House sends school-finance bills to senate with supermajority support; House Panel Talks Up Use of State Reserves for Necessities Like Education, TRS-Care

House Sends School-Finance Bills to Senate with Supermajority Support: The Texas House hardly could have made it clearer today—by overwhelming margins, House members sent the Senate a $1.9-billion school-funding bill (HB 21) by a vote of 130 to 13, and they passed a measure (HB 30) to pay for it from the state’s $10-billion-plus reserve fund, the Economic Stabilization Fund, by a nearly identical margin of 131 to 13. They passed the third and last piece of the legislative package on school funding, a bill establishing grant funding for school districts to serve students with autism (HB 23), by a vote of 144 to 0.  The stage is now set for a collision between the clearly expressed will of the House and the policy predilections of the Senate’s presiding officer, Lt. Gov. Dan Patrick, whose attempt to hold school funding hostage to a private-school voucher program has been cast aside by the House.

Key House Panel Talks Up Use of State Reserves for Necessities Like Education, TRS-Care
: On Monday morning the House Appropriations Committee held what amounted to a tutorial on the purpose of the state Economic Stabilization Fund (a/k/a the Rainy Day Fund). As they took testimony on four bills designed to tap the ESF in various ways, committee members and witnesses engaged in a myth-busting dialogue to dispel what one termed a “false narrative” about the ESF reserve, which has been tapped repeatedly since its establishment in the 1980s.
Witness Dale Craymer, president of the business-oriented Texas Taxpayer and Research Association (TTARA), was present as a legislative staffer at the creation of the reserve fund, and he quoted the bill’s author on its intent—“to take care of necessities like public education that sometimes suffer because of uncertainties” and to “offset unforeseen shortfalls” in state revenue. Craymer said the ESF of late has been treated like a “trophy,” as if piling up reserves were an end in itself, not a tool for managing the ups and downs of state revenue. The fund is projected to hold some $11 billion in the coming biennium unless it is put to use, Craymer said, and if it “lies fallow” it will be just so some “can brag” about it. Not using the fund as intended, he asserted, creates a cost to the state economy in lost investment, lost income, and lost jobs.
Rep. Larry Gonzales (R-Round Rock) and Rep. John Zerwas (R-Richmond), the committee chair, both took on the myth that the fund is intended only for one-time expenditures or for natural disasters. Neither of these ideas has any support in the history of the ESF. Both Gonzales and Zerwas also stressed that the state’s credit rating ultimately could suffer from the failure to use the fund in the face of obvious need. Rep. Kevin Roberts (R-Houston) suggested that those who resist use of the reserve fund are like a homeowner who won’t tap into savings to replace an air conditioner that gives out in the summer heat.
Reps. Donna Howard (D-Austin) and Trent Ashby (R-Lufkin) both offered as an example of such neglected need the shortfall in funding for the TRS-Care health plan for retired school employees, who will face sharp cost increases for their health care unless the Legislature acts. Howard put forward a proposal to provide some potential relief by dedicating some of the tax dollars headed for automatic deposit in the ESF to TRS-Care instead (HB 363 and HJR 52).
Both the House and Senate already have passed bills in the current special session to provide TRS-Care participants with some relief from health-care cost increases set for January 2018. Both chambers propose to spend about $212 million for the purpose over two years, in HB 20 by Ashby and SB 19 by Sen. Jane Nelson (R-Flower Mound). But the House would pay for the relief out of the ESF reserve fund, while the Senate refuses to consider that option and wants in effect to borrow the money from the state Medicaid budget and repay it later. This disagreement shows why it is not just an academic exercise to review the intent behind the ESF reserve fund and the many precedents for using it.  Look for continuing coverage of this hot topic in upcoming Hotlines as the special session heads into its last nine days.
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