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The House Appropriations Subcommittee on Articles I, IV, & V met on February 22. This report focuses on LBB and agency presentations for the following:

  • Office of the Governor and Trusteed Programs
  • Texas Facilities Commission and Revenue Bonds for Lease Payments
  • Department for Informational Resources
  • Texas State Library and Archives Commission
  • Texas Public Finance Authority & GO Bond Debt Service
  • Pension Review Board
  • Texas Secretary of State
  • Texas Veterans Commission

 

This report is intended to give you an overview and highlight the various topics taken up. It is not a verbatim transcript of the discussions 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.

 

Office of the Governor and Trusteed Programs

Harrison Greg, LBB Staff

  • Office of the Governor LBB presentation here
  • Total funding $29.6m
  • Includes statewide salary adjustments
  • Rider 5 modification $11.8m to $0
  • Trustees Programs LBB presentation here
  • Total funding for trusteed programs $2.1b
  • Item K increase $19.6m GRD due to HB 1256 mixed beverage tax receipts
  • Item L decrease in $18m in federal funds
  • Recommendations include a decrease in $1.8b in GR for disaster funding
  • $267.1m in all funds for economic development and tourism goal
  • $40m for Governor’s University Research Initiative
  • $1b in GR for border security; $1.8b decrease has been reallocated to TMD
  • $53m budget execution order; started disbursing these funds last month
  • Chair M. González – Why did it take so long?
    • Was a process
  • Dropoff in federal funds ARPA and Crime Victims Fund
  • Rider 36 deletion due to it being ARPA funds
  • Rider 37 deletion due to the study being completed
  • Exceptional items total $425m; most related to currently existing programs

 

Gardner Pate, COS Governor Abbott

Susan Johnson, Director of Admin Office of the Governor

  • Base budget included our GR and GRD requests
  • Provided for important programs including
  • Exceptional item 1 $150m in GR for disaster fund
  • Exceptional item 2 $120m for Victims Assistance funding
  • Exceptional item 3 $5m for grants to combat elder abuse
  • Exceptional item 4 $150m from GR for the Texas Enterprise fund
  • Rider amendments include Rider 6 reporting requirements of grant awardees to the at regularly scheduled intervals; to align with federal requirements
  • Rider 7 agency requests to strike the last sentence that enables the Trusteed Programs to seek alternative funding sources other than funds appropriated within the GAA for offices in locations other than Mexico City or Taiwan
  • Rider 27a requested access all Hotel Occupancy Tax funds
  • Johnson – Requested $12m in urban security initiatives for acts of terrorism
    • Federal fund source under Homeland Security grant program
  • Johnson – Request $125m for transportation needs? Does this include bussing illegal immigrants to other states
    • Sarah Hicks, Office of the Governor – Would be refilling Operation Lone Star funds; includes bussing, Carrizo cane eradication, etc.
  • Johnson – Do not want a slush fund with this vague description of transportation needs
  • Johnson – Anti-gang program saw a large decrease of funds?
    • Hicks – HB 9 adds funds to the
  • Chair M. González – Is this agency the best agency to put these elder abuse funds?
    • Hicks – This money is meant to help the courts/DAs have the resources to take these cases
  • Chair M. González – Want to be strategic about the money we appropriate; agency needs to consider if this is the most appropriate place these funds could go like the OCA
    • Hicks – Will consider this
  • Chair M. González – Have any plans to no longer keep the Covid-19 disaster declaration in place?
    • Gardner Pate, COS Governor Abbott – State remains as it gives the Governor’s EOs the force of law; hope is that the Governor’s emergency items pass this session
  • Chair M. González – Are we not using the Governor’s EOs to circumvent the legislature?
    • Pate – Do not think so; hope we will be getting out of the Covid-19 business in the future
  • Chair M. González – Texas Travel Industry Recovery Program was appropriated $100m and only $9m has been spent; why was this rollout so slow?
    • Hicks – Launched in July 2015; were slow in outreach; 9k have submitted and 4k have reached an end state; $38m in the process of payment
  • Chair M. González – How Texas is comparable to other states given Moving Image Grants?
    • Adriana Cruz, Office of the Governor – Do not compete well with other states that have larger and more robust programs
  • Chair M. González – Do not have any West Texas initiatives for the Enterprise Fund?
    • Cruz – Had several projects the past biennium
  • Chair M. González – How do you hold companies accountable who do not fulfill promises?
    • Cruz – Have a robust compliance as we enter into a contractual relationship; is a performance-based grant
  • Chair M. González – Have been instances where we did not award funds?
    • Cruz – Yes; can see who we did not award to on our website
  • Chair M. González – Do Disaster Funds help support families with no FEMA help?
    • Hicks – Meant to help city/county response to stand back up; do not have funds to help individuals
  • Chair M. González – Have spent billions on Operation Lone Star; are public questions as to if the program is being effective; will ever get a ramp down?
    • Hicks – Is making a difference; DPS announced over 365m doses of fentanyl and 19 tons of methamphetamine have been confiscated
    • 25k arrests at ports of entry; military presence does channel traffic differently; barrier aims to funnel people
  • Chair M. González – TMD said still need $450m; Governor’s Office will pay this?
    • Hicks – Yes; can use wall funds as an interim payment
  • Chair M. González – Agency said OSL would be an immigrant deterrent; that is not what happened; seems like the goals keep shifting; need increased accountability
    • Hicks – Goal always been to address transnational crime
  • Chair M. González – Saw a loss when the Governor issued inspection stations EO; intend to do another initiative such as that?
    • Hicks – Do not know of a plan, but is no plan to take away tools to protect Texans
  • Chair M. González – That created chaos among communities and had a negative impact
  • Spiller – Governor’s position we have the Covid-19 EO because we do not have similar laws?
    • Pate – Yes
  • Spiller – If that legislation passes, there would be no need for the EO?
    • Pate – Yes
  • Spiller – If not in place now would be subjected to entities implementing policies in opposition?
    • Pate – Correct
  • Spiller – Asks about processing centers; money for an additional one?
    • Hicks – Would maintain the two currently operating
  • Johnson – Been an effort to give funds back to agencies that were taken away due to OSL?
    • Hicks – Agencies used CRF funds for personnel; GR was moved to fund OSL
  • Johnson – What cities/counties have Covid-19 mandates in place?
    • Pate – Do not know any
  • Johnson – None do; how are we still in emergency if there are no mandates?
    • Pate – Governor’s EO has the weight of law
  • Johnson – If the body does not do exactly what he tells us to do, he will keep it in place?
    • Pate –
  • Johnson – What percentage of drug smugglers are illegal immigrants?
    • Hicks – Do not have that info; OSL can fill the gaps in border security; do not think every illegal immigrant is drug smuggling
  • Johnson – 78% of drug smugglers are U.S. citizens; should focus on that instead?
    • Hicks – Correlation is between fentanyl and the cartel
  • Johnson – How well is it worth it to spend billions on this?
    • Hicks – Yes
    • Pate – Fault is at the federal level for not enforcing border laws
  • Johnson – Do not want divisive talk; do not want to continue to take money from other agencies so we can send it someplace else
  • Johnson – Want to make sure we are using the taxpayer dollars efficiently
  • Chair M. González – Asking for investments in drug treatments?
    • Hicks – HHSC and Opioid Abatement Council have funds to do that
  • DeAyala – What are we doing as a state to help with property damage?
    • Hicks – Is not a state effort on that; have been discussion that would require legislative actions

 

Texas Facilities Commission and Revenue Bonds for Lease Payments

George Purcell, LBB Staff

  • Texas Facilities Commission LBB presentation here
  • Agency exceptional item $38.1m and 4 FTEs to maintain border wall
  • Revenue Bonds for Lease Payments LBB presentation here

 

Mike Novak, Executive Director TFC

  • Have been given expanded responsibilities like the new behavioral center and border facilities
  • Agency conduced an evaluation of all state agencies’ exceptional items; would be over 3k new state employees; would need to find a place for all these FTEs to go
  • Chair M. González – Number of projects managing now compared to the past?
    • Cutting base budget does not reconcile as we have a vast and continuously growing workload

 

Diane Jackson, CFO TFC

  • 5 exceptional items
  • Exceptional item 1 $30.2m to restore base funding; reduction would dramatically be able to affect the agency’s ability to function

 

John Rath, Deputy Executive Director TFC

  • Plan to close soon on a 29-acre tract for the flex-space office building
  • Capitol complex renovations are on track and on budget
  • Exceptional item 2 $258.9m requested to cover cost escalation in materials/services
  • Exceptional item 3 $536.3m to retire/sell/build state buildings
  • Overviews riders included in the base budget including 12 and 13 for state and federal surplus property program

 

Texas Public Finance Authority & GO Bond Debt Service

Harrison Greg, LBB Staff

  • LBB presentation here
  • Total funding $719.1m; 7.2% increase
  • Increase in GR primarily due to new issuances of commercial paper for CPRIT debt and the depletion of GRD Tobacco Settlement funds to pay down debt service
  • Recommendations reflect an overall increase of $48.4 million in debt service requirements
  • As of August 2022 TPFA had $2.6b term in outstanding general obligation bond debt
  • TPFA created the Natural Gas Securitization Finance Corporation pursuant to HB 1529 87(R); total authorization for bonds is $3.4b
    • Largest single bond issuance authorization in state’s history
  • Deleted rider related to the Tobacco Settlement Funds as there are none remaining for bond debt service

 

Lee Deviney, Executive Director TPFA

Philip Holt, Chair Finance Commission

  • DeAyala – Concerning securitization; why can’t the state indemnify this board?
  • Spiller – Have the same question as DeAyala
    • Council told us the state cannot go after since it is a federal issue
  • DeAyala – Request you get us in contact with council so we can see where that is in law

 

Department for Informational Resources

Charley Smith, LBB Staff

  • LBB presentation here
  • Total funding $1.28b; increase of 39 FTEs
  • Increase $46.5m for vendor payments
  • $7m increase in operating costs for cybersecurity services
  • $200m decrease in federal ARPA funds
  • Increase of $56.7m across other funds
  • $154.4m for operating expenses related to managing the cost recovery programs, statewide rule and policy functions, statewide cybersecurity services, and indirect administration
  • $830.2m for Shared Technology Services
  • Deletion of article 9 riders concerning requirements for the STS Program

 

Amanda Crawford, Executive Director DIR

  • Appreciate so many of our requests included in the base budget
  • Thanks for the funding to expand the RSOC program including a UT
  • Out of state utilization has exponentially grown
  • STS program has 521 participants
  • Are three exceptional item requests
  • Allison – EI modernization would enhance dollar savings?
    • Yes and would be in a better negotiation position
  • Spiller – Document or monitor or report instances of cyberattacks?
    • Block and defend millions of attempts every day
  • Spiller – What do you do with those documented instances?
    • Share with federal and state partners including the Information Sharing and Analysis Organization
  • DeAyala – Most are going to cloud storage? Security issues?
    • Yes; agencies were given a directive from the legislature
    • No, program is to help agencies
  • Chair M. González – Why EI RSOC requests at those areas?
    • Noted they were interested; aim to have this at universities throughout the state

 

Texas State Library and Archives Commission

Samantha Martinez, LBB Staff

  • LBB presentation here
  • Total funding at $69m; maintain the FTE cap
  • Decrease in funds due to one-time spent ARPA funds
  • Includes statewide salary adjustments
  • Agency has 5 exceptional items

 

Gloria Meraz, Director TSLAC

  • Grateful for the across-the-board salary increases
  • Exceptional item 1 $2.36m for key staff areas like business operations
  • Exceptional item 2 request salaries for IT professionals
  • Exceptional item 3 $990k for additional positions
  • Exceptional item 4 to provide IT support to smaller libraries; working with the Broadband Office on initiatives
  • Exceptional item 5 to construct a new facility for storage of state archival records, materials, and artifacts; would replace the existing Shoal Creek building
  • Spiller – EI 4 would like to see a list of the rural libraries that would apply
  • DeAyala – EI 5 would net out?
    • Do not know, cost of the building would go into the project

 

Pension Review Board

John Posey, LBB Staff

  • LBB presentation here
  • Total funding $2.4m
  • One-time funding of $600k in GR from HB 2 87(R) for two IT projects
  • Two exceptional items

 

Amy Cardona, Executive Director PRB

Keith Brainard, Vice Chair PRB

  • Overviews responsibility of the board and implementation of 87(R) legislation
  • Staff retention and recruitment has been an issue
  • Exceptional item 1 merit salary and cost of living increases
  • Exceptional item 2 increase in authority and GR funding for the Executive Director

 

Texas Secretary of State

George Pursell, LBB Staff

  • LBB presentation here
  • Total funds $76.5m
  • Expiration of Federal Help America Vote Act grant
  • Reduction of GR in one-time funding for phase I of the BEST Legacy Modernization project
  • Contracts with credit card processors may contain provisions that allow the merchant to retain a small proportion of fees for the purpose of security upgrades to processing systems
  • Agency required to contract for credit card processing services; has been collecting these security upgrade fees
  • Agency has 11 exceptional items
  • Spiller – Credit cards fees for SOS directly?
    • Small portion of fee is retained for point of sale

 

Joe Esparza, Deputy Executive Director SOS

  • 11 exceptional items
  • Johnson – Why did you conduct forensic audits on certain counties?
    • Looked at four largest counties Harris, Collin, Dallas, and Tarrant
    • A new SB 1 audit is underway
  • Johnson – What are they looking for?
    • Chain of custody or security issues
  • Johnson – When will that audit be completed?
    • Can get that back to you
  • Johnson – Looking for an outcome before you come back and ask for more money on that
  • DeAyala – What election was audited?
    • 2020 Senate election
  • DeAyala – Feel you have the resources to conduct those audits?
    • Staffing is not adequate to conduct the ongoing audits
  • DeAyala – Budget request account for what you need?
    • Believe so
  • Chair M. González – How many FTEs adding with EI request?
    • About 13; will take us up to 30 FTEs
  • Chair M. González – Considering expanding how many counties you are looking at?
    • No, is in the election law; will be randomly selected
  • Chair M. González – When did this drawing occur?
    • In October; gave public notice
  • Chair M. González – Who is involved in the new audit?
    • The four includes Harris
  • Johnson – Hard to believe that Harris County gotten picked again
    • Counites above a certain population threshold are subject to random drawing
  • Chair M. González – EI 4 how many FTEs?
    • Keith Ingram, Elections Division SOS – SB 1113 requires SOS oversight; need more staff
  • DeAyala – SOS responsible for elections?
    • Counties are responsible for elections
  • DeAyala – We all want safe/responsible elections; want you to have what you need

 

Public Testimony

Ann Bishop, Executive Director Texas Public Employee Association

  • Support all the salary increases in the base budget

 

Rahul Sreenivasan, Texas 2036

  • Requests committee’s support of DIR requests concerning their legacy system

 

Erin Gornero, Community Services

  • Request support of the Office of the Governor’s EI 2

 

Christina Green, Children’s Advocacy Centers, Texas Council on Family Violence, among others

  • Request Governor’s Office EI 2 for $120m in bridge funding to maintain crime victims services
  • Chair M. González – EI 2 is to maintain, but we need to maintain or increase resources? Need to think about ways we can approach this from multiple areas in the budget
    • Need increased resources as it spans across other articles in the budget

 

Chara McMichael, BCFS Health and Human Services

  • Division serves as largest provider for child sex trafficking victims
  • Funded outa of VOCA dollars, with out it forced to do 45% cut in staff
  • With no consistency in funding its hard to do job
  • In favor of bridge funding and if possible, would like an increase

 

Tom Krampitz, Texas Border Prosecution Unit

  • Thankful for that in 2009 legislature created Texas Border Prosecution Unit
  • Funding comes through trustee programs, line item 18
  • Awarded $15M last year and got supplemented funding for OLS
  • $100M fund is used to support activities like ours

 

Erika Boyd, Texas Travel Alliance

  • In support of funding for the Office of Economic Development and Tourism

 

Richard Victorin, Self

  • SB 1515 from 2009 was supposed to finance Austin Circuit of the America
  • Since 2011 Circuit of the America has received $200M
  • The money spent in Texas has been funding
  • The trust fund operates outside the legislature
  • Ask that operation of major events fund be revisited and investigated