healthcare services for veterans; and other services.
- Medicaid expenditures for behavioral health services, when including projected cost growth that is not funded, are estimated to total $3.4 billion in All Funds for the 2020–21 biennium. CHIP expenditures, when including projected cost growth that is not funded, are estimated to total $111.7 million in All Funds. Total behavioral health-related funding, including estimated Medicaid and CHIP expenditures, is estimated to be $7.5 billion in All Funds for the biennium.
SCHOOL SAFETY
- Funding for school safety programs includes an additional $109.4 million in All Funds, including $64.9 million in General Revenue Funds, $43.6 million in Other Funds from the Economic Stabilization Fund, and $0.8 million in Federal Funds at the Health and Human Services Commission and public and higher education agencies and institutions.
- All Funds amounts for the 2020–21 biennium include the following areas:
-
- Health and Human Services Commission – $11.8 million to expand Children’s Community Mental Health;
- Public education – $54.5 million for the Safe and Healthy Schools Initiative, and an increase of $10.0 million for Communities in Schools at the Texas Education Agency; $1.1 million for campus safety staff and infrastructure at the Texas School for the Deaf; and $0.8 million for campus safety infrastructure at the Texas School for the Blind and Visually Impaired; and
- Higher education – $20.0 million for Texas Tech University Health Sciences Center’s Telemedicine Wellness Intervention Triage and Referral Program (TWITR); and, at Texas State University, $7.2 million for the School Safety Center and $4.0 for Advanced Law Enforcement Rapid Response Training.
HIGHER EDUCATION FORMULA FUNDING
- Higher education formulas are supported by $7.3 billion in General Revenue Funds and $1.5 billion in General Revenue–Dedicated Funds. Included in this amount are increases of $158.4 million in General Revenue Funds and an increase of $55.9 million in General Revenue–Dedicated Funds, which primarily is statutory tuition.
- For most of the higher education formulas, the 2018–19 biennial rate is maintained..
TEACHER RETIREMENT AND HEALTH BENEFITS
- Funding of $4.1 billion in All Funds is provided for the state contribution to retirement benefits of the Teacher Retirement System (TRS), including $4.1 billion in General Revenue Funds, $48.8 million in General Revenue–Dedicated Funds, and $9.1 million in Other Funds from the Teacher Retirement System Pension Trust Fund. Funding represents a state contribution rate of 6.8 percent of employee payroll for each year of the 2020–21 biennium.
- Retiree health insurance funding totals $1.1 billion in All Funds. Funding includes $879.4 million in General Revenue Funds to provide a statutorily required state contribution to TRS-Care of 1.25 percent of public education payroll. Funding also includes $230.8 million greater than statutorily required amounts in Other Funds from the Economic Stabilization Fund to maintain plan year 2019 TRS-Care premiums and benefits for the 2020–21 biennium.
- Funding for TRS assumes 3.9 percent annual public education payroll growth across retirement and TRS-Care strategies and 5.6 percent annual higher education payroll growth. Th ese assumptions are based on payroll and method of finance trend data.
TRUSTEED PROGRAMS WITHIN THE OFFICE OF THE GOVERNOR
- Funding for the Trusteed Programs within the Office of the Governor totals $1,277.5 million in All Funds for the 2020–21 biennium, a decrease of $202.2 million, or 13.7 percent, from the 2018–19 biennium.
- Funding of $100.0 million from the Economic Stabilization Fund is provided for disaster grants.
- Funding for economic development and jobs creation is included in Strategy C.1.1, Create Jobs and Promote Texas, which includes programs for economic development, tourism, film and music marketing, the Texas Enterprise Fund, military community support, and the Governor’s University Research Initiative. Funding in the strategy for various economic development programs totals $365.0 million in All Funds for the 2020–21 biennium, including the following amounts:
-
- $111.9 million in estimated unexpended balances remaining at the end of fiscal year 2019 in the Texas Enterprise Fund for incentive grants, a decrease of $45.3 million in General Revenue–Dedicated Funds;
- $26.2 million in estimated unexpended balances remaining at the end of fiscal year 2019 in the Governor’s University Research Initiative for recruitment grants, a decrease of $27.1 million in General Revenue–Dedicated Funds;
- $100.4 million in General Revenue–Dedicated Funds from Hotel Occupancy Tax deposits for tourism promotion. This amount is the same amount of $34.2 million appropriated for the 2018–19 biennium, plus projected unobligated balances estimated at $66.2 million; and
- $50.0 million in General Obligation Bond Proceeds for the Military Value Revolving Loan Program for loans to defense communities for economic development projects at the Texas Military Preparedness Commission.
INFORMATION TECHNOLOGY
- Funding for the Centralized Accounting and Payroll/Personnel System (CAPPS) totals $150.5 million. Included in this amount is $96.8 million for the Comptroller of Public Accounts (CPA) for ongoing statewide CAPPS operations and agency transitions to the system.
- Funding for Cybersecurity projects and initiatives totals $42.9 million to decrease the risk of threats to the confidentiality, integrity, and availability of existing data and information systems.
- Funding for Legacy Modernization projects totals $600.3 million to replace systems with obsolete or inefficient hardware or software technology.
- Funding for other information technology (IT) projects totals $401.4 million
*Items above are listed in the Highlights of the Summary document.
