Senate Finance met on February 9 to discuss Article I, general government, in SB 1. Included in this article is the Comptroller of Public Accounts, Pension Review Board, Employees Retirement System, and the Texas Emergency Services Retirement System, among others. The first section of this hearing can be found here, the second section here, and the third section here.
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.
Update on Federal Funds
Jerry McGinty, LBB
- An overview of federal funding document has been laid out for the committee (link); 5 pieces of federal legislation that has been passed that provides funding to the state
- Have gotten monies from CARES Act funding sources
- Coronavirus Relief Fund appropriated $8 billion to the state
- FEMA reimbursement funds $2.3 billion; will change as Biden recently signed a directive that changed reimbursement rates from 75% to 100%
- ESSER Funds appropriated $1.3 billion received by the state; discussed yesterday
- CARES Act provided grants to the Department of Agriculture; provided Childcare Developmental Block Grants
- Have been appropriated approximately $14.6 billion; some of which has not been received by the state and is still being worked through federal guidance and through agencies
- Coronavirus Supplemental Act, most recent bill appropriated $7.6 billion to the state; largest component $5.5 billion for ESSER and TEA
- Funds have not been received by the state and we are still working through the federal guidance for these funds
- Taylor – Out of the nationwide allocation, Texas only received 66,000 for the Texas Tech Health Sciences Center?
- Yes
- Taylor – Have more health science centers than Tech, so why didn’t the state get more funding?
- Whitmire – TxDOT grant for airports; how did they get that and how is that related to COVID?
- Through the program itself, $9.1 billion was targeted in the CARES for aid for airports
- Whitmire – What did they do with those funds?
- Will look into it
- West – Were these dollars trusted to the Governor’s office and then sent to the agencies?
- Rodriguez, LBB – Some funds directed to state administrators of the programs
- West – Which funds were directed to the Governor’s office and then disbursed from there?
- Rodriguez, LBB – Can get that information to you
- West – How much money did Texas receive for TEA’s k-12 Education Model?
- $19.9 billion
- West – Were those funds allocated through the program, or was a block grant to the agency?
- Rodriguez, LBB – Not sure, will get back to you
- Rodriguez, LBB – Fastest way some funds were allocated was through rules changes or block grants; some allocated to state administrator for further appropriation
- West – Area health education centers got $382,000; which directed to agency or trusted to the Governor’s office?
- Rodriguez, LBB – Can get to you, difficult because it is initially appropriated for a purpose and then we have to figure out where it is going until we are given federal guidance
- West – Higher Education General fund; $786 million went directly to those institutions?
- Rodriguez, LBB – Was allocated to state funded institutions, and do not know which ones
- West – Coordinating Board dispersed it? Would like to know how that money flowed and what it was used for
- Rodriguez, LBB – Can get that for you
- Huffman – TEA received $5.5 billion in the most recent stimulus bill; was that disbursed by TEA through existing programs or did it go directly to schools?
- Rodriguez, LBB – No action has been taken on funding; it is still with the feds, and the state have not accepted it yet
- Huffman – Are we for sure getting this money?
- Rodriguez, LBB – $5.5 is allocated to us, but has not accepted by the state
- Huffman – Why would the state not accept the funds?
- Nelson – Some funding has strings attached
- Huffman – Does the presidential directive for the reimbursement work like an EO?
- Rodriguez, LBB – $1.9 billion went to unemployment and direct payouts
- Huffman – Should suggest to Washington that we use this as an example of how to disperse funds more efficiently by getting them directly to those who need it
- Kolkhorst – Most recent stimulus bill, GEAR Funding; $134.3 million and $153 million for schools has that flowed through the state?
- Rodriguez, LBB – None has been received
- Kolkhorst – From the CARES Act, have received most of these funds?
- I believe most of these monies have been received
- Kolkhorst – $143 million went to TxDOT?
- Yes, and in addition to what localities received
- Kolkhorst – Should keep these dollars in mind because this is much more than we received last session and could affect budget conversations
- Nelson – How many different funding sources?
- At least 40
- Nelson – For all of these funds, deadlines keep changing, are a lot of strings attached, and it is a lot of money; will be wise for us to ask every agency about funds received
- Nelson – Need to use these funds to protect those in Health and Human Services and education
- Taylor – Need to be made aware of what local entities, universities, and agencies received; do not need to double fund those who have already been allocated monies
- Nelson – Is not right some funds are going straight to those who need it and others are getting tied up elsewhere
Comptroller of Public Accounts
Mirna Bowman, LBB
- Total All Funds recommendations for the agency total $622.2 million
- Significant funding changes; reflect a decrease $6.1 million from Other Funds due to decreases in appropriated receipts
- Issue 1 relates to CAPS; recommended funding is $46.9 million annually for ongoing support
- Issue 2 identifies historically underutilized businesses; statewide report available
- Overviews a table of HUB goals
- Article 9 rider relating to CAPS deployment has been updated to reflect current agencies
- Lucio – Are there any specific strategies in your budget that were subject to a 5% cut that would benefit with a refund?
- Question for Comptroller
- West – Why are the numbers grouped instead of showing demographics? Why? Can you provide the list of those who did not set a goal?
- This is historically how the numbers are presented, broken down by procurement, not ethnicity
- Jerry McGinty – Data is available and can provide it
- Will be presenting the summary of budget recommendations for comptroller fiscal programs
- Recommendation for All Funds total $1.5 billion; includes $305.6 million increase in All Funds
- Significant funding changes include Item I; estimated increase of $7.2 million in loan repayments for the federally funded portion of the state energy program
- Significant funding changes include Item J; estimated decrease of $11.2 million in loan repayments for loans funded through the GRD Oil Overcharge Account
- Recommendation funding increases for certain statutory line items
- Recommendations include $271.2 million in GR for the estimated payment of contractual obligations for the Texas Guaranteed Tuition Plan; aligns amount in the BRE
- Kolkhorst – What is the long-term liability for the TGTP?
- Goes down/descends
- Recommendations include $34 million from the State Highway Fund to distribute to counties for gross weight and axel permit fees; usually provides a GR estimated savings of $34 million
- Rider 16 currently provides unexpended balances authority within the biennium and revision would provide it across the biennia
- Rider 22 relates to the TGTP funding and Rider 23 relates to the SHFs for counties
- Total exceptional items amount is $2.6 million for the biennium
Glenn Hager, Texas Comptroller
- Highlights the Office’s work throughout the pandemic; have processed more than $6.2 million tax returns and collected $1.3 billion in delinquent taxes
- Office is focused on replacement of old and outdated systems; for example, the new sales tax web portal that replaced a 20 year old system
- Working on a geographic tax system for businesses which is important after passage of the Wayfair Case
- Asks to restore the $32.3 million to maintain and modernize systems and to maintain current staff levels; as a result of the 5% cut, have put a hiring freeze in place
- Need to address long term liabilities which could affect the state’s rating; like we did for TRS
- Nelson – Is telework sustainable for your staff long term? Has it added any efficiencies?
- For some departments, efficiencies went up
- Would like to get back into the building, though still most are still teleworking today; looking for hybrid environment for future
- Perry – In tax policy, who sets what is taxable? Are merchant fees a taxable event? It would add up to an $800-million-dollar tax; need to know there is a system in place when you are shaking them down
- State statute asks the Comptroller’s office to fill in the gray; we have set up several advisory boards for feedback/input
- Do not need audits making tax policies; that is why I come to you and ask you to make new tax bills/laws to modernize
- Perry – Warns about trajectory of Texas if policies like this are enacted; could become like California
- Bettencourt – Any ancillary operation that requires checks makes it more difficult to taxpayers; We have built up terrible backlogs, so how do we handle this?
- Arbitration, we are trying to trim the backlog
- Huffman – I filed your bill in October is currently sitting in ledge council; allows taxpayers to pay only the undisputed portion of a tax liability, can you explain?
- Let them pay the part they agree to owe us and negotiate further the parts we disagree on in court ruling; would help smaller businesses and be more efficient
- Huffman – Comments briefly on why it is important to fix ERS
- ERS has not been dealt with for a while, and the pandemic has heightened that unfunded liability; we do not want to be the path to New Jersey or Chicago
- Nelson – Do you think this would be a good use, short and long term, of federal funds?
- Any amount of money, money that Texans have paid, should make its way back to Texas
- West – Have lost about 60,000 jobs; can you speak to how that affects us?
- We had seen a softening even before pandemic where oil prices showed significant contraction
- We never ramped back up after 2015-16 job loss; the industry is here to stay, but it is not going to be a huge source of employment moving forward
- 400,000 are on continued unemployment in the state
- Schwertner – Some of our pensions have not met their anticipated level of return and we are in a zero-interest atmosphere; where does this all lead?
- ERS return rates have been terrible even before the pandemic; we can add more money, and we probably will this session, but that does not resolve the issue
John Posey, LBB
- Recommendations for All Funds total $5.7 billion; an increase of 2.3% from 2021
- Recommendations increased All Funds for the ERS by $7.6 million over the biennium
- Recommendations assume 0.5% payroll grown in FY 2021-23 and assume current contribution structure
- Recommendations increase All Funds for the group benefits program by $120.3 million over the biennium; assumes the state will contribute the full cost of individual and half of family
- Contribution rates FY 2022; recommendations keep contribution rates the way they are now
- ERS is expected to be depleted by 2061; agency suggests an increase in contribution rates
- Exceptional item $949 million over the biennium
- Constitutional maximum contribution by the state cannot exceed 10%, and the agency’s exceptional item exceeds that rate
- Contingency Reserve Fund for the group benefits program totaled $2.7 billion at the end of FY 2020, projected to be $3 billion at the end of FY 2023, and expected to be depleted in 2027
- Informational rider has been updated to reflect current estimates
- Exceptional items total $1.1 billion over the biennium
Porter Wilson, ERS
- All plans we manage are on track to run out; reiterates ERS is slated to run out of money in 2061
- State and employees are putting in 19.5%, but actuarily sound contributions that would help pay for some of the unfunded liabilities before the fund runs out would be 6.63% more
- $950 million All Funds and $680 million in GR
- Previous legislation has reduced benefits for the system, which has driven down cost; over 60% of the workforce is in the reduced programs
- Could phase into this like you did for TRS last session, and we do not have any additional requests for health care
- Nelson – Is this information available to public?
- Yes, can be
- Nelson – For the second session in a row, we are not increasing health care premiums
- Correct, will need to do eventually as the cost of health care continues to go up
- Not increasing premiums this session, finding favorable rates.
- Perry – State employees pays 9.5% tax to ERS, 7.65% to social security and 1% payroll to 401K; what is the median income of our state employee?
- $36,000-$37,000
- Perry – An employee probably does not have room to go up for additional contribution; what is your opinion about doing something different? Does not think that is an option
- The legislature sets the benefits for state employees and 75% state employees said their pension benefit was a significant reason for work; could offer a different benefit plan
- You are talking about a policy change, but the $15 billion in unfunded liability would still need to go to the public as we have promised
- Bettencourt – What was the rate of return in 2019 and what do you think it is for 2020?
- 82% based on an assumed rate of 8%; assuming it will be 7.3% in five years and 8.2% in ten years
- 7% long term assumption for rate of return; through January we are at 8%
- Bettencourt – In 2019, we dipped down to 3% return, I implore you to put that in your presentation; it is what you are measured by and responsible for
- A year ago, we had a whole hearing on this topic and we are here today to talk about appropriations
- Predictions are more long term as opposed to single shot, single year
- Schwertner – We should have more data so we can fill pension appropriately; total current contributions are 19.5% and the constitution says can’t go past 20%
- There are multiple provisions in constitutions about pensions; financing of benefits must be based on sound actuarial principles
- Governor has broad discretion to determine when there is an emergency, which provides flexibilities
- Huffman – Number of state employees? We have been stagnant for decades though the population has grown
- We have the same number of active state employees today as we did in 1993
- The pension program helps recruit state employees
- Huffman – Explain the ERS board
- To determine risk appetite and make decisions on how to allocate assets; set return assumption and asset allocation
- 3 are appointed from each branch of government and 3 elected from active employees
- Election coming up this spring for an active employee representative
- Huffman – Say the assumption rate is 5%, what would that do?
- The $950 million dollars would be significantly more
- Huffman – How does the assumption rate compare to other public pension plans? The average return rate is 7.22%; are we on average nationwide? Employee contribution rate? Employer Contribution rate?
- We are below the average at 7%; high for contributing districts; 14.7% for those that participate in social security, as opposed to 9% from the Texas Government
- Is a constitutional issue and are working on an amendment to come up with language as a safeguard about “determining” vs “declaring” emergency
- Perry – What was the retiring state employees’ benefit from the pension as a percentage of what they are making? It is not a rich retirement
- About 46% of their pay; every year they work for 2.3% of their pension
- Lucio – There were 3 members of board that are ERS, is there any retired representation?
- Retirees may be appointed, but not elected and do not currently have representation on board
- West – In terms of federal funding, will there be any coming into our pension fund?
- Is a state benefit and funded with state dollars; a one-time lump sum will not fix this, but can be part of the plan
- Nelson – The ERS is a priority of this legislature and committee
Social Security Contributions and Benefit Replacement Pay
John Posey, LBB
- Recommendations for All Funds total $1.9 billion, an increase of $41.5 million from FY ’20 and ’21.
- Increase Social Security by $46.1 million or 2.5% over the biennium
- The assumptions include .5% payroll growth for FY ’21, ’22, and ’23.
- Employer contribution rates are established by federal law
- Benefit replacement pay, only applies to employees hired before September 1, 1995
- Recommendations decrease All Funds for this benefit by $4.6 million, and because of increased turnover, recommendation assumes annual reduction of 17.2%
Texas Emergency Services Retirement System
John Posey, LBB
- Recommendations for All Funds total $3.9 million in FY ’22 and ‘23
- Funding for this agency comes from GR and a GRDaccount from the Voluntary Fire Department Assistance Fund
- Agency reduce their 2021 base an addition $20k beyond the 5% reduction target due to a vacant position left open for six months
- Increase state contribution to the pension system by $110,448; employees’ monthly pension payment would increase without contribution
- Restore $20k for vacant position
- Performance measure issue an auditor identified in 2019, which resulted in slight inaccuracies in performance measures
- West – Audit been addressed by agency?
- Yes
Cancer Prevention and Research Institute of Texas, CPRIT
John Posey, LBB
- Recommend $594 million in general obligation proceeds
- Recommended FTE cap increase of 8 for a total of 44 FTEs
- Decrease in unexpended balances carried forward from FY 2019, approximately $700k
- Item 1: Overview of CPRITs bond proceeds, including $3 billion for cancer research
- Updated issuance to 2035
- Limit of $300 million issued to CPRIT per fiscal year
- Item 2: CPRIT Return on investment; allows state to collect royalties on grant funded projects, primarily program development grants
- Item 3: Response to COVID; delay in grant cycle
- Request to increase the amount transferred from grant strategies to help support grant operations; includes interagency contract with TX Safekeeping Trust Co. to manage grant assets
- Provide 8 additional FTEs
- Modification of Rider 3, which notifies the LBB and Office of the Governor of transfers out of their grant related strategies
- Nichols – Regarding item 2, TX has collected $4.6 million?
- Yes, since 2011
- Nichols – Coming from GRD or GR? Seems to fluctuate
- Statutory changes in the methods of finance, funds consolidation
- Lucio – What total amount of money will TX commit in the coming biennium to cancer?
- All money with cancer research is in this agency and listed in this budget
- Bettencourt – Rider 3; what type of transfer authority requests are they getting? Magnitude of requests?
- Asking to notify the LBB and Governor when those transfers exist
- Transferring money from grant strategies to administering those grants
- Indirect administration is roughly $4.5 million a year; strategy 613, grant reward and review operations, roughly $1 million per year
Wayne Roberts, CPRIT
- Asking for 10% increase in salary to Chief Scientific Officer in nationwide search
- Salary was set in 2013 and has increased 48%. Increasing at least 10% to attract the appropriate replacement. Salary will be under comparable jobs but in appropriate range for a state position
Heidi McConnell, CPRIT
- Requesting additional $450k annual adjustment to base budget to pay agency’s share of the State Wide Cost Allocation Plan (SWiCAP)
- CPRITs share for FY 2020 is roughly $448k, a 552% increase of the cost calculation from FY 2019 of $68k
- CPRIT is unable to absorb cost increase in budget
- Budget adjustment does not require more funding, only appropriations authority within the agency’s base budget of $300 million
- SWYCAP based on allocation data from 2 years prior
Wayne Roberts, CPRIT
- Nelson – CPRIT and pandemic
- UT provided research that advanced vaccination; though that was not a CPRIT grant, a microscope belongs to a core facility that CPRIT funded
- CPRIT product development company Pulmotect in Houston has developed a drug meant for respiratory cancer that is being used with COVID patients, being manufactured at a CPRIT funded facility in College Station
- Nelson – The board has been optimistic that CPRIT will return investments for state. Tell us about the latest success in this area.
- There have been some statutory changes to where the revenue from grantees goes
- In 2013, a sinking fund was created in state treasury for royalties that can only be used for debt service
- Seeing an uptick in revenues though they occur irregularly
- Milestone payment from Peloton Therapeutics in Dallas, $580k. CPRIT funded Peloton grant in 2010 for basic research
- Funded MD Anderson project and received $100k revenue
- In academic research, assuming these institutions of higher education will cut the best deal for themselves, we take 10% off whatever they make
- Entitled to revenue up to four times return the amount of the original grant, and retain .5% royalties up to patent exclusivity, when it goes generic
- Nelson – What amount goes to prevention?
- 10%, capped by law
- 70% academic research
- 20% product development research
- Bettencourt – What will this look like in 5-10 years?
- Rather not speculate, drugs take 12-15 years to get through regulatory process, so funds are unpredictable. We fund beginning stages, it is hard to project
- Confident in the drugs CPRIT has invested in, but “I will not write you a check I cannot cash”
- Nichols – State often gets out-negotiated by university/businesses. State ought to get bigger cut as we started funding project. Proportionality to be reconsidered
- CPRIT is not the lone funder in a project, usually three or four other entities.
- Statute make sure state gets “fair return”, but don’t get in the way of science. Our priority is developing the treatment.
- Nichols – reevaluate 10% agreement with university.
- The $300 million given to CPRIT is not the only money going to cancer in TX.
- Campbell – You are asking for a 10% increase in salary for the new CSO, looking at the deans of medical schools for comparable salaries. The average dean salary is $500k, and CPRIT is already paying $553k
Commission on State Emergency Communication
George Purcell, LBB
- Recommendations would reduce the appropriations for the commission by $23.2 million in All Funds and $20.2 million in GRD; due to withdrawal of North Central Texas Council of Government from the CSEC 911 program
- Item A: Departure of North Central Texas Council of Government reduced available revenues to 911 program by $14.7 million
- Item B: Developed reductions in future investments
- Discussion of funding structure of CSEC 911 services
- Revenue is down $12.6 million a year since 2014, dropping at an average of 6% a year
- Fund 50/50 will be close to completion by the end of the next biennium
- Rider 9: development of revenue source by July 2022
- Requesting new Information Security position
- Nelson – When will we have a running total of requests for moving across 15th street?
- $4.4 million across all moving agencies; will have more detail tomorrow
- Bettencourt – What was the original plan for move in and has COVID hindered timing?
- Some additional costs but not exceptionally; not sure operationally how it’s being handled
Kelli Merriweather, Commission on State Emergency Communications
- Very small agency with 25 FTEs; handles 911 and Poison Control
- Consistently meet or ahead of measures; asking for FTE and moving funds
- Nelson – Do you have any ideas for future, sustainable revenue streams?
- We will look at our current costs and measure efficiency. We can decommission temporary emergency programs in the future
- Our fee structure was developed in the 1980’s – 50 cent surcharge and it hasn’t been raised. That model is outdated and could increase revenue
- West – Given the declining revenue, should this be merged with another agency or is the purpose so unique that it needs to be stand alone
- Sunset Review Board question
- Up for Sunset next session
John Posey, LBB
- Recommendation for All Funds total $2.1 million, same as agency’s 2021 base, all funding comes from GR
- Item 1: Legislation passed last session, which requires the majority of Texas Public Pension Systems to report information on their investment practices to the Pension Review Board
- Board publishes report summarizing this information to the legislature and Governor
- Published in Nov.
- Item 2: Exceptional item request; fill one FTE left vacant as part of the 5% reduction, $112,875
Stephanie Leibe, Texas PRB
- 91% of budget is allocated for staff salaries; a 5% reduction would hinder growth.
- Sb 322 and 22-24 – required new reports and information. The agency created 200 recommendations and best practices; conducted thorough review of all statutory req. engaged with stake holders to help improve responsible funding
- Continued to enhance online data center
- Huffman – SB 322 and 22.24, supporting the adoption of another FTE to be specialized for this work
- Nelson – All agencies had 5% reduction, need to reanalyze
- West – Are we having problems with the funding soundness restoration plans?
- Working to lower amortization period below 40 years, though that’s our current benchmark, to ensure that there are sufficient funds to pay the promised pension benefits
- Bettencourt – What other best practices do you have after 2 intensive reviews
- Retirements and sponsors to work together for more proactive plan for policymaking
- Evaluate investment program on a more comprehensive level; focus on investment manager performances, investment fees, etc.
- Bettencourt – Who got those recommendations?
- Invited retirement system and sponsor to either board or committee meetings to have discussion in public forum; broadcasted to be available to stakeholders
- Bettencourt – Did you send those best practices to our board?
- Yes, Investment Performance Report was included in biennial report to legislature
- Bettencourt – It doesn’t seem like you made more progress on SB 322
- We are a small state agency, the challenge is trying to implement all of our mandate at the same time.
Samantha Martinez, LBB
- $19 million in All Funds, an $8 million decrease from current biennium
- Item A: Decrease of 3.8 million in one time funding for projects
- Item B: Decrease of 4 million in GR for cultural district grants
- Rider highlights, including modifications of existing and deleted riders
- Lucio – To what extent have your grant funding projects found federal aid during the pandemic.
- Received CARE package, $668k, distributed last June
- Shuttered Venue Operator Grant, $15 billion federal money sent to SBA; live music venues, primarily, will apply for this SBA funding
Gary Gibbs, Executive Director of Commission on the Arts
- Arts programs in Texas raised $6.1 billion in taxable sales in 2019 and $380 million in state sales tax revenue,
- Increase of 30% in last ten years, coincides with implementation of Cultural District Project Program
- Less than 9% of budget dedicated to administrative cost, rest of funding goes to art organizations, libraries, grants, community centers, etc., throughout the state
- Grants reach 170 cities, every senate district, and 131/150 house districts
- Asking to have Cultural District dollars, $4 million, restored to budget
- Currently have 48 cultural districts, 8 more applicants
- Restore 5% cut
- Lucio – What establishes a cultural district?
- Community, hotels, restaurants, artists, create and send application, state sets requirements
- Not all states have a cultural district program but we stand midway through the lineup.
- Bettencourt – How did you distribute the $668k., who got the money and what is the effect?
- Anyone with a current commission grant, about 480 organizations, amended their current grant and divided the money equally
- $1400 per organization
- Bettencourt – Was the money originally allocated to save jobs or was it open ended?
- Completely open ended
- Nelson – Arts will find support in this committee and legislation. Any federal funding or assistance coming?
- The National Endowments for the Arts did not get another appropriation in the second CARES Act and nothing in the Biden legislation
Library and Archives Commission
John Posey, LBB
- Recommendations include $71 million in All Funds, a $3.71 million decrease from current biennium
- Maintain current FTE cap at 170.5
- Item 1: Decrease in one-time funding items received in 2021, total $3.3 million for two grant programs and state storage needs
- Item 2: Increase in funds related to unexpended balances carried forward to the next biennium
- Item 3: Overview of $2.6 million in federal COVID funds
- Exceptional items total $30.6 million
Mark Smith, Texas State Library and Archives Commission
- Providing tools and training to libraries, helping with public records, public access to archives, and reading
- Running out of storage space for state agency records; board last year offered short term, satellite record storage facility in southeast Austin, capacity will be exhausted in 5-7 years
- 90% of all agency records are in digital format; the remaining paper records are held at State Record Center or a single private record vendor
- Asking for $1.4 million with architectural plans to expand State Records Center
- A study to provide alternative record storage options proved an expansion of the Center would by far be most cost effective
- $3.75 million to support local libraries
- Asking for two additional archivists
- Requesting State Information Governance Coordinator position to help digital transition
- Nelson – Is all the information that is digitally archived being stored in TX? We need to examine this more carefully, where we store that information.
- TX digital archive uses cloud storage through a DIR approved vendor, cannot tell you where the physical location of that is
- Nelson – Just one vendor that is applying for that contract?
- There is only one private sector vendor that stores paper records on state contract
- Nelson – Are there multiple contract requests for the digital storage?
- Only one bid, vendor is approved by DIR. Very limited market
- Nelson – Expresses privacy concern over location of servers, whether or not they function in Texas or in the US at all. Cannot imagine there aren’t more companies willing to bid for this position; perhaps contract is written too narrowly
- Hancock – Many cloud services have three cloud grids in the US for redundancy. Texas has its own but if you kept it in Texas only, you would have limitations of access to that data
- Bettencourt – Only one vendor for cloud storage, is the volume the problem? Why is the contract so narrow to only include one company?
- The files in the archives are permanent historical nature of the state, not current agency materials; we want to manage the digital preservation of those materials in a way that is accessible
- That mentioned vendor has the software to digitalize those records and has a recommended storage solution that has been approved by DIR
- Not bidding storage, bidding software
- Bettencourt – What prioritization process do you have for the storage of paper material?
- Set by record retention master schedule, which has been reviewed in the past year by Sunset
- Bettencourt – Can you check your contracts to see if they can sell our data? If the info is in a different state or country, it is subject to those state rules
John Posey, LBB
- Recommendations from the SB include $115.7 million in All Funds which is a $0.7 million increase from the previous biennium’
- Significant funding changes include a $2.6 million in Federal Funds related to veterans’ employment services
- Commission increased the FTE cap by 22 under flexibilities provided by Article 9; agency intends to hire more veterans’ employment representatives to expend Federal Funds from the DOL
- Request a B11 increase in to reflect actual levels
- Highlights Rider 5, shows an increasing estimate for lottery proceeds
- Rider 10 reflects a decrease in GR for the Healthcare Advocacy Program for veterans; reflects the 5% reductions
- Exceptional items total $2.4 million in All Funds; includes up to 13 additional FTEs for health care advocacy at VA outpatient clinics and capital authority for the e-grants system
- Kolkhorst – Did the Veterans Commission receive any CARES Act Funding or recent stimulus bill?
- Did not receive any CARES Funds, but did have COVID related expenses and they used other federal funds to cover
- Kolkhorst – Is strange they did not receive any CARES Act funds
Laura Koerner, Texas Veterans Commission
- LAR supports the mission of the commission and facilitates the provision of virtual or in-person services to the 1.5 million veterans in Texas
- Agency is using resources to provide all services virtually; LAR accounts the 5% budget reduction
- Further budget reductions will prohibit the commission from providing these services
- Revenue generated by the commission produces a significant ROI; claims department manages 234,000 caseload and produced $3.98 billion in compensation to veterans in FY 2020
- Legislative priority is to ask the legislature work with the commission to help veterans access their VA funded health care services
Thomas Palladino, Texas Veterans Commission
- Agency has 4 exceptional items: improving healthcare advocacy services, updating cybersecurity measures, enhancing electronic grant management system, and agency relocation costs
- Healthcare advocacy services was created in 2015; increased demand far exceeds program’s capabilities, only 12 veteran healthcare advocates in the state
- 12 advocates have provided 35,000 services to veterans; 5,842 services in 2020 alone
- Nelson – The budget increases the FTE cap to allow for more federal fund support; how do those positions help vets find and keep employment?
- Receive a DOL grant that funds 180 employment representatives across the state, last year received $2 million extra dollars; work with vets directly to enhance job skills and link them with employers
- Lucio – Commission has come a long way in a short period of time; always in favor of improving healthcare services
- Campbell – You are asking for 13 more advocates? Reasonable request for the amount of work the original 12 have done, sure this has all the Senator’s support
- 12 advocates in the hospitals and one as an administrative support
- Perry – Lubbock has a proposed additional FTE for healthcare advocacy, is that in anticipation of the new clinic that is being built there?
- Yes, that is where that is going to go; partnership with Texas Tech Health Science Center
- Perry – Employment advocacy, do have the same data for outcomes for employer and employee mix?
- Yes, can get that for you
Mirna Bowman, LBB
- Recommendations total in $15.5 million in All Funds; $15.3 million AF decrease from the current biennium
- Significant funding changes include item B, a decrease of $1.1 million in GR for debt service obligations for the Texas State History Museum (bonds retired in FY 2020)
- $14.4 million GR decrease resulted from 6 one-time funding items
- Texas History Education Program received $5 million in 2014-15 and most funds have been used; item is not included in the introduced bills
- Overviews related funds in, and outside of, the treasury; recommendation includes two new riders for capital projects in the current biennium
- Exceptional item requests total $40.9 million in GR for the biennium
- Perry – Are we subsidizing the deficit by virtue of funds? What is the story of the $2.8 million deficit in the museum fund?
- Understanding is that because museums had to close during COVID had an impact on revenue
- Lucio – Has the preference for remote work delayed the need for maintenance for historic sites like the Capitol?
- Would be a better question for the agency
Roderick Welsh, Executive Director of the State Preservation Board
- Agency was provided a GR base limit of $29.6 million; LAR submitted was $10 million below this limit
- 3 exceptional items for capital projects in the LAR totaled $37.4 million, after adjustments, asking to restore some of the portion reduced by adding to other exceptional items
- $33.6 million for the preservation and maintenance for Capitol projects
- Funding previously was provided by the Capitol Renewal Fund which is supported by the agency’s enterprise funds which are expected to lose $1.6 million in the current biennium
- Need GR to supplement the Renewal Fund
- Nelson – What would you recommend as a new business model to support the History Museum since you noted in the LAR it cannot depend on its own income?
- Currently, the museum has been providing of its revenue 70% for operational expenses
- Could have funding through something like the hotel tax situation as it is a tourism entity; just could get some funds for the operational part
- Nelson – LBB notes the Capitol Renewal Fund will have more than $15 million by the end of the biennium, could that not be used for major projects like roof replacement and waterproofing?
- Some is restricted, and the fund would be depleted from those large projects
- Nelson – Is the roof the most important thing we need to do?
- Yes, have over 1,000 leaks and the roof is over 27 years old
- Bettencourt – Roof is number one priority; HVAC system changes, have you looked at the lifetime/maintenance of those?
- Have recently done HVAC/elevator upgrades; have done a number of things with the HVAC system since COVID