SENATE APPROVES $308 BILLION BUDGET
(AUSTIN) — The Senate gave unanimous support Monday to a plan that would spend $308 billion in state and federal funds over the next two years. Lawmakers came into Austin with $32 billion left over from the last budget, and have used that surplus to increase salaries for state employees, teachers, and healthcare workers, increase benefits for retired teachers, and to enact the largest property tax cut in state history. Houston Senator Joan Huffman, in her first session leading the Senate Finance Committee, said the budget responsibly allocates record revenue according to the state's conservative spending philosophy. "This is a once in a generation opportunity to address long standing needs, pay down debts, make strategic investment in our state's infrastructure and historic sites, and more importantly, give money back to the taxpayers," she said.
Houston Senator Joan Huffman was praised by colleagues for her leadership in her first session as chair of the Senate Finance Committee.
The budget as passed by the Senate looks to deliver $16.5 billion in tax cuts over the next two years. It will accomplish this primarily through raising the homestead exemption, allowing homeowners to write off $70,000 of their primary home's value before assessment, up from $40,000. Houston Senator Paul Bettencourt, who wrote the legislation that will enact these cuts, said that the average homeowner will save around $800 on property taxes every year. The bill also expands an additional exemption that for Texas homeowners aged 65 or older, allowing them to write off a total of $100,000 in value, with expected average savings for these homeowners exceeding $1,000 annually. Additional tax savings will come through ongoing compression of local school property tax rates, and increased exemptions on business personal property taxes and business inventory taxes.
The state spends more than half of its revenue on public education and is one of 15 states where education expenditures exceed the 50 percent mark, said Education Committee chair Brandon Creighton. His workgroup recommended an increase in overall state funding for public education by 21.6 percent, increasing the state share for maintenance and operation at local schools while reducing recapture from wealthy districts. Creighton said the bill also supports teachers in Texas like never before, with a $2,000 across-the-board pay raise for all teachers, and an additional $4,000 raise for teachers in rural districts where salaries lag behind the state average. It expands the Teacher Incentive Allotment, a bonus program where exceptional teachers can earn merit bonuses for classroom performance. It also includes the first cost of living adjustment for the pensions of retired teachers since 2013. For higher education, the bill would create a new endowment fund for university systems other than the University of Texas and Texas A&M, along with an additional $750 million to enhance career and technical training at the state's technical college system.
State health services are the other major item in the budget, making up about a third of discretionary state spending. Health and Human Services chair Lois Kolkhorst led this workgroup which recommended $2.3 billion in pay raises for Medicaid caregivers, who Kolkhorst says provide more than half of the program's services. Mental health services are also prioritized, with state hospital employees expected to receive raises of almost forty percent. Finally, additional staffing and construction will open up nearly 1,500 beds of space in the state's mental institutions.
The House has already passed its budget, so now five members of each chamber will come together to try and hammer out the differences between the two chambers. Perhaps the biggest question is how to deliver tax relief. Though both proposals would spend the same amount on tax cuts, the House prefers to deliver tax savings through caps on increases in home appraisal value, a proposal that Lt. Governor Dan Patrick has said won't pass the Senate. Lawmakers have until May 31st to try and find a compromise that satisfies both chambers.
The Senate will reconvene Tuesday, April 18, at 11 a.m.