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The Senate Finance Committee released their interim report to the 86th Legislature.

The report examines several topics, including the Alamo’s historical site renovation, the Economic Stabilization Fund, the Texas Emission Reduction Plan, the structure of fees across state government, adult and juvenile corrections funding, the state’s trauma system, business personal property taxes, and interest rate disparities. Additionally, this report focuses on the cost and economic impact of Hurricane Harvey. For more details including conclusions, background and sources please view the complete report.

Spotlight on Recommendations

Charge #1 – Hurricane Harvey Relief and Recovery Charges

  • Continue to monitor the ongoing costs attributed to the impact of Hurricane Harvey and ensure that state agencies, institutions of higher education and other governmental entities are maximizing available federal resources, including reimbursement for damaged facilities.
  • Encourage local governments to apply for available federal funding for rebuilding efforts, including HUD CDBG-DR funds, hazard mitigation grants, flood mitigation grants, and other federal assistance programs.
  • Monitor the disbursement of hazard and flood mitigation funding to ensure there is a clear process for applicants and an appropriate cost-share between federal, state, and local governments.
  • Continue to monitor Harvey’s impact on student population shifts and property value decline affecting local school districts. Review policies utilized during the interim to address these impacts and consider ways to streamline processes for future disasters.
  • Implement a home single-inspector system for assessing storm-related damage. The inspection system should streamline government in a way that reduces burdens for homeowners and helps communities recover after a disaster.
  • Improve public awareness of the National Flood Insurance Program. Better utilization of this program will help ensure families have the resources necessary to rebuild following a severe weather event.
  • Consider ways to streamline agency reporting processes to improve the accuracy and availability of cost-related data for Hurricane Harvey and future disasters.
  • Consider ways to better track the flow of Disaster Fund transfers, reimbursements, and balance updates.

Interim Charge #2 – Alamo Historical Site Renovation

  • Continue to assess the Alamo Complex management structure for potential improvements and to safeguard its operational transparency and compliance with the Public Information Act; and
  • Ensure the planning and implementation processes of the Alamo Master Plan are collaborative and restores the sites historical reverence—with a significant emphasis on the Battle of 1836.

Interim Charge #3 – Economic Stabilization Fund Investment

  • Allow a greater portion of the ESF to be invested in high-yield strategies while maintaining enough liquidity in case of emergency or natural disaster. Seek out alternate methodologies to establish the sufficient balance.
  • Reconsider the manner by which the ESF cap will be determined, potentially by exempting federal funds as part of the calculation.

Interim Charge #4 – Texas Emission Reduction Plan

  • Consider ways to maximize TERP appropriations to ensure compliance with the Federal Clean Air Act and to ensure funding achieves its intended purpose.
  • The Legislature, in collaboration with the Texas Commission on Environmental Quality, should regularly review individual TERP programs and perform an analysis of how each program is being utilized, its value to the TERP mission, and its economic benefit to the state.
  • Review the current TERP fee structure, including fees set to expire at the end of the fiscal year, and the impact those fees have on the grant program, fee-payers, and the budget.

Interim Charge #5 – Request to Exceed Review

  • Review budget riders and consider ways to reduce number of unnecessary interim actions by the Legislative Budget Board and Governor.
  • Provide for more consistent timeframes and approval processes for Requests to Exceed.
  • Review budget riders and consider ways to consolidate similar Requests to Exceed.

Interim Charge #6 – Fee Structure Review

  • Ensure that fee revenue is being used for its intended purpose.
  • Consider reducing or eliminate unnecessary fees as the budget allows.
  • Pursue a long-term strategy to reduce reliance on GR-D balances to certify the state budget.

Interim Charge #7 – Corrections

Juvenile Justice System

  • Align funding with the state’s goal of ensuring that juvenile offenders who can be served appropriately in the community are placed accordingly.
  • Review the appropriate number and locations of TJJD residential facilities with consideration given to adequate local employment pools, infrastructure needs, and safety of staff and committed youth.
  • As the budget allows, extend existing investments and focus on building community-based service resources for low and medium risk offender youths.
  • Identify gaps in specific capacity, including committed youth with long-term and emergency intensive mental health needs.
  • Analyze the impact of adjusting probation formulas to account for factors such as offender risk and compensation for referrals diverted from the system.

Adult Probation

  • Review and consider the Community Supervision and Correction Department Funding Committee’s report and associated recommendations related to adult probation funding.
  • Consider options to make the current hybrid formula/grant system more equitable.
  • Analyze impact of specific adjustments to the basic supervision formula, including offender risk, location, and treatment needs.

Interim Charge #8 – Trauma Funding

  • When considering changes to trauma revenue sources, such as the Driver Responsibility Program and red light cameras, the Legislature should identify permanent funding sources to sustain the state’s trauma system.

Interim Charge #9 – Business Personal Property Tax

  • Consider changing the current $500 exemption by adjusting it upward to keep up with inflation.
  • Continue studying options for reducing the business personal property tax burden on Texas businesses.

Interim Charge #10 – Interest Rate Disparity

  • Consider ways to phase in tax-parity over time as the state budget allows.
  • Direct the Comptroller to gather comparative data to determine the impact of interest rate disparities on tax levy challenges.