Budget Update: Where We Stand Eva DeLuna Castro Senior Budget Analyst Center for Public Policy Priorities June 1, 2011

What’s the solution when ideology doesn’t match reality?

Budget instructions to state agencies (May 2010) Agency requests go to LBB & Governor’s Office (August) Public hearings before LBB/Gov. (Sept./Oct. 2010) Governor’s Budget Proposal LBB Budget Proposal Comptroller’s Revenue Estimate Before the 82 nd Session Started… With a few exceptions: “base” = amount of GR and GR-Dedicated Funds that agency spends in , minus 5% Four-fifths vote to override

Committees named Senate Finance (budget and taxes) Public hearings (6 subcommittees) Mark-up House Appropriations (budget bills) Public hearings (5 subcommittees) Mark-up Committee version to full Senate (up or down vote, Article XI) Committee version to full House (floor amendments, Article XI) Conference committee on budget Legislative Process (82 nd ) Ways & Means: taxes

Conference committee report to House and Senate SenateHouse To Comptroller for certification To Governor for vetoes To state agencies (operating budgets) Final Legislative/Executive Process Two-thirds vote to override (if still in session)

General Revenue Shortfall, Conference Committee Budget Requested GRGR in HB 1 and HB 4 General Revenue Shortfall HHS$ 31.0 b$ 22.4 b- $8.6 b-28% Education 56.4 b 48.1 b b-15% Criminal Justice 9.2 b 8.2 b b-11% The rest 6.2 b 4.0 b b-35% TOTAL$102.8 billion$ 82.7 billion- $ 20.1 billion-20%

“Worst Case” Children’s Budget

Inflation-Adjusted Spending Per Student

Tarrant County Impacts (biennial) Proposed School Finance Changes: $172 million reduction vs. current law. Enough to fund 2,400 ISD jobs, with private-sector impact of 3,400 jobs. Additional losses because of various grants eliminated or cut (preK, teacher incentive pay, etc.) Health & Human Services: Appropriations level is $840 million, or 17%, less than is being spent in (about $4.8 billion total). Current services requires $1.8 billion more, of which $1.0 billion is federal funds

Net State M&O Revenue Change, 2012 and 2013 (million $) % Reduction in 2012 % Reduction in 2013 Arlington ISD-$ %-1.5% Azle ISD Birdville ISD Carroll ISD Castleberry ISD Crowley ISD Eagle Mt-Saginaw ISD Everman ISD Fort Worth ISD Grapevine-Colleyville ISD Hurst-Euless-Bedford ISD Keller ISD Kennedale ISD Lake Worth ISD Mansfield ISD White Settlement ISD Source: SB 1811 Legislative Budget Board District “Runs”, May 27, 2011.

Doctors Taking Medicaid Patients, 2010

Texas Needs A Balanced Approach to Balancing the Budget

Use the Rainy Day Fund Utilize All Federal Funds Available to Us Find New Sources of Revenue How Can Texas Close the Revenue Gap?

Alternatives to Cuts HB 3640: Tax Speed-Ups $1 billion Use Rest of Rainy Day Fund $6.5 billion TOTAL $7.5 billion (HB 1 already assumes $800 million increase in school property taxes, $100 million+ in fee increases, and tuition hikes)

Longer-Term Solutions Apply Sales Tax to Services $5 billion Repeal high-cost natural gas tax break $2 billion “Healthy Texas” taxes $3.5 billion Hospital quality assurance fee $350 million TOTAL $11 billion

Let’s examine our priorities

Let’s make sure Texas’ story is NOT about shortchanging our kids.

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