Texas legislature studies two ways to spend $130 billion

AUSTIN, TX (KCBD) - After a short week involving two brief meetings under the dome and the inauguration ceremonies Tuesday, state lawmakers filed their 2024-25 budget proposals and adjourned for five days.

The 1,033-page budgets are similar in mission but differ in detail on how to spend the state’s historic projected revenue stream and its $33 billion surplus from the last session. Both proposals stop at the constitutional and legislative spending caps of $130.1 billion dollars, leaving more than $50 billion up for grabs in supplementary appropriations bills and other, post-session funding requests.

These state budgets appropriate funding to everything from operating costs for the Texas Bullion Depository to utility costs for different state agencies, from salaries for state-employed workers to IT expenditures, and from public schools to border security.

Buried in the public school financing portion of the budgets is $15 billion in the “Property Tax Relief Fund,” which will go toward limiting how much a school district can charge a homeowner every year. By reducing the “compression” on district’s tax rates, the state will force them to pull less revenue from local taxpayers and will instead subsidize that difference with money from the relief fund.

It is worth noting the House budget proposal would reduce the compression rate by 7.75 percent; for comparison, in 2022-23 the proposal only reduced the compression rate by 0.3 percent. A school finance expert told KCBD this is a good, “aggressive” step in trying to make up for growth in appraisal values, which have gone up in Lubbock about 20% in the past two years. The expert said combining that with an increase in the homestead exemption to $70,000 - which is included in the Senate version but not the House version - would have a respectable chance at reducing the average taxpayer’s obligations each year.

Another less-obvious investment plan for West Texas is the $350 million appropriated in 2024 for rural law enforcement grants. On Tuesday, Lt. Gov. Dan Patrick, who presides over the Senate, promised that investment for sheriff’s offices who are struggling with paying their sheriffs and deputies enough to stay competitive. The budgets set this money aside under the Comptroller’s office, waiting for legislation to determine how to appropriate it later in the session.

The line-item investments for formula funding for Texas Tech did not change much, though some of the Texas Tech System’s schools received marginal changes in their operating budgets. At the same time, the Senate has set aside $2.5 billion to establish what it calls an “endowment” for universities like Texas Tech to utilize as an alternative to the Permanent University Fund, which is reserved for the University of Texas and Texas A&M systems.

The Legislature also intends to invest at least $1 billion in its beleaguered juvenile justice system, which has faced rising criticism over the past year due to reports of inadequate staffing, unsafe and unsanitary living conditions, and poor mental health among detainees. That $1 billion investment would represent a 50% increase in its operating budget from 2022-23.

Now, each budget will go through the typical legislative process, committees, amendments, floor votes, amendments, and passage, before going to what is called a “conference committee,” where representatives from each chamber will hammer out and reconcile the two bills’ differences into a single balanced budget. That is the only legal obligation the Legislature is beholden to before sine die May 29.

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