With oil and gas revenues down, state lawmakers anticipate having less money to spend during the 85th session.

In December, the Legislative Budget Board (LBB) adopted a conservative spending limit, used by the Legislature to craft the budget.  In early January, State Comptroller Glenn Hegar released his biennial revenue estimate, or forecast for expected revenues for the next two years.

Hegar’s forecast said Texas would collect about $104.9 billion over the next two years, which means Texas will have about $104.9 billion in general revenue available for the 2018-19 biennium. The 2017 forecast represents a 2.7 percent decline in available money for the state to spend compared to last session. At the end of the 2018-19 biennium, the state will have about $11 billion in the Rainy Day Fund. However, some state leaders have indicated they do not want to tap the Rainy Day Fund this session. The House leadership might be willing to tap the Rainy Day Fund for critical issues, like public education.

The first week of session, Lt. Governor Dan Patrick said the state’s fiscal crisis required budget cuts in public education and health care, the two largest portions of the state’s budget. The second week of session, on Jan. 17, the House and the Senate filed their base budget bills. The two chambers’ budgets were $5 billion apart and appropriated money differently.

SB 1, the budget bill for this session, will originate in the Senate. The Senate’s base budget spends $103.6 billion. The Senate’s budget does not add money to public education. The Senate’s budget also uses recapture dollars to cover non-educational budget items, a concern for school districts and taxpayers who want those property tax dollars to go to schools only.  Their budget allocates funds to instructional materials, Pre-K, technology-focused early college high schools and K-12 enrollment growth. Learn more about the Senate’s base budget by clicking here.

The House’s base budget spends $108 billion. The House funds K-12 enrollment growth and adds more money to public education, if legislation passes to reduce recapture, equalize funding disparities and increase the state’s share of funding public education. The state’s share of funding schools is expected to drop to 38% in 2019, according to the Legislative Budget Board. The split should be 50-50 between the state and local taxpayers, but the local share is shouldering more of the burden each biennium. The House budget also provides funding for reforming Child Protective Services (CPS).  Details on the House’s proposed budget can be found here.

The House is going to file a school finance bill in early March. The House Public Education Committee will hold two back-to-back hearings on school finance on Feb. 28 and March 7, respectively.

HISD Trustee Rhonda Skillern-Jones testified on behalf of the district’s solution solutions for school finance and explained how recapture affects students in the district.

Both budgets invest in improving digital learning and broadband access, another priority for HISD this session. The Governor’s budget also emphasizes the importance of digital learning and broadband access around the state.

On Pre-K funding, the House, Senate and the Governor’s office all have different funding proposals. The Governor wants to fully fund his high-quality Pre-K grant program at $236 million for the biennium. Last session, the program only received $118 million for one year, including $9 million for HISD. The Senate funds the Governor’s high-quality grant program from last session by appropriating $75 million per year for both years of the 2018-19 biennium and sets aside an additional $15 million in supplemental funding for Pre-K.

The Senate also funds the existing half-day Pre-K program funded by the state.  HISD pays the other half of its full-day Pre-K program. However, an interesting development happened during the week of February 13 when the House adjusted their budget proposal for Pre-K by placing the Governor’s high-quality grant funds in the existing pot for supplemental Pre-K funding. It’s still early in the session, so much could change before the final budget is passed in May.