Brite Divinity School Texas Budgetary Process Article Discussion

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3. Are there any underlying conditions in Texas budgetary process that will make the steps less efficient during crisis time (500 words)

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From property taxes to teacher pay, here’s how the Texas Legislature handled spending
priorities
BY EDGAR WALTERS AND DARLA CAMERON UPDATED: MAY 31, 2019
Behind closed doors at the Texas Capitol, Texas lawmakers spent weeks negotiating which
public programs should receive funding – and how much — in 2020 and 2021.
Here’s how budget writers worked out key differences over how to spend the state’s anticipated
surplus. Including public schools, teacher salaries, women’s health, prison guard pay and more,
we’ve laid out some of the biggest spending priorities to see how lawmakers compromised
before sending a final version to Gov. Greg Abbott, who over the next few weeks may veto
individual line-items he objects to. These figures come from the Legislative Budget Board.
While Hurricane Harvey recovery funds for school districts and future disaster preparedness are
big-ticket spending items this session, they are not included in this analysis because they are
mostly included in a “supplemental” budget that pays for leftover expenses from the 2017
legislative session.
Total 2020-21 budget
FINAL BUDGET
HOUSE
SENATE
$251 billion
S251 billion
$248 billion
Doesn’t include any money from Includes a $2.3 billion withdrawal Doesn’t include any money from
the state savings account
from the state savings account the state savings account
After lawmakers agreed to further increase state spending on public education and property tax
cuts, the budget ended up nearer to the House’s larger price tag. But lawmakers opted not to
touch the Economic Stabilization Fund, the state’s savings account fed by oil and gas tax
collections, in the 2020-21 budget. Instead, they authorized a record $6.1 billion withdrawal
from the state savings account in a “supplemental” budget that pays for Hurricane Harvey
recovery and infrastructure projects.
School funds and teacher pay
FINAL BUDGET
HOUSE
SENATE
$6.5 billion
$6.3 billion
$6.3 billion
To increase base funding for each To increase base funding for each To increase base funding for each
student by $1,020 and let school student by $890 and pay for a student by S740 and pay for a
districts determine staff pay raises roughly $1,300 minimum raise for $5,000 raise for teachers and
all school employees
librarians
In the end, lawmakers agreed to increase the price tag of the investment they were willing to
make in the section of the budget governing public education and school property taxes.
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The House and Senate had originally agreed to spend $9 billion in new state funds on schools
and tax relief, but their final compromise came to around $11.6 billion. An earlier sticking point
between the chambers was how much money to set aside for across-the-board teacher pay raises,
but the final compromise aligned more with the House’s original proposal to give school districts
flexibility to determine pay raises.
Lawmakers mandated, however, that 30% of a school district’s additional funding go toward pay
raises for school employees, with priority given to teachers with more than five years of
experience.
Cont
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at
Property tax cuts
FINAL BUDGET
S5 billion
An average 8-cent property tax
rate cut in 2020 and 13-cent cut in
2021, without a sales tax increase
HOUSE
$2.7 billion
4 cent property tax rate cut
SENATE
$2.7 billion
Up to a 15-cent property tax rate
cut, but only if lawmakers and
voters agree to raise sales taxes
“S
After a proposal to raise the sales tax to pay for more sweeping property tax cuts failed at the
Legislature, lawmakers opted to spend $5 billion in state funds on property tax cuts well
above the $2.7 billion they originally proposed.
Legislators say the $5 billion would lower tax rates by an average of 8 cents per $100 property
valuation in 2020 and 13 cents in 2021. That would mean a tax cut of $200 for the owner of a
$250,000 home in 2020 and $325 in 2021.
Medicaid
FINAL BUDGET
S66.5 billion
Pays for new projected patients,
requires cost cuts
HOUSE
S68.6 billion
Pays for new projected patients
SENATE
S67 billion
Pays for new projected patients,
requires cost cuts
I
Lawmakers included in their final budget a proposal from the Senate to essentially cut $900
million from the federal-state health insurance program for the poor and disabled by ordering the
state’s health commission to implement “cost containment.” The budget does not cover expected
growth in Medicaid costs, meaning lawmakers will almost certainly have to pay for leftover bills
in a supplemental budget when they reconvene in 2021.
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3) State support for health and human services has dropped and could end up being a real
decrease, even after the 2021 session’s “IOU” for Medicaid and CHIP.
In Article II of the budget, where lawmakers authorize most health and human services funding,
the official All Funds amount translates to an increase of $488 million, or 0.6 percent, compared
to 2018-2019. But focusing on state (non-federal) support for HHS, that turns into an
almost $1.9 billion (5 percent) two-year decrease. This is due mainly to a better match
rate for Medicaid, the Children’s Health Insurance Program (CHIP), foster care, and other
federally supported services, plus the exclusion of most medical cost-per-client growth in
Medicaid and CHIP. This latter amount, estimated at $1.9 billion in General Revenue midway
through the 2019 session, could drop to $1.5 billion if state budget-writers’ S350 million “cost
containment” goal is achieved before 2021 ends. Otherwise, the 2021 Legislature will have to
deal with this in a supplemental spending package. Dividing Article II into Medicaid and non-
Medicaid services like child protection or public health makes it easier to see how the so-called
“Medicaid IOU” gives budget writers some breathing room that, while not realistic, is better than
actual cuts to health care for low-income Texans.
4) Higher education funding is not what it seems and underinvests in financial aid.
Higher education advocates may be puzzled about a $4.6 billion, or 22 percent, All Funds boost
in state-budget support for colleges and universities, which turns out to be only a 5 percent
increase if we make an “apples to apples” comparison. “Apples to apples” would be financial aid
and support for higher education institutions that were already in the budget. But “apples to
oranges” is the new $3.5 billion in the higher education budget for disaster management.”
In other words: Much of the All Funds increase of $4.6 billion is not due to a real or significant
boost in support for need-based financial aid, public community colleges or universities. H.B.
2704 crantadithe eyes Division of Emerson Management act of the Texas A&Micantem
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Later Sunday, the comptroller’s office said that unless the Legislature spent money out of the
savings account before July, the balance for the fund would be revised down, but not by more than
$1 billion
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In October, Hegar estimated that the state budget would have a nearly $3 billion balance for the
fiscal 2020-21 biennium. The balance of the Economic Stabilization Fund, Hegar announced at the
time, would be around $9.3 billion by the end of the 2021 fiscal year, in August of that year.
her
The virus has already shocked economics around the country, though it’s unclear how extensive the
economic downturn will be. As the new coronavirus grew into a pandemic carlier this month and
Saudi Arabia declared a price war on Russia, oil prices plummeted to their lowest points in
decades. Since Texas is the nation’s top oil-producing state, its economy and budget are particularly
sensitive to oil prices.
Sse
SO!
Then, as the virus started spreading within the state’s borders, officials shuttered or restricted
several industries operations to limit public interactions and stem the growth of new infections.
Those two situations created a double whamury by slowing two key revenues that fuel the state’s
budget and economy: sales taxes and oil and gas production. Experts have said the economic
damage will largely depend on how long the public health crisis lasts.
Last week, Gov. Greg Abbott issued an executive order directing bars, dine-in restaurants and
schools to close as he estimated that tens of thousands of Texans could test positive for the virus in
coming weeks.
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500 words

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economic environment

Texas budgetary process

Challenges for Texas in 2021

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