Budget Surplus May Not Stretch Far

The 2014-15 budget process kicked off in earnest this week and the change in tone from two years ago is striking. Instead of debating where to cut, the fight is shaping up over what to fix.

As with every session, the “broken” list is long. Water. School finance. Transportation. Republican leaders are also talking about unwinding long-standing budget gimmicks and maybe offering up some tax relief. There’s real money available this year to address some of these objectives but not enough to tackle all of them fully.

Members of the House and Senate have unveiled base budgets of about $89 billion in general revenue spending. That leaves more than $12 billion of the $101.4 billion in general revenue that Comptroller Susan Combs said lawmakers have to work with this session.

But unpaid bills left over from the last session are expected to suck up nearly $7 billion of that surplus. That still gives lawmakers roughly $5 billion in general revenue. There’s also $11.8 billion in the Rainy Day Fund.

So where does that leave us? Around $17 billion left for lawmakers to play with, right? Not quite.

There are some expensive holes in the base budgets. The Senate budget assumes no Texans will join the Medicaid rolls after August 2013. Neither budget accounts for Medicaid services getting more expensive during the biennium.

Members of both chambers have all but said that no one should view these initial plans as realistic proposals. “Starting point” is a phrase that comes up again and again.

Also looming large over all of this is school finance, which dominated budget talk two years ago but will be stuck in a strange sort of limbo this time. Various groups and activists hope the Legislature will restore last session’s $5.4 billion in public education cuts. Lawmakers will be wary of taking any of that on until the resolution of an ongoing school finance lawsuit, which likely won’t happen before the summer. Lt. Gov. David Dewhurst wants to set aside some money under the assumption that the state is going to lose the lawsuit and be ordered to spend more on schools.

Underlying all this jockeying for dollars is a constitutional spending limit which could curtail lawmakers’ budget plans. The limit only applies to some parts of spending and remains a moving target, but a house official speaking on background predicted the limit will ultimately allow for spending some but not all (and maybe not even a lot of) the Rainy Day Fund.

That would likely sit well with Gov. Rick Perry, who has talked about tapping $1 billion from the fund for water infrastructure projects and perhaps for tax relief, but not much else.

“The most important use of that rainy day fund is to keep your hands off of it so that we keep a substantial savings account there,” Perry told KXAN earlier this month.

Charting the Budget

House and Senate budgeteers say their first efforts — the budgets filed on both sides of the rotunda this week — are mere starting points. This isn't where they'll end up, etc. etc., etc. That said, the House came in with a budget that is 1.15 percent smaller than the current budget. The Senate's starter is 1.61 percent smaller than the current model. And the current version will swell in a few weeks when lawmakers add supplemental appropriations to it to cover impending costs of Medicaid, fighting wildfires, medical care in state prisons and other sundries. Here's a look at the new proposals, by broad subject area, comparing the proposals to the current budget and to each other.

Budget by House and Senate, All Funds ($ in Millions)
FunctionEstimated/Budgeted 2012-13*Recommend 2014-15 (House)Change from Current (House)Recommend 2014-15 (Senate)Change from Current (Senate)
General Government $4,881.1 $3,890.9 -20.29% $3,877.8 -20.55%
Health and Human Services $68,632.3 $70,999.1 3.45% $70,033 2.04%
Public Education $52,389.5 $53,530.3 2.18% $53,617.5 2.34%
Higher Education $23,288.4 $16,875.8 -27.54% $17,015.1 -26.94%
The Judiciary $648.2 $640.9 -1.13% $640.9 -1.13%
Public Safety and Criminal Justice $11,742.8 $11,219 -4.46% $11,231.6 -4.35%
Natural Resources $4,934.2 $4,593.6 -6.90% $4,565.9 -7.46%
Business and Economic Development $22,315.8 $24,831.7 11.27% $24,804.3 11.15%
Regulatory $707 $764.7 8.16% $688.6 -2.60%
The Legislature $348.9 $357.3 2.41% $357.3 2.41%
Total, All Functions $189,888.2 $187,703.3 -1.15% $186,832 -1.61%

Legislative Notebook — Week 2

Lawmakers are still in the “fixin’ to” stage of the session taking a week off after a week on the job — not unusual in the years when presidents are being inaugurated — but the wheels are turning. Voting on House rules turned out to be less about the changes and more about who wanted them, but management easily fended off the proposals they found objectionable.

Senators will return to draw straws next week, finding out (maybe) who is serving a two-year term and who got a four-year term. The “maybe” in that last sentence is for the courts, which still have the Texas redistricting folders open; a ruling that changes all or some Senate districts could make the drawing pointless. Next comes committees, and some optimists think the House and Senate will have their lists by the end of the month — perhaps even next week.

• The 2014 stakes are down. Attorney General Greg Abbott ended the year with $18 million in his accounts, prompting yet another round of speculation about whether he will run for governor next year. He, like Gov. Rick Perry, has said he will make his plans public sometime after the session; the people around the attorney general deny stories that he has said otherwise to close supporters. This much is safe: It would be downright weird for an ambitious Texas politician with that much money in the bank to stay put. Abbott has $3 in the bank for every $1 Perry’s got. One question is about Perry’s backers, many of whom are also Abbott’s backers: Would they spend money on the governor to catch him up and have their money on both competitors in a race, or does it make more sense to back Abbott for one thing and Perry for another? Another: Why would Abbott wait? One lesson from former U.S. Sen. Kay Bailey Hutchison is that Perry can be stronger than he looks; on the flip side is the lesson from U.S. Sen. Ted Cruz, who found in his first run for office that Republican voters are willing to abandon an experienced conservative — lt. Gov. David Dewhurst — for a new one.

• Dewhurst ended the year with almost $2 million in his state campaign accounts, and with a huge asterisk in the notes section. He’s still sorting out the numbers after accusing top aide Kenneth “Buddy” Barfield of pilfering from the accounts, and said that’s why the latest report does not include a section on “non-political expenditures” from the campaign. To wit: "Because of the ongoing investigation of the activities of Kenneth Barfield, the Travis County District Attorney has requested that we temporarily delay filing Schedule I. We will amend the report to include Schedule I when we are advised to do so by the District Attorney. The Travis County District Attorney has communicated this request to the Texas Ethics Commission."

• The timing of a special session on school finance got some attention from the gossips this week, ranging from “there won’t be one” to when it might come. Autumn, after the courts are done? Next spring, after the courts and the primaries are done? It depends on what the courts rule, and whether they demand something quick. And it depends on politics, and whether Perry — who’d be the one to name the date — wants to get it out of the way or hold off until after a March 2014 primary that could turn some of the Capitol’s inhabitants into lame ducks.

• Both the House and Senate include about $89 billion in general revenue spending in the budgets they laid out this week; advocates with the Center for Public Policy Priorities say it would take $7 billion more to keep current services where they are now, and $19 billion more to bring services back to where they were two years ago before the budget cutting in 2011. Left out of the proposed plans: Increases for rising Medicaid costs, restoration of cuts in education spending, any funding for the Cancer Prevention Research Institute of Texas, any new funds for the governor’s economic development funds. Both Jim Pitts in the House and Tommy Williams in the Senate said this is just the starting point.

Newsreel: State Budgets and Campaign Money

In this edition of the Newsreel: The House and Senate have announced their starting budget proposals, and campaign funding numbers foreshadow the 2014 races for statewide offices.

Inside Intelligence: About Those Ethics Laws...

This week, we asked the insiders about ethics laws — a subject especially close to their own business interests. Spoiler: Their comments are very, very interesting.

Most — 61 percent — said lawmakers should be making more detailed disclosures of their personal finances. And three of every four insiders said lawyers and consultants in the legislature should disclose the names of clients who might have business before the legislature.

The insiders were split on an issue that has received more attention in and around the Capitol than from the general public — whether political consultants should be restricted from lobbying the people they help elect (and the ones they’ve opposed in campaigns). On that question 48 percent would like to see restrictions and 46 percent said they’re against limits.

As always, we’ve included a full set of verbatim comments to the survey; some selected excerpts follow.


Should lawmakers be required to make more detailed disclosures of their financial interests than they do now?

• "Not much can be discerned from current reports. The current requirements create a shroud of transparency, but they don't really tell anyone very much. Additionally, those reports should be on the Ethics Commission website instead of requiring someone to physically go to the office and make a request for the information."

• "The majority of legislators do business by the book. More disclosures would add fuel to the 'gotcha-journalism' that is plaguing democracy."

• "It's a wonder Texas has been governed all these years--including decades when Texas was a one party state dominated by Democrats--without stricter disclosure rules and regs. Texans are not entitled to know every single aspect of a candidate/member's life, including specific financial details and medical health."

• "Lawmakers should be judged on their policy. Who cares about the motivation as long as what they advocate is for the good of the whole."

• "Any personal business impacted by their work in the legislature should be disclosed."

• "The public's voyeuristic inclinations have gotten out of hand. They want to know too much and then find everyone they know that much about unacceptable. Transparency and sunlight are good for the system. But the game of gotcha politics has gotten out of control."

• "I think if they are getting paid by an entity that has business before the state or business before a local jurisdiction then they ought to be required to show the public where they get their kickbacks."

• "No... The Texas Tribune is overstepping the bounds."

• "Only 20 people in all the state look at those things, and only 10 people care."


Should lawmakers occupied as consultants and lawyers be required to disclose names of clients who might have business before the Legislature?

• "Not lawyers. Atty-client privilege. Non-lawyers, yes."

• "Yes, there is an appearance of impropriety when lawyers and consultants are representing companies or individuals with business in front of not only the Legislature, but in front of state agencies as well. I think we all can point to certain former legislators with whom this has raised questions."

• "Absolutely. Lawyers should also have to disclose any one who refers a case to them if they are involved in a lawsuit against a state agency."

• "Absolutely yes. It would be interesting to know if legislators have become wealthy after having the privilege of changing laws to create their wealth."

• "Candidate disclosure requirements and conflict of interest laws as well as the bribery statutes should cover this area."

• "Yes, but... Too many have hid behind that veil for too long. Fix that loophole. But what about an insurance salesman, do they have to report everyone who buys a policy? What about a realtor, do they have to report everyone who buys a house? There has to be some end to the madness."

• "This would clearly violate attorney-client privilege rules."

• "It is a tough call but if we want true citizen legislator, we have to accept the fact that these people have real jobs."

• "This is a tricky situation. Conflicts need to be disclosed but clients deserve confidentiality. Creative thinking will need to be applied to make this work for all principals."


Should lobbying by political consultants be restricted in some way?

• "Perhaps actually enforcing existing lobby laws as a start? Given that the majority of the Tribune's insiders are lobbyists, do you actually think you will get answers that see past self-interest?"

• "Campaign consultants appear to have a larger level of influence over their political clients, and the appearance is very shady when it comes to representing clients before there very candidates whom they helped get elected."

• "The only people advocating for restrictions against political consultants are the old lobby guard who have become too lazy to adapt to the new lobby environment. This is an 'adapt or die' business and the old guys are dying off. Besides, political consultants who lobby are the ones that take primary political risks every season and it is becoming obvious that is the easiest path to bypass the old guard to start a lobby career."

• "Much more disclosure"

• "Which other group of working folks would you like to restrict their ability to make a living and provide for their families?"

• "I'd like to know which campaign consultants, paid with PAC dollars from my company, are now lobbying against our interests. Seems reasonable."

• "They should register just like all lobbyists"

• "Lobbyists are involved in campaigns, why can't political consultants be involved in lobbying? What defines a political consultant? Lots of lobbyists are intimately involved in the campaigns making strategic and tactical decision. They certainly act like political consultants."

• "Don't know how to do it, and there are many other equally conflicted relationships--big contributors, for one."

• "Have no problem with them lobbying, but need significant disclosure of both business and political clients."

• "Consulting on campaigns then lobbying the members you consulted for is totally unethical and should be banned outright"

If you could add to state ethics laws — or repeal something currently in statute — what changes would you make?

• "Require lobbyists to wear NASCAR style patches from each of their 'sponsors'."

• "Former elected officials should only be allowed to donate their campaign contributions to charity or return them to donors. To allow a former lawmaker to make political contributions as they begin their lobby practice from funds they accumulated while in office is shameful."

• "Prohibit former lawmakers from lobbying for 2 years and require any former member who registers as a lobbyist to immediately return all campaign contributions."

• "Prohibit legislators or their staff from soliciting charitable contributions during the legislative session."

• "Make disclosure available online."

• "Give investigative ability to Texas Ethics Commission"

• "We need more reporting and fewer restrictions. You should be able to do anything you want, but everyone should know about it. It's a balance with a purpose."

• "I would put in a faster, more frequent electronic filing of political contribution reports so that the information would be available online very quickly."

• "Add reporting with in 48 hours, and delete the rest. Restricting how people spend their money is just more restriction of freedom."

• "Make it illegal for political consultants to lobby and make former members sit out two sessions before they can lobby."

• "Require legislators to disclose any debt owed to a consultant 30 days prior to a legislative session."

• "End government payments of any kind to Legislators, include local, state and federal, and end the phony retirement rule that permits current elected officials to draw salaries and retirement at the same time."

Our thanks to this week’s participants: Cathie Adams, Brandon Aghamalian, Jenny Aghamalian, Victor Alcorta, Clyde Alexander, George Allen, David Anthony, Doc Arnold, Jay Arnold, Louis Bacarisse, Charles Bailey, Dave Beckwith, Andrew Biar, Allen Blakemore, Tom Blanton, Chris Britton, Andy Brown, Jay Brown, David Cabrales, Raif Calvert, Lydia Camarillo, Marc Campos, Thure Cannon, Snapper Carr, William Chapman, Elizabeth Christian, Elna Christopher, Rick Cofer, Harold Cook, Beth Cubriel, Randy Cubriel, Curtis Culwell, Denise Davis, Hector De Leon, June Deadrick, Tom Duffy, David Dunn, Richard Dyer, Jeff Eller, Jack Erskine, John Esparza, Wil Galloway, Neftali Garcia, Norman Garza, Dominic Giarratani, Bruce Gibson, Daniel Gonzalez, John Greytok, Clint Hackney, Anthony Haley, Wayne Hamilton, Bill Hammond, Adam Haynes, Ken Hodges, Laura Huffman, Shanna Igo, Deborah Ingersoll, Cal Jillson, Jason Johnson, Bill Jones, Mark Jones, Robert Jones, Robert Kepple, Richard Khouri, Tom Kleinworth, Ramey Ko, Sandy Kress, Dale Laine, Nick Lampson, Pete Laney, James LeBas, Donald Lee, Luke Legate, Leslie Lemon, Richard Levy, Ruben Longoria, Vilma Luna, Matt Mackowiak, Luke Marchant, Dan McClung, Scott McCown, Robert Miller, Bee Moorhead, Mike Moses, Steve Murdock, Craig Murphy, Keats Norfleet, Pat Nugent, Sylvia Nugent, Nef Partida, Gardner Pate, Robert Peeler, Wayne Pierce, Richard Pineda, Royce Poinsett, Gary Polland, Jay Pritchard, Jay Propes, Bill Ratliff, Tim Reeves, Jason Sabo, Andy Sansom, Jim Sartwelle, Stan Schlueter, Bruce Scott, Robert Scott, Bradford Shields, Christopher Shields, Ed Small, Martha Smiley, Larry Soward, Dennis Speight, Tom Spilman, Bob Strauser, Colin Strother, Sherry Sylvester, Jay Thompson, Russ Tidwell, Trey Trainor, John Weaver, Ware Wendell, Ken Whalen, Darren Whitehurst, Seth Winick, Lee Woods, Peck Young, Angelo Zottarelli.

The Calendar

Saturday, Jan. 19:

  • "Guns Across America" rally, Texas Capitol (noon - 2 p.m.)

Monday, Jan. 21:

  • Inauguration Day

Wednesday, Jan. 23:

  • House back in session at 10 a.m.; Senate at 11 a.m.

The Week in the Rearview Mirror

In a study released by the Texas Freedom Network, a religious watchdog group, some Texas school districts’ high school Bible courses failed to make the grade. The group accused districts of bias toward conservative Protestantism and presenting courses that are weak in their overview and not academically rigorous. The report was also critical of the presentation of Judaism. Texas districts have been allowed to offer Bible courses as electives since 2007, but they’re not required to. 

An annual report that assesses traffic safety laws nationwide ranks Texas in the bottom tier of states. Advocates for Highway and Auto Safety rated states based on 15 traffic safety laws, including seat beat and booster seat requirements, distracted driving laws, restrictions and regulations on teen drivers and tougher drunk driving laws. Texas lacked eight of the 15 laws recommended. The National Highway Traffic Safety Administration reported a 7 percent rise in fatalities in the first nine months of 2012, the biggest increase since 1975. A spokesman for the Texas Department of Transportation who responded to the report cited awareness campaigns conducted by state officials, and a corresponding uptick in the percentage of travelers wearing seat belts.

Freshman Rep. Steve Stockman, R-Houston, weighed in on President Obama’s newly unveiled gun control push, vowing to file impeachment papers if the president tries to issue any executive orders that Stockman feels violate the Second Amendment. Since the Sandy Hook shooting last month, debate has raged about additional regulations on guns.

Since filing in November to run for office in Texas, George P. Bush, son of Jeb and nephew of George W., has raised well over a million dollars for his campaign. Just which office he’s campaigning for is unclear, although he’s traveled extensively across Texas and the nation raising money for his war chest and has expressed interest in the land office. The Bush family got the ball rolling with dad Jeb contributing $50,000 and uncle George matching that. But Bush also got donations from 29 states, and the average donation was more than $3,000. 

The debate over gun violence was front and center in Plano this week, as school officials proposed installing private security guards at all of the district’s campuses. Guards previously patrolled all of Plano’s secondary schools but were eliminated during previous budget cuts. The new proposal would put guards at elementary and secondary schools and had the community buzzing with differing opinions on the idea. Some parents found comfort in the idea, while others expressed dismay at exposing their elementary-age children to armed guards at their schools. Others also expressed concern about the cost, estimated to be $2.7 million.

At the ongoing school finance trial, education economist Eric Hanushek testified that more money in schools doesn’t always translate to improved results. The Stanford-based Hanushek was recruited to testify in the trial by Texans for Real Efficiency and Equity in Education to help make the argument that school funding has led to inefficiencies and is therefore unconstitutional. Hanushek pointed out that districts he analyzed in Texas spent roughly the same amount per student but had varying outcomes. He suggested that teacher performance is the key to improving student performance, and recommended replacing the bottom 5 to 8 percent of teachers, measured by multiple factors, including student achievement on standardized tests.

Political People and their Moves

Robert Jones, after several years heading Annie’s List, joins Be One Texas as CEO, replacing Michael Li, who helped start up the Democratic organization, ran it during the 2012 political cycle, and helped recruit Jones. Jones will oversee Progress Texas, a communications arm of BOT.

Former state Rep. Suzanna Gratia Hupp joins the Texas Health and Human Services Commission to head a cross-agency initiative on veterans’ benefits.

Gov. Rick Perry appointed Carol “Missy” Rainey of Keller to the Texas State Board of Social Worker Examiners. She’s a social worker and assistant court investigator for the Denton County Probate Court.

Perry named Troy Allen of Edcouch, general manager of the Delta Lake Irrigation District, and Lance Neuhaus of Mercedes, president of Neuhaus & Co., to the Rio Grande Regional Water Authority.

Press corps moves: Longtime government reporter Gary Scharrer is now the communications director for Sen. Tommy Williams, leaving his job at Hearst, where he reported for the San Antonio Express-News and the Houston Chronicle. Scharrer was in the Capitol press corps for 26 years and in the newspaper business for 43.

Quotes of the Week

Thinner than my raisin toast: someone who heard from someone. Please. Abbott has made no decisions about 2014, is a close friend and ideological ally of Gov. Perry, and will continue to be.

Eric Bearse, a spokesman for Greg Abbott, describing in the San Antonio Express-News a WFAA-TV report that Abbott is telling supporters he'll run for governor in 2014

Other than education, there's nothing more important than water. Nothing.

Rep. Allan Ritter, R-Nederland, at a TribLive interview

I think he’s going to pay a serious political price. And I think the price that’s going to be paid on this is going to manifest in Senate races in 2014.

U.S. Sen. Ted Cruz to radio host Laura Ingraham on Barack Obama's push for new gun control laws

He’s even using children. It reminds me of Saddam Hussein.

U.S. Rep. Steve Stockman, R-Friendswood, to Fox News' Greta Van Susteren on Obama's push for new gun control laws

The piling on by the political left, and their cohorts in the media, to use the massacre of little children to advance a pre-existing political agenda that would not have saved those children, disgusts me, personally.

Gov. Rick Perry in a statement on Obama's push for new gun control laws

Wanted: Law abiding New York gun owns looking for lower taxes and greater opportunity.

An online ad financed by Attorney General Greg Abbott directed at New Yorkers upset new gun control laws passed in the state

I can no longer in good conscience tell individuals to give any more money to the national or state Republican parties or vote straight Republican.

Ashton Oravetz, chairman of the Smith County Republican Party, announcing his resignation, citing frustration with establishment Republicans