WEEK IN REVIEW
SENATE TO OPEN BUDGET HEARINGS NEXT WEEK
(AUSTIN) — Monday, January 30th, will mark the first of many public hearings on the state budget, as lawmakers try and decide how to allot a record amount of surplus cash and projected revenue. Though the comptroller has forecast as much as $188 billion in available funds, statutory and constitutional spending limits will keep the actual amount appropriated to pay for state services in 2024 and 2025 much lower. Both chambers have filed budgets that would spend $130.1 billion in discretionary state revenue. Both include $15 billion set aside for property tax relief, with the Senate earmarking $3 billion of that amount to raise the homestead exemption from $40,000 to $70,000. Governor Greg Abbott and Lt. Governor Dan Patrick have each vowed to deliver historic property tax cuts this session.
The budget process in the Senate works like this: members of the newly expanded Senate Finance Committee will hear from every agency in the state regarding their upcoming funding needs. These hearings are scheduled through the second week of February, and members of the public are allowed to appear and offer their input on the state's spending priorities. After these hearings, the committee will divide into work groups that will closely examine a particular portion of the Senate budget plan. Those groups will present a final budget to the full committee for adoption sometime in March. Once a final draft is completed, it will go to the full Senate for approval. In recent years this has been relatively non-controversial, with the Senate draft receiving unanimous approval from the body in the last three sessions.
The House has a similar process, and once both chambers have approved final proposals, five members of each will come together in a conference committee to hammer out any differences between the two bodies. This can sometimes lead to friction as each chamber fights for their version of the budget, but that doesn't appear likely this session as both houses have submitted draft proposals that would spend the same amount. While the details differ, on the big issues there is common ground: both budget drafts set aside $15 billion for property tax relief and both would spend the same amount on state health services and public education. Once the conference committee has come to an agreement, a final draft will be presented before both chambers for an up-or-down vote and then it heads to the governor for his signature.
The state budget is divided up into ten articles that contain similar services. As ever, the two largest articles are Article II, health and human services, and Article III, public education. Together they comprise more than three quarters of discretionary state spending. That means the Senate proposal will include $59 billion for public schools and $41 billion for state health services. Those two articles contain 77 percent of state funds allocated in the Senate budget, and when taken with federal funds and dedicated state revenue, will make up just under 72 percent of the all-funds budget.
This will be the first session in eight years that a new chair will lead the Senate's budget writing efforts, with Houston Senator Joan Huffman taking over from long-time chair and newly appointed Secretary of State Jane Nelson. Huffman has previously made her mark on fiscal legislation with major pension reform bills for the state's teacher and public employee retirement funds. “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," Huffman said in a press release accompanying last week's budget filing. Public hearings begin Monday, January 30 at 10 a.m. with Article I, which comprises the budget for general government and includes the office of state comptroller and public pension funds.
The Senate will reconvene Tuesday, January 31 at 11 a.m.