Texas House and Senate base budgets leave billions in revenue on the table while emphasizing tax relief, school funding, border security and more
Avoiding busting the state's constitutional spending cap and leaving tens of billions in general revenue on the table, Texas House and Texas Senate budget writers on Wednesday both unveiled spending plans that emphasize tax relief, border security, school funding, and more. The base budgets – opening proposals for the Legislature’s most significant work product – are similar in total amounts but, naturally, differ on the details. They both leave roughly $50 billion unspent from the total revenue estimated by Comptroller Glenn Hegar . One veteran Texas budget watcher told QR these plans are “amazingly similar.”
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Avoiding busting the state's constitutional spending cap and leaving tens of billions in general revenue on the table, Texas House and Texas Senate budget writers on Wednesday both unveiled spending plans that emphasize tax relief, border security, school funding, and more.
The base budgets – opening proposals for the Legislature’s most significant work product – are similar in total amounts but, naturally, differ on the details. They both leave roughly $50 billion unspent from the total revenue estimated by Comptroller Glenn Hegar . One veteran Texas budget watcher told QR these plans are “amazingly similar.”
The Senate's version, filed by Finance Chair Joan Huffman , R-Houston, includes Lt. Gov. Dan Patrick 's promised increase in the homestead exemption to $70,000. The House version, filed by Appropriations Chairman Greg Bonnen , appears silent on homestead exemptions but adds an additional $3 billion or so for tax compression as enabled by school finance reforms made in 2019.
The House version is a $288.7 billion "all funds" budget. $136.4 billion of general revenue is spent in the lower chamber's budget. The last budget was something like $116 billion in GR.
For education, the House leaves the basic allotment around $6,100 each year. It also appears to allow for flowing more money through the various school finance formulas, as has been suggested by former Public Education Committee Chairman Dan Huberty , among others. “The Texas House’s proposed budget prioritizes the needs of our rapidly-growing state while also balancing our once-in-a-generation revenue availability with our duty to control spending in a way that is both fiscally conservative and constitutional,” Speaker Dade Phelan said in a written statement.
“House Bill 1 maintains our commitment to our public education system, directs much-needed dollars toward enhancing our mental health resources for children and adults, dedicates funding toward our continued border security efforts, supports improvements to our workforce development pipeline and advances our goal of property tax relief,” he said.
Unsurprisingly, Lt. Gov. Patrick was a more loquacious.
“The state (general) fund budget totals $130.1 billion, an increase of $11.9 billion, or 10.1%. The total of all funds budget, including federal funds, is $288.7 billion, a decrease of $8.5 billion or 2.9% due to the removal of one-time federal COVID-19 funds.,” Patrick said of the Senate’s plan. “SB 1 is an estimated $4 billion below the spending limit set by the Legislative Budget Board in November 2022 for the FY 2024-2025 budget,” Patrick noted. He also said “the legislature retains an additional $3.5 billion in spending capacity under the FY 2022-2023 spending limit and has an estimated $5.5 billion of federal American Rescue Plan Act dollars to allocate.” “The press has reported there is a $32 billion surplus above our spending limit,” Patrick said, referring to the carryover balance from the last biennium. “The LBB says there are billions more available.”
“As I have stated previously, multiple times, first and foremost, we must return a significant portion of the record surplus to those who created it: the taxpayers,” Patrick said. “That is why we have increased the homestead exemption to $70,000 in our base budget.”
"As of today, our state's economy has become the envy of the world,” Chair Huffman said. “It is important to note that Senate Bill 1 is the starting point, but I am confident that the final product will make historic advances for the people of Texas, while also keeping an eye on the future, for generations to come.”
Rep. Armando Walle , D-Houston, a senior Democratic member of House Appropriations, said “With the state’s general operating budget covered in this initial draft, legislators will now need to work out how to spend this unprecedented and historic surplus of dollars.”
“This money came from the people of Texas and should be invested back into our communities in meaningful ways that bring about lasting change,” Walle said. “This session, I will fight for these dollars to go to creating good jobs, improving our education system — not least by increasing teacher pay — and to expanding access to life-saving health care.” Here are some of the House base budget highlights, via the Office of the Speaker :
Border Security - $4.6 billion to maintain the state’s commitment to border security
Higher Education - $57 million to expand the nursing and mental health professional workforce
Health Care - $2.3 billion toward increasing mental health bed capacity as well as funding repairs and renovations at existing facilities, $331 million toward contracted state hospital beds and expanded community inpatient capacity, $60 million for community mental health grant programs, $55.5 million for crisis services, such as crisis stabilization units and youth mobile crisis outreach teams, and $44.6 million toward expanding programs for high-risk children through multi-systemic therapy and enhanced mental health services for the community of Uvalde.
Infrastructure - $500 million for the General Land Office to continue the state’s share of coastal protection efforts at the Gulf Coast Protection District and fund the cost sharing agreement with the U.S. Army Corps of Engineers for additional coastal barrier projects, contingent on congressional funding authorization, $400 million for the Texas Water Development Board toward flood mitigation efforts, and $150 million for the Texas Department of Transportation toward port capital improvement projects.
Property Tax Relief - $15 billion for property tax relief efforts
Public Education - $38.4 billion in general revenue, which fully funds enrollment growth and the state’s current law requirements under House Bill 3 from the 86th Legislature, $600 million for school safety equipment and safety measures, building on the $400 million investment toward such efforts during the legislative interim, and $55 million for a K-12 data privacy cybersecurity initiative.
Public Safety - $334 million for the Texas Juvenile Justice systems, including $200 million for additional mental health facilities and $134 million for juvenile probation departments , and $22 million toward improving the state crime lab and eliminating the forensic toxicology backlog. Here are some of the highlights from the Senate budget, via the Office of the Lt. Gov :