BUDGET

Three proposed state constitutional amendments on the November ballot would create new property-tax exemptions. All three would subsidize narrow special interests at the expense of state and local revenue that is desperately needed to maintain vital services.

This Policy Page summarizes some of the major funding in the final state budget bill, reporting on state funding for Medicaid programs that is above the levels included in the original filed version of SB 1 (the "base budget" as drafted by the Legislative Budget Board according to the instructions of the Legislature's leadership). For a thumbnail background sketch on Texas Medicaid, see Policy Page 126.

With House-Senate state budget conferees about ready to wrap up work on Senate Bill 1, the Appropriations Act for 2002-03, final funding for child care will soon be known. This Policy Page explains why more state and federal funds for child care are needed to continue serving working poor families, and provides links to proposed legislation that would affect child care in Texas.

The Texas House and Senate have approved their versions of the state budget for 2002 and 2003, setting the stage for conferees to work out major differences in the weeks ahead. One set of issues to be resolved is the use of the Temporary Assistance for Needy Families (TANF) block grant, which will bring at least $973 million in federal funds to Texas in the coming biennium. This Policy Page highlights significant differences in House and Senate proposals affecting TANF spending and the TANF balance that would remain by August 2003.

The Texas Senate voted out an appropriations bill (SB 1) on March 28, 2001, and the House of Representatives voted out their version on April 11. While a number of important questions about Medicaid funding were left unresolved by both houses, each house did recommend some additional state funding for Medicaid, above the levels included in the original filed version of SB 1.

This Policy Page describes how the House and Senate propose to increase economic development program spending in 2002 and 2003 and discusses legislation that would improve the state's funding of development programs by creating an integrated economic development budget.

The current state budget squeeze was fueled in part by tax cuts enacted in 1997 and 1999 (see Policy Page #110). But there are also deeper structural problems with the Texas tax system that keep state and local revenue lagging behind economic growth. If tax revenues had been able to keep up with the growth in personal income since 1994, budget-writers now would have an additional $9.8 billion available to appropriate for the 2002-03 budget. Another $11.2 billion would have been available in 1995-2001.

The House Appropriations and Senate Finance Committees are almost done hearing testimony from state agencies and the public on the introduced version of the biennial budget bill, Senate Bill (SB) 1, which will appropriate funding for all state agencies and programs in fiscal 2002 and 2003. This Policy Page answers some frequently asked questions about state spending and revenue for the next budget cycle.

The primary goal of eligibility policy reform is to minimize barriers for working families and ensure that clients receive the supports necessary to make a successful transition to self-sufficiency. Although early analyses of eligibility streamlining (by the Legislative Budget Board and the Comptroller's office) have proposed significant staff cuts for the Texas Department of Human Services (DHS), the center strongly recommends that these policy changes not be paired with any new reductions in DHS eligibility office staff.

On Tuesday, February 6th, the Texas Department of Protective and Regulatory Services (DPRS) is scheduled to have its budget request heard by the House Appropriations Subcommittee on Health and Human Services. Individuals and groups who are concerned about state funding for child protective services (CPS), foster care, adult protective services, at-risk prevention programs for children and youth, child care regulation, and many other important DPRS programs will have a chance to testify at this hearing. This Policy Page summarizes important recent developments in DPRS funding.

Groups or individuals wanting to testify to the Legislature on Texas state funding for social services: Act now, because this is one of the few chances you will get! House and Senate budget committees in the State Capitol are moving quickly to mark up their respective proposals for state spending in fiscal 2002 and 2003, and the public testimony hearing phase of the proposed state budget bill (SB 1) will most likely be complete by mid-February.

In August 2000, the Texas Department of Human Services (DHS) received $27.9 in enhanced federal funds from the United States Department of Agriculture (USDA) for its success in improving payment accuracy and reducing fraud in the Food Stamp Program in fiscal 1999. An additional $4.9 in unspent enhanced funds received in 1999 is also available for a total of $32.9 million. Last session, the legislature directed DHS to spend $2 million of the enhanced funds received in 1999 on nutrition programs outreach. DHS' proposal to the legislature for spending the $32.9 million does not include any funding for initiatives to improve access to nutrition assistance for low-income families. This Policy Page summarizes DHS' proposal and the center's recommendations for using these funds.

Legislative budget-writers are warning that there will be very little money available for new spending in the state budget currently under consideration in the Capitol. This is a stark contrast to the last two legislative sessions, during which lawmakers competed over who could cut the most taxes. Unsurprisingly, there is a direct connection between the tax-cut fever of the past sessions and the tight budget scenario now. The tax cuts enacted in 1997 and 1999 have reduced the amount of state revenue available to fund the 2002-03 budget by $2.6 billion.