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The House Committee on Appropriations meet to hear invited testimony on: Public Education Funding, Medicaid, Mental Health, School Safety, Child Protective Services, Border Security Funding, Transportation, and other budget matters.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

LBB presentations*

*The testimony below may contain a brief description/title of slides referred to in the presentation to help identify the key subjects pointed out in their testimony.

 

Zerwas Opening Remarks

  • Points out all presentations are from the Legislative Budget Board (LBB), reminds them there may be agency questions that will largely occur in subcommittees

 

Aaron Henricksen, LBB – Foundation School Program

  • 2 – Overview of FSP, principle vehicle for sending state aid to districts
  • 3 – HB1 appropriates $9 billion in additional GR funds, contingent on enactment of legislation that:
    • Supports school districts and charter schools by increasing the state share of the FSP;
    • Enhances district entitlement;
    • Reduced recapture; and
    • Provides local property tax relief;
    • While maintaining an equitable system of school finance.
  • This $9 billion increase results in a net $7.4Billion GR Increase for the FSP compared to 2018-19.
  • 4 – MOFs in HB1, unrestricted general revenue will adjust to make up the difference in estimates.
  • 5 – Tier 1 Funding: Basic allotment ($5,140), Equalized Wealth Level ($514,000 per WADA). Tier 2 Funding: Austin ISD Yield ($126.88 per penny per WADA in 2020 and $135.92 per WADA in 2021).
  • 6 – Student Growth – ADA growth of 1.28% annually in the 2020-21 biennium.
  • 7 – FSP Base compared to HB1.
  • Howard – asked clarifying questions on the increase of $9 billion actually being $7.4 billion when you include decrease property values
    • Yes
  • Howard – asked question on state funds vs local, is recapture reflected as state funds
    • Recapture only local source which comes through the state fund and not meant to show the state local split
    • Wanted to point out the state was appropriating recapture which are local dollars
  • Stuckey – asked about Austin ISD yield
    • Provided more detail noting it is the first pennies above Tier 1
  • Zerwas –Can you speak on the amount of dollars required to achieve a 50/50 split? That number could bump up the BA and it would be substantial to what it does for FSP
    • We can get you this number.
    • Zerwas – recalls amounts approx. $15 billion in terms of tax compression, $30 billion if just GR, this is a step in the right direction
  • Gonzalez – After you count for enrollment, inflation, special education then it really starts to dwindle down
  • Bonnen – does not see this issue as something that can be fully and entirely addressed in one biennium, may take more than one cycle
  • Walle – State in local match for 2020 is 41.1%, what is the current state local match?
    • 8%.
  • Sherman – Give example of helping daughter paying her college tuition, the state has some responsibility to pay into public education. State share used to be much higher.

 

Mike Diehl, LBB – Medicaid

  • 2 – Overview.
  • 3 – Federal Requirements.
  • 4 – Medicaid waivers.
    • Zerwas asked Diehl to go back and review 1915 (c)
    • 1915(c): on elder care, home and community-based services, death-blind multiple disability labor, etc. – not an entitlement so agency is limited to an appropriated amount
  • 5 – Budget drivers: Medicaid expenditures are functions of caseload and cost.
  • 6 – Monthly Full-Benefit Caseload by Enrollment Group FY2006-2021.
    • Children eligibility group increased
  • 7 – Monthly Full-Benefit Caseload by Delivery Model FY2006-2021.
  • 8 & 9 – Managed Care Delivery Models.
    • Increase from approx. 65.7% to 93.3%
  • 10 – Medicaid caseloads have doubled since 2001. Events contributing to caseload growth are included here.
  • 11 – Cost growth definitions.
  • 12 – For 2020-21 biennium, GR related funds are decreasing, and Federal funds are increasing.
    • Zerwas clarifies that the program is still growing as a whole, even if they are decreasing the budget on Medicaid, because of the increase in federal dollars.
    • Zerwas asks for information on FMAP.
  • 13 – FMAP determines federal share of the cost for the Medicaid program. FMAP calculation is based on the three most recent years of income data available.
    • State FMAPs can range from 55% – 83%.
    • Bell asked Diehl to go back and explain what “other funds” stands for on page 12.
    • Other funds include non-GR funds. For instance, appropriated receipts match for Medicaid.
    • Toth asked Diehl to provide the committee with a schedule of FMAP percentages for all 50 states.
    • Toth asked Diehl for a 10-year trend map of FMAP percentages for all 50 states.
  • 14 – Shows both U.S. and TX per capita personal income and resulting FMAP trend.
    • Texas FMAP is 60.89% for 2020. The 2021 FMAP will be announced in November, but it is projected to be 61.96%
  • 15 & 16 – Other matching rates available for certain client services that are matched at a rate other than the FMAP.
    • There is an enhanced FMAP that further reduces the State’s share by 30% that applies for Medicaid for breast and cervical cancer. The majority of Medicaid and Administrative expenses are matched at 50-50, but matching rates can be as high as 90-10.
  • 17 – HB1 includes $67.6 billion in all funds and $25.2 billion in GR funds for the Medicaid Program.
    • This is an increase of $2 billion in all funds and a decrease of $1.4 billion in general revenue funds.
  • 18 – Funding level includes project caseload growth and maintains FY2019 average cost for most services.
    • The decrease in GR is due to a favorable FMAP.
  • 19 – Medicaid funding by category.
    • 1% is for Medicaid Program Client Services
    • 3% is for Administration.
    • 6% is for other programs where Medicaid is a source of funding. E.g., ECI and SSLCs
  • Zerwas – asks for insight on the relative amount of money that goes to elder care compared to women and children?
    • Will follow up with those numbers. Generally speaking, children make up one of the largest caseload groups, but are responsible for the smallest amount of cost.
  • Minjarez – asks for clarification on the meaning of enhanced FMAP?
    • Enhanced FMAP is for specific services, which includes the Medicare for breast and cervical cancer. It is a more favorable FMAP that reduces the share of state dollars.
  • Zerwas – asks for information on the matching rate in the CHIP program under the ACA?
    • Under the ACA, the enhanced FMAP rate had an additional 23% increase above the normal enhanced FMAP. Most recently, under the CHIP renewal, there is only an 11.5% increase above the enhanced FMAP rate for FY 2021. After FY2021, the increase will go away.
  • Howard – On slide 11, what we are funding here is on projected growth in the population. Know we have an issue on have enough providers because we already have low rates – but not at this point saying that will be increased, etc.
    • Only includes case load growth.
    • Howard – feels that is unrealistic.
  • Davis – We don’t ever fund cost growth in the budget because it is difficult to predict. We fund case growth.
  • Davis – I’m well aware of that, but it is important to notice our waitlists and that we have inadequate (number) of providers. We need to be clear about the fact that these are things we will have to discuss.
  • Walle – In general, when we draw out federal money, what specifically happens in our budget process to draw these monies down?
    • The agency will be better able to answer this question.
  • Walle – know there were issues with waivers in the past….stops his question and says he will wait to discuss with the agency
  • Rose – The 1115 waiver was due to expire last session, what is the status of that?
    • The current 1115 has been renewed for an additional 5 years.

 

Samantha Brock, LBB – Behavioral Health Services

  • 2 – Behavioral Health Services overview.
  • 3 – Biennial Comparison for funding BHS.
  • 4 – Biennial Comparison for BHS funding. (CHIP and Medicaid)
  • 5 – Overview of Article IX Section 10.04.
  • 6 – Article IX Section 10.04.
  • 7 – HHSC received $300 million in ESF funding in 85th legislature.
  • Zerwas – may have misspoken on amounts of funding for state hospital in Monday, cost is significant and information will be given out to the committee
  • Wu – Would you be able to provide a change over time in the number of beds for the different types of beds and the waiting list to get to certain types of beds? Including expected future increases.
    • We can get this information to you.
  • Zerwas – We have an interest in better funding Behavioral Health Services, on the heels of the Sandy Hook massacre, we believe that this is an incredible need. We can take pride in the $7 + billion figure in BHS.

 

Tedd Holladay, LBB – School Safety

  • 2 – Overview of Funding for School Safety in HB1, by method of finance.
  • 3 – Overview of Funding for School Safety among public education agencies $66.4 million AF. Includes $54.5 million AF for TEA. Slide 3 also details on the Safety and Healthy Schools Initiative.
  • 4 – Pg. 3 Cont’d.
  • 5 – Funding at $31.2 million at Higher Education Institutions, includes Texas Tech and Texas State funding.
  • 6 – Funds for $11.8 million in All Funds HHSC.
  • Cortez – A lot of your funding is coming from the Safety and Healthy Schools Initiative; what input did superintendents have on this?
    • We can get with the agency and get more of a description on the superintendents’ involvement.
    • Cortez – looking forward to hear what TEA did to reach out to superintendents
    • Zerwas – do think this is based on Governor’s conversation but point is well taken
  • Toth – $5 million at Regional Education Centers, what is the number of ESCs?
    • I believe it is roughly 20 – don’t recall exact number.
  • Toth – What would the employees at the ESCs be doing?
    • We can get you more information on that.
    • To clarify, we described 6 FTEs associated with Safe and Healthy School Initiative that would be supported at TEA
    • The FTEs in the $5 million will be at the ESC, so we do not have as much detail since they are not at the agency.
    • LBB – one of the goals of ESC funding is related to technical
  • Walle – On Pg. 3, ESF breakdown, the $10 million matching grants what is it being used for?
    • I believe it is for improvements like metal detectors, alert systems, entrances that are sequestered and secured, etc. It will vary significantly by schools.
  • Walle – The ISDs will have to put in some of their own money because $10 million will not be enough, right?
    • Correct, this would act as a matching grant.
  • Sherman – On slide 2, under funds for school safety initiatives, what is the formula we use for ESF funds?
    • Generally speaking, the ESF funds were used more for one-time expenditures. E.g., facility hardening funding.
  • Sherman – I understand it is a one-time use, I am just curious on why it is 40%?
    • That is just a legislative decision and LBB to include it this way, it was not a formula-based decision.
  • Johnson – To clarify, how did we come to the numbers that we have, the FTEs, and the decisions to be made on certain items?
    • Specifically, on the Health and Safety school’s initiative, this was informed by the agency. Some of the work was also informed by the governor, and some was done after an internal needs assessment at the agency and their work with school districts.
    • Many items were informed by reports from TEA.
    • Several recommendations from the House and Senate interim committees as well
    • Will defer to TEA on where each item came from
    • Johnson – would like details on how they arrived at the decisions
  • Bonnan – This is an issue that is extremely important to me and my constituents, does not think what is in the base budget is the final answer and anticipates some more funding and funding on an ongoing basis for SROs and Counselors
  • Zerwas – reiterates comments that this is an important issue and this process is about helping guide the House, this is just the beginning and far from what final bill will look like

 

Andrea Nikic, LBB – CPS

  • 2 – Overview.
  • 3 – CPS Overview.
  • 4 – CPS Process Overview.
  • 5 – How funding is aligned to the CPS Process. (Highlights new B.1.12)
  • 6 -7 – CPS Recommendations in HB1.
  • Wu – On Slide 6, the biennial difference between base and HB1, it is just your recommendation, not considering the court rulings on standards?
  • 8-9 – CPS Recommendations in HB1.
  • Zerwas – Do you recall the ratio of caseload to caseworker? 1 to 15 active cases?
    • We will need to follow up with that ratio. HB1 funds the lower ratio that was funded last time.
  • Zerwas – Do they take into consideration any of the turnover?
    • We can follow up on specifics, but turnover has decreased since pay increases. The addition of caseworkers has also brought the ratio down.
  • Toth – Where retention stabilizes, is it more in the community-based care regions?
    • The turnover decrease was related to caseworker and delivery staff. We do not have information on community-based care programs.
  • Toth – Community based care programs came out of the last session?
    • SB11 expanded community-based care.
  • Toth – Do we have a dashboard on its effectiveness?
    • We do, the information that we have indicates increased improvement in some cases. We can give you some specifics on that.
  • Walle – We gave CPS case works a pay increase last session, does this budget reflect that increase?
    • Yes, it maintains the increase.

 

Angela Isaak, LBB – Border Security

  • 2 – Listing of items that have been funded and designated over the last decade as border security items.
  • 3 – State appropriations for Border Security, FY 2018-19
  • 4 – Border Security Funding Recommendations in HB1, Significant amount going to DPS
  • 5-7 – Details on what is funded through each agency.
  • 8 – Information on border security at the federal level.
  • 9 – Number of apprehensions by border patrol agents.
  • Cortez – What type of assistance is coming from the federal government or are there any reimbursements coming from D.C?
    • There are not. There is no federal funding coming into DPS or any border security agency. In the past, the Governor has deployed the national guard to the border at the expense of the state. Last April, when the President deployed guards to the border which became a 100% federally funded mission. Today there about 1,200 national guard on the border that is funded by the federal government.
    • LBB staff – The state of Texas receives criminal justice grants from the federal government yearly with those funds being spent along the border counties, but they are not specifically appropriated to the state for border security.
  • Munoz – With the border security funding, there is also a component of radio infrastructure?
    • Yes, at DPS there is about $700,000 for training of locals who have the new system, and at the governor’s office, there is $10 million for locals to move on to the new radio system.
    • LBB staff – not everyone uses the same technology and there are a couple federal grants that have come into the state to help, effort is to try to get all to communicate on the same system

 

Thomas Galvan, LBB – Transportation

  • 1 – Overview of TxDot Funding in HB1.
  • 2 – Pg. 1 Cont’d.
  • 4 – State Highway Fund Overview.
  • 5 – Proposition 1 Transfers to SHF.
  • 6 – Proposition 1, Cont’d.
  • 7 – Proposition 7 Funding.
  • 8 – Proposition 7, Cont’d.
  • Shafer – Does the overall revenue for transportation funding rely on debt more or less?
    • The recommendation does not include any money from the bond programs.
  • Howard – Couple of sessions back, we were told by TxDOT that they needed $5 billion per year in funding to control levels of congestion. Are we at the point where we can maintain current levels of congestion?
    • This is a question for the agency. Thinks they are close to the number by maybe not at $5 billion.
    • Howard – takin surplus and directing it to transportation which is good but it means we have less for other things
  • Minjarez – On page 7, can we look somewhere to see what has actually been repaid in principal interest on Prop 12?
    • The principal outstanding is about $3.9 billion.