SB 1 Is 11% Below What’s Needed for a Better Texas

Today, the Senate Finance committee kicked off public hearings on Senate Bill 1, the proposed state budget for 2014 and 2015. At $89 billion in General Revenue, the Senate’s starting point is 8 percent below a conservative estimate of the $97 billion needed just to keep the “bare bones” budget going while retaining all the cuts to schools and health care made in 2011.
SB 1 is also 11 percent below the $100 billion in GR that state agencies actually asked for and need to do their jobs, or 9 percent below their All Funds requests. If money is not added to the budget before the session ends to cover student/client growth and health care cost increases forecast for 2014-15, the outcomes could look a lot like what happened after 2011:  overcrowded classrooms, cost-shifting to local taxpayers, and rising tuition.
This afternoon, the Senate will hear more details on how public schools would be paid for in 2014-15. With an All Funds proposed increase of only 2.3 percent – and a GR-related increase that’s even lower, at 0.8 percent – state aid will not go up enough to cover enrollment growth of 3.7 percent, much less cover any inflation pressures facing school districts such as rising utility or gasoline costs, staff health insurance premiums, or other cost-drivers. Built into both the House and Senate budget drafts is the assumption that local property taxes for schools will increase by $1.5 billion. Public testimony on SB 1 proposed education funding is scheduled for today and will continue tomorrow, moving on to higher education, which would see an almost 2 percent GR cut in SB 1.
Health and human services public testimony is scheduled for January 30 and 31, but Senator Williams announced this morning that Friday, February 1, may also be needed to finish hearing public input. SB 1 as introduced does not include the more than $1.4 billion in new General Revenue needed for health care cost increases, and underfunds Medicaid caseload growth by $395 million GR. If these items don’t make it into the final budget, legislators should expect a Medicaid IOU of almost $1.8 billion in 2015.

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