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The House Appropriations Subcommittee on Articles I, IV & V met on February 11, 2019 to hear invited testimony from the Secretary of State, Historical Commission, Office of the Governor & Trusteed Programs, Commission on the Arts, Commission on State Emergency Communications, Public Finance Authority, Employee Retirement System, Texas Emergency Services Retirement System, Bond Review Board, Pension Review Board, and the Facilities Commission. The subcommittee also heard public testimony at this time.

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.

 

Secretary of State

John Montgomery, Legislative Budget Board

  • Presented recommendations for the Secretary of State.

David Whitley, Secretary of State

  • Exceptional items:
    • $3.6 million in biennial budget for primary elections.
    • $500 thousand for replacement of business filing transaction system.
    • $2.8 million to replace appropriated receipts to pay for benefits proportionality.
    • $300 thousand in appropriated receipts to replace PCs, laptops, and printers.
    • $1.9 million for ongoing maintenance of the TEAM system.
    • Two FTEs to facilitate CAPPS implementation.
    • $1.4 million to facilitate county election security training.
    • $3 million to increase primary election poll worker reimbursement from $8/hr. to $12/hr.
  • Wu – Can you break down how the HAVA funding is being spent?
    • We used 23M in federal funding for security assessments and updates to the TEAM database. We also used funds for security assessments audits.
  • Wu – What are the security assessments?
    • Database security, intrusion tests, anything that counties might need. Counties voluntary sign up for these audits.
  • Wu – The voter education funds related to voter identification is about $4 million, how is that being used?
    • We used about 90% on an outreach campaign. Will provide the members an overall assessment of the effectiveness of the campaign.
  • Longoria – Why does the agency need additional funds for their filing system?
    • The exceptional item for our filing system is so that we can start the system auditing process.

Historical Commission

Lena Canklin, Legislative Budget Board

  • Presented recommendations for the Historical Commission.
  • Recommendations equal about 40M, 43% change from 2018-2019 base.

John Nau, Chairman, Historical Commission

  • Exceptional Items:
    • $2.9 million in GR funds for additional FTEs to support Agency Programs.
    • Additional funding is needed for programs if sunset’s recommendation to move certain programs from parks department to THC goes through. E.g., battleship.
    • $36 million in Grant Funding for Historic Courthouse restoration program.
    • $853 thousand for vehicle replacement, 30 vehicles, at historic sites.
    • Texas Heritage Trails support is currently at $1.5 million, requesting an additional 500K.
    • $2.8 million for historic sites and agency office deferred maintenance.
    • $2 million for the Levi Jordan Plantation Capital Project.
    • $2.1 million for Nimitz Museum Capital Project.
    • $226 thousand for CAPPS implementation.
    • $605 thousand in preservation grants.
    • $160 thousand for THGC Genocide Education Program.
  • Wu – Where are we at on the battleship?
    • Better asked question for parks. Battleship has been in saltwater for years and needs serious restoration. Commissioner has heard that an estimated $100 million might be needed to restore ship.

Office of the Governor

Jordan Smith, Legislative Budget Board

  • Presented recommendations for the Office of the Governor.
  • Wu – Is there an agency in the state that works with the upcoming census?
    • Might be the SoS.

Trusteed Programs Within the Office of the Governor

Jordan Smith, Legislative Budget Board

  • Presented recommendations for the Trusteed Programs within the Office of the Governor.
  • Disaster funding recommendations include $100 million in ESF for 2020-21.
  • Economic Development and Tourism Goal recommendations include $365 million in all funds for 2020-21.
  • Recommendations for Texas Military Preparedness Commission include $50 million in bond proceeds.
  • TEF and GURI recommendations include $111.4 million and $26.2 million respectively.
  • $52 million in GR funds for border security.
  • $10 million in GR-D funds for NIBRS.
  • Johnson – About $14 million was unexpended in GURI?
  • Johnson – Were those funds allocated and the universities just didn’t develop the research?
    • We can get back to you on the specifics of those funds.
  • Capriglione – what happens to funds that are obligated to a specific purpose, but the purpose is not fulfilled.
    • If funds are obligated for a specific purpose, and those purposes do not go through, they will stay in that GR-D fund.
  • Wu – Why is the 2021 funding $0 for the spaceport?
    • There was no funding requested for this program.
  • Johnson – Did we spend all of the money available for the bullet proof vest program?
    • Funds were appropriated and the agency requested $5 million for this program.

Jordan Hale, Deputy Chief of Staff, Office of the Governor

  • Capriglione – Why is there a significant amount of unexpended balances, specifically in Economic Development and Tourism?
    • We keep funds in our unexpended balance for potential projects coming into Texas, such as the Amazon project.
    • Business timelines work separate from government timelines, so we keep funds to anticipate any requests.
  • Miller – Asked for an overview of DR funds.
    • Last biennium we received $20 million, and we contracted out all of the funds.
  • Capriglione – Can you talk about the projects and benefits of the economic development and tourism funds?
    • We asked for $36.2 million and are asking for an additional $20 million. These types of projects tend to stimulate the economy in Texas.
  • Longoria – Can you give us more information on the anti-gang initiative?
    • We are requesting two additional tag units. Funds are used to pay for equipment, supplies, housing, etc.
  • Longoria – How many tag units do you have so far?
  • Longoria – When the gangs are located, are they taken to the local D.A.?
    • Yes, and we also have border prosecutors in areas where border crime is a significant issue.
    • We requested $14 million for additional investigators and prosecutors in those two additional tag units.

Commission on the Arts

Katy Fallon-Brown, Legislative Budget Board

  • Presented recommendations for the Commission on the Arts.

Gary Gibbs, Executive Director, Commission on the Arts

  • Exceptional items:
    • $5 million in cultural district grants funding cities. Would provide grants for 50 projects and cover infrastructure, marketing, and event support.
    • $500 thousand is being requested for Military Arts Healing Grants for active service military and veterans.
    • $50 thousand is being requested for CAPPS implementation.
  • Johnson – Is the military arts program done in conjunction with other programs?
    • It was initiated by the National Endowment for the Arts. The program works with local organizations to help active service military and veterans who suffer from mental health issues.
  • Wu – Emphasizes the importance of culture and arts in the economic development of Texas.

Commission on State Emergency Communications

John Montgomery, Legislative Budget Board

  • Presented recommendations for the Commission on State Emergency Services

Kelli Merriweather, Executive Director, Commission on State Emergency Communications

  • CSEC needs funding to transition from analog Enhanced 9-1-1 system to a digital IP based system, Next Gen 9-1-1.
  • Revenue collections from the 9-1-1 service fees are projected to be $84.3 million for the 2020-21 biennium.
  • Requesting additional funding for IT projects, equipment replacement and maintenance, salary adjustments, public education and awareness, and for the Poison Control Network.
  • Capriglione – How much are you delayed on the IT project?
    • 12 months. We are trying to update our IT project to keep up with current technology.
  • Capriglione – Have you gone out for bid?
    • We have not.
  • Capriglione – Have you chosen a vendor yet?
    • The vendor would be at&t.
  • Capriglione – How do you handle cyberattacks to your network?
    • We do not see any as of right now, but we anticipate security risks.
  • Wu – Do we have an understanding of why cyberattacks are happening?
    • I’m not sure that we have the resources to come to that understanding.
  • Wu – The emergency and 9-1-1 service you provide is just for the areas that cannot manage their own system, correct?
    • Yes, we oversee rural areas and help fund their programs.
  • Wu – During Harvey, the Harris county 9-1-1 system was overwhelmed, was there similar issues down by the costal bend area?
    • Houston did a great job with what they were dealt. With the next gen 9-1-1 system, it would be possible to send calls inland and dispatch local responders. Down by the costal bend, the problem was that cell towers were blown down. People could not make the calls even if they wanted to.
  • Wu – Weather proofing the towers would the responsibility of the service provider, correct?
  • Wu – Was there an increase in the number of calls to poison control from people eating tide pods?
    • People do crazy things. Unfortunately, the agency has seen an increase in opioid related calls.
  • Longoria – Can you elaborate on the equipment replacement and maintenance funding request?
    • Projected for 2020-21 biennium, we need an additional $14 million to fund our planned equipment and maintenance schedule.
  • Longoria – Can you explain the need for grants to hire Texas Poison Control Network Medical Directors?
    • The need for that is to expand the medical director’s capacity to a certain extent.

Public Finance Authority

Louellen Lowe, Legislative Budget Board

  • Presented recommendations for Public Finance Authority. Recommendations continue funding of $295,736 in Bond Revenue proceeds set-asides and $1 million in TPFA Master Lease Project Funds.
  • Presented recommendations for General Obligation Bond Debt Service.

Lee Deviney, Executive Director, Public Finance Authority

  • Requesting additional funding for:
    • CAPPS implementation
    • Staff promotions and merit increases.
    • Executive Director salary increase.
    • Debt Management System.
    • Replacement of computers.

Employees Retirement System

Katy Fallon-Brown, Legislative Budget Board

  • Presented recommendations.
  • $22.9 million increase for ERS Retirement Program contributions.
  • $2.5 million increase for JRSI contributions.
  • $176.6 million increase for Group benefits program contributions.
  • Recommendations for ERS total $1.3 billion in all funds.
  • State contribution rates may not exceed 10% of the aggregate compensation paid to individuals participating in the system, unless the governor has declared an emergency.
  • Recommendations total $16.9 million in all funds for LECOS retirement fund.
  • $27.5 million in recommendations for JRSII.
  • $30.2 million for a ten percent judicial salary increases.
  • $4 billion in recommendations to GBO to provide state employees and retirees with health and life insurance.
  • ERS did not request an increase in state contributions because the Group Benefits Program achieved significant savings in PBM and TPA contracts.

Porter Wilson, Executive Director, Employees Retirement System

  • HHSC, TDCJ, and TxDOT make up 60% of the contributing members to the main ERS fund.
  • ERS normal costs are being met. If nothing happens by 2096, the main ERS fund will run out of money and turn into a pay as you go plan.
    • Agency is requesting $503.1 million in all funds to achieve an actuarially sound contribution rate of 23.14%.
  • LECOS normal costs are not being covered. The depletion date for LECOS is 2045.
    • Agency is requesting $70.2 million in all funds to achieve the ASC rate of 3.08 percent.
  • JRS 2 normal costs are being met. There is no depletion rate.
    • Agency is requesting $2 million in all funds to achieve the ASC rate of 24.29.
  • Agency requests a total of $575.4 million in all funds for the items not included in recommendations.

Texas Emergency Services Retirement System

Katy Fallon-Brown, Legislative Budget Board

  • Presented recommendations for the TESRS. Recommendations for the 2020-21 biennium include annual contributions of $1.3 million.

Kevin Dieters, Executive Director, Texas Emergency Services Retirement System

  • Agency is requesting $170 thousand in additional funding to contract with cybersecurity firms for pension system security.
  • Agency is requesting $73 thousand in additional funding to outsource annual financial reporting and investment accounting functions.
  • Longoria – Is the cybersecurity funding request for a consultant or for software?
    • The funding would be for both, but primarily consulting.
  • Longoria – Requested a breakdown of how the funds would be used.
  • Capriglione – What kind of vulnerable personal information does your agency obtain?
    • We have names, addresses, DOB, payment history, social security numbers, etc.

Bond Review Board

Louellen Lowe, Legislative Budget Board

  • Presented recommendations for the Bond Review Board.

Rob Latsha, Executive Director, Bond Review Board

  • Exceptional items:
    • Funds for a contracted database administrator.
    • Funds for Public Entity and Employment Practices Liability insurance coverage.
    • $106 thousand for website upgrades to consolidate Texas state and local debt data into one centralized database.
    • Funds for Disclosure/Tax Counsel services.
  • Longoria – Could you elaborate on what the counsel services are for?
    • The idea would be for us to have tax counsel to provide opinions on new MSRB rules.
  • Longoria – Do you anticipate just a one-time expenditure for the website upgrades?
    • We put a database together about three sessions ago and aggregated over 70 databases. The system has helped the efficiency and effectiveness of the agency, and we want to ensure that we keep the system maintained.

Pension Review Board

Katy Fallon-Brown, Legislative Budget Board

  • Presented recommendations for the Pension Review Board

Anumeha Kumar, Executive Director, Pension Review Board

  • The agency is requesting funding for three exceptional items:
    • Salary increases for nine staff members.
    • Accounting staff for implementing CAPPS.
    • Salary increases for Executive Directors.

Facilities Commission

John Montgomery, Legislative Budget Board

  • Presented recommendations for the Facilities Commission.
  • Presented recommendations for Lease Payments.

Illiana Barbosa, State Auditor’s Office

  • Provided an overview of the audit report on the Texas Facilities Commission.

Mike Novak, Executive Director, Facilities Commission.

  • The agency highlighted the following exceptional items:
    • $611 thousand to implement CAPPS.
    • $10.9 million to address staffing shortages in skilled trades.
    • $227.4 million to address the deferred maintenance backlog at 126 facilities.
  • Capriglione – Asked for insight on the results of the SAO report.
    • Novak emphasized the importance of external audits.
  • Capriglione – Asked for information on what has been done to fix the conflict of interest issue.
    • We have initiated the insurance review process within our capital side program. Many of the deficiencies reported were also covered through an umbrella policy requirement in our contracts.

Public Testimony

Eva DeLuna Castro, Center for Public Policy Priorities

  • Advocated for state funding for census counting. Emphasized that census counting is essential for accurate federal representation.

Wendy Johnson, Texas Conference of Urban Counties

  • Asked for state funding for new election equipment. Points out that election equipment is over a decade old and needs replacement.

General Juan Ayala, Texas Majors of Military Communities

  • Advocated for the direct funding of $50 million for the Defense Economic Adjustment Assistance Grant (DEAAG).

Tom Tagliabue, Texas Majors of Military Communities

  • Advocated for a stand-alone line item appropriation and an increase of $50 million dollars for the Defense Economic Adjustment Assistance Grant (DEAAG).

Hilary Shine, Texas Majors of Military Communities

  • Advocated for DEAAG funding for the City of Killeen. Points of that $20 million dollars does not meet Fort Hood’s military economic needs.

Snapper Carr, Texas Majors of Military Communities.

  • Represented the city of Corpus Christi for DEAG funding.
  • Buckley – Can you speak to some of the projects that are being considered in the Fort Hood area where DEAAG can be of assistance?
    • First, the army radar approach control facilities, which controls all of the air space in and around Fort Hood and serves as the back up all the way to Austin and Waco. Moving this project ahead gives Fort Hood the potential for air missions to come to Fort Hood.
    • We are also undertaking another air field project to adds security to the air field with technology.

Farrukh Shamsi, Texas Clinic Healthcare System

  • Discussed the Texas County Jail Substance Abuse Reentry program. Program would be approximately $2.5 million for the biennium.

Kathryn McNeil, Theatre District Houston

  • Harvey devastated the Theatre District in Houston. Advocated for disaster relief funding for the arts.

Ann Graham, Texans for the Arts

  • Requested support to restore the $5 million to the TCA cultural district program. Advocated for the $500 thousand for the military arts initiative.

Heidi Marquez Smith, Texas Cultural Trust

  • Emphasized the impact that art has on youth, education, the economy, and health. Advocated for the Texas cultural district public grant program and creative forces funding.

Guy Vanderpool, Amon Carter Museum of American Art

  • Requested support to restore the $5 million to the TCA cultural district funding.

Tucker Anderson, Code Three Emergency Partners

  • Suggests policy justification to incentivize ERS and beneficiary use of out of network freestanding emergency centers.

Bill Hamilton, Retired State Employees Association

  • Advocated for all of the exceptional items from the ERS. Two priorities are to get the ERS fund to an actuarily sound basis and to make sure there are no devaluations in the insurance benefits area.

David Sinclair, Game Warden Peace Officers Association

  • Supports ERS based budget and encourages committee to look closely at all ERS exceptional items.

Rebecca Stam, American Federation of State, County, and Municipal Employees (AFSCME)

  • Advocated to get the ERS funds on an actuarily sound basis and for the proposal to invest part of the rainy-day funds for long-term obligations such as pensions.

Maura Powers, AFSCME

  • Asked for the support to make actuarily sound contributions to ERS funds. Asked for the committee to consider a proposal from the comptroller’s office to keep the state’s debt from increasing around the pension fund.

Jo DePrang, Children’s Defense Fund

  • Asked for funding to support the Texas census count. Emphasize that the census is crucial for maximum federal funding.

Fatima Menendez, MALDEF

  • MALDEF urges committee to allocate funds for hard to reach census outreach.