PROPOSED SENATE BUDGET INCLUDES $15B FOR TAX CUTS

(AUSTIN) — Texans would see their homestead exemption almost double under the first draft of the state budget filed in the Senate Wednesday. Homeowners could write off $70,000 in taxable value on their homes, up from the current $40,000, at a total cost to the state of $3 billion. Another $12 billion has been set aside for the purpose of reducing property taxes through additional legislation. That's almost half of the $32 billion surplus projected to be left in the state treasury when the current biennium ends in September. In all, the bill, designated Senate Bill 1, proposes to spend $130 billion in discretionary state revenue on services through 2025. "SB 1 keeps our promises to Texans and charts a course for our state’s continued prosperity," said Lt. Governor Dan Patrick in a statement. "Our conservative budgeting principles applied throughout SB 1 make sure that government does not grow faster than population times inflation."

In addition to the billions in property tax relief, the budget follows closely the priorities laid out by Patrick late last year. It includes $350 million in additional funding to rural sheriffs departments and other rural law enforcement. It sets aside $2.5 billion to pay for a new permanent fund for more institutions of higher education, similar to the Permanent University Fund that is only available to the University of Texas and Texas A&M systems. That amount is on top of almost $10 billion for formula funding for four-year institutions of higher education and $650 million for reforms in the state's community college systems.

The Senate welcomed representatives of the World Champion Houston Astros to the Senate Chamber on Wednesday, celebrating the teams dominant run through the MLB postseason culminating in a second title in six years to the ballclub.

The bill also includes $9 billion in spending for mental health services across 26 state agencies, including millions to hire new staff at state hospitals, for more community-based in-patient beds, and mental health jail diversion programs. For state roads and bridges, it would direct more than $35 billion to transportation infrastructure and half a billion dollars toward port and ship channel improvements. It includes $400 million to fund a restoration of the Alamo.

The Senate also proposes to spend $4.8 billion on Operation Lone Star, the state's border security operation.

This is the first budget bill filed by incoming Senate Finance Chair and Houston Senator Joan Huffman. She will step into the role left by former Flower Mound Senator and current Secretary of State Jane Nelson, who in 2014 became the first woman appointed to lead a legislative appropriations committee in Texas. Huffman has been Lt. Governor Patrick's go-to lawmaker for sticky, complicated fiscal legislation. In past sessions she has authored and passed bills with broad bipartisan consensus to fix pension shortfalls in the Houston municipal system as well as the massive state employee and teacher retirement systems. Huffman's filed budget includes more pension fixes, directing nearly $900 million to pay off unfunded liabilities in state pension programs for law enforcement officers and judges, as well as billions to pay for pension reforms passed in previous sessions.

In a statement accompanying the filing, Huffman told members that her bill is just the first draft of what will become the Senate's spending plan for the next biennium. "We have an obligation to the people of Texas to continue our state's incredible trajectory by making investments that will keep Texas as the best place to live, work, and raise a family," she said. "The base budget is a starting point, and I look forward to working with my colleagues to develop a conservative and sustainable budget that addresses our needs and strengthens our economy." Once the budget is approved by the full Senate - typically in late March or early April - members must enter negotiations with the House, who also filed the first draft of their spending plan on Wednesday. They will have until the session ends on May 31st to present a final, unified version of the budget to Governor Greg Abbott for his signature.

The Senate will reconvene Tuesday, January 24 at 11 a.m.

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