CPPP Senior Policy Analyst, Chandra Villanueva, co-wrote this post.
This post was updated on August 16th, 2017.
The final version of HB 21 is a step in the wrong direction, worsening funding disparities between charter and traditional public schools. HB 21 also maintains an inefficient funding stream known as ASATR (Additional State Aid for Tax Reduction) for some struggling districts instead of fixing the funding formula that led to their financial hardship in the first place. Finally, HB 21 fails to offer any solutions for Texas’ outdated and underfunded school finance system.
To finance HB 21, the Legislature agreed to use a familiar budget gimmick of putting off a hefty Medicaid payment until the NEXT 2-year budget. Think about putting your rent payment on your credit card and dealing with it later, except it’s the state putting a whopping $563 million bill on its credit card and relying on a future Legislature to pay for it. We oppose both the method of finance and the dramatically smaller investment in K-12 education (the final version of HB 21 gives $351 million for K-12 and $212 million for TRS-Care, compared to $1.8 billion in the House’s original version of the bill).
Deferring Medicaid payments is tolerable if there is a clearly stated commitment by both chambers to fully fund Medicaid supplemental needs in the 2019 session (already projected at least $1.2 billion), and a statement that this deliberately-made shortfall will not result in reductions in benefits, eligibility, or provider payment rates. Considering this year’s self-inflicted tight budget, proposals in this special session to limit state spending, and the Legislature’s history of tax cuts, it’s hard to imagine that will be the case. Chairman Jane Nelson offered such assurances earlier in the Senate Finance Committee debate, but with the Legislature now adjourned sine die, there have not been any written statements providing such assurances.
The Legislature’s decisions to reduce state-budget support for public education have increased local property taxes. Similarly, their decisions not to adequately fund Medicaid have resulted in a shift of health care costs to counties, which now fund over half the state share of Texas hospitals’ Medicaid revenues.
It’s important for all Texans to understand this, and to tell their elected officials that financing and overseeing basic public services is far more important than passing tax cuts that leave the state budget short-funded and shift costs to counties and school districts. The inevitable result of starving the state treasury is to pit health care against education, when the state should instead be fully supporting both of these equally important needs.