State House and Senate Differ Markedly on Budget for Schools

The Texas Senate Finance Committee on Wednesday approved a draft 2018-19 budget (SB 1) that would let per-pupil funding for public schools stagnate, keeping the basic allotment for all districts at the same level as in 2016. Under the Senate plan, the state would actually reduce the amount of state general revenue for schools substantially, making up the difference by relying more heavily on rising local property taxes.

Meanwhile, while pleading that there’s no more money available for public needs, the Senate would continue to reduce the funding available, by doubling down (in SB 17) on cuts in the franchise tax for businesses, a tax that was itself meant to make up for past cuts in other education funding sources. The Senate in SB 1 also is cutting higher education outright, with cuts ranging from 6 percent up to 10 percent for individual institutions.

The Senate also refuses thus far to tap the Economic Stabilization Fund (Rainy Day Fund), even though it is going to be at its highest level ever, $12 billion, available for use in the budget now being written.

The House budget embodied in HB 1 and HB 2 is quite different. HB 1 raises the basic allotment for all districts an average of $210 per pupil, adding $1.6 billion for public schools over the current biennial budget. In the House Public Education Committee on Tuesday, committee chair Dan Huberty (R-Houston) announced that a further increase is in the works, bringing the total amount closer to $1.9 billion. In effect, the House is using for public education the increased revenue from property-tax appraisal growth, not exploiting that growth to make offsetting cuts in general revenue like the Senate.

The Senate and House budget plans also differ in their treatment of TRS retiree health care and the long-foreseen shortfall in pay-as-you-go funding for the TRS-Care program. The Senate budget as of now ponies up about $300 million, just 30 percent of the amount needed to cover the shortfall. The House does better, providing $500 million thus far via HB 2.

The House proposes tapping the Rainy Day Fund for this and other purposes. House Speaker Joe Straus (R-San Antonio) has blasted the Senate for avoiding a vote to use the Rainy Day Fund by budgetary sleight-of-hand, delaying into the 2020-2021 budget cycle expenditures that ordinarily would come due in fiscal 2019.

Neither the Senate nor the House is finished with its budget-writing work at this point. The Senate version comes to the Senate floor next Tuesday, according to Finance Committee chair Jane Nelson (R-Flower Mound). The House budget bill for 2018-19, HB 1, and the supplemental budget bill for 2017 (HB 2) are still in the House Appropriations Committee.

The budget is the one must-pass bill of the 2017 session. If the House and Senate cannot reconcile their differences on spending issues before mandatory adjournment May 29, a special session called by the governor can be anticipated this summer.