Straus: $202 Billion Budget Plan Reflects Fiscal Discipline

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House Speaker Joe Straus released a two-year, $202.4 billion base 2016-17 budget Thursday that increases spending by 0.2 percent from the current budget and leaves $13 billion in state coffers.

“This plan proves that the Texas House remains serious about fiscal discipline,” Straus said in a statement. “We are able to hold spending in check while addressing some very important challenges related to our rapid growth.”

The proposal tackles several of Straus’ legislative priorities while not addressing other issues drawing significant interest from lawmakers this session, like tax cuts. The base budgets released by the House and Senate each session traditionally serve as starting points in the budget negotiation process.

“We funded the things we knew we had to,” said a House official not authorized to speak on the record about the budget. “We kept it lean, but that was because the speaker wanted to leave it up to the members what else they wanted to do.”

Traditionally, the House appropriations chair releases that chamber's base budget, but Straus has not appointed a successor to Rep. Jim Pitts, who left office after the 2013 legislative session.

Senate Finance Chairwoman Jane Nelson, the Senate's lead budget writer, said she is putting the "finishing touches" on her own base budget but won't release it until after Lt. Gov.-elect Dan Patrick is sworn in Tuesday.

"Because the base bill serves as the opening statement of the Senate's priorities, I feel strongly it should be introduced by the Finance chair appointed by the lieutenant governor who will lead us through this session," Nelson said. "You can rest assured SB 1 will be conservative, meet our needs, strengthen border security, address transportation and achieve significant tax relief."

Straus’ budget increases general revenue, the portion of the budget that lawmakers have the most control over, by 3.9 percent from $95.2 billion to $98.8 billion. General revenue typically makes up around half of the total budget, with much of the remainder coming from federal funding.

House officials said the budget avoids cost increases in part through cuts, but also through some unexpected savings. For instance, the budget spends an additional $1.8 billion in Medicaid, largely to address caseload growth. Officials last session had assumed higher cost increases were coming related to the implementation of the federal Affordable Care Act, according to a House official.

“Some of the effects we thought we’d see from the ACA, if they’re going to materialize, they haven’t materialized as fast as we expected,” the House official said.

Under Straus’ proposal, the state maintains public education at current per-student levels, accounting for expected growth of about 84,000 students annually. House officials said the funding will actually amount to a $2.2 billion increase in school funding because widespread growth in property values is leading to increases in local funding of schools. 

The House budget would put $396.8 million for border security, enough to continue funding of the state's high-profile border surge launched in June. In December, state leaders continued funding the stationing of hundreds of Department of Public Safety officers at the border through August, but wound down funding for the deployment of National Guard troops. Straus’ budget would continue keeping the current level of the DPS officers at the border, House officials said.

One area of likely contention in the budget this session will be whether to fund the public integrity unit, a division of the Travis County district attorney’s office that investigates corruption of public officials.

Gov. Rick Perry vetoed the unit’s funding last session after concerns related to the district attorney’s drunken driving arrest. He is now facing an indictment related to that veto. Straus’ budget would largely restore the state’s funding of the unit at $6.6 million, contingent on the Legislature passing measures “to reform the system of investigating and prosecuting crimes related to state government.”

Straus’ budget allots $62 million for Perry’s two highest-profile economic incentive programs — the Enterprise Fund and the Emerging Technology Fund. The funding is expected to be enough for the programs to address the state’s current obligations but not make additional awards to businesses, House officials said. In light of widespread concerns that oversight of the funds is lacking, the funding for both is contingent on legislation that increases transparency and accountability.

The proposed budget also finds new funding for $1.2 billion in spending that currently is paid out of the gas tax but is not directly related to transportation. Lawmakers have discussed undoing those diversions for years and began to pick away at it last session. Straus’ measure would finish the job, most of that related to funding the Department of Public Safety’s budget out of general revenue.

^{*Editor's note: An earlier version of this story incorrectly stated how much money the House base budget allots for the Enterprise Fund and the Emerging Technology Fund. It also incorrectly stated how much the House base budget estimates the state student population will grow.}