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Texas proposes $119.7B yearly budget, down 3%

TEXAS STATE CAPITOL, AUSTIN

AUSTIN, Texas — Texas Speaker of the House Dade Phelan today released the following statement on the House’s base budget for the 2022-2023 biennium:

“The Texas House’s base budget prioritizes the needs of Texans during this consequential moment in our state’s history and advances the Legislature’s commitment to the historic public education and school finance and property tax reforms passed last session. The decisions we make during the 87th legislative session will have lasting effects on the future of our state, which is why the House will work to improve our business climate, foster economic prosperity, and do what’s right for our students. I am grateful to the Members of the House Appropriations Committee and the hardworking committee staff for their efforts throughout this process.”

The House base budget recommendations for FY 2022-23 appropriate $119.7 billion in general revenue, a decrease of three (3) percent adjusted for population and inflation. The House budget recommendations are $3.2 billion below the spending limit of 7.06 percent adopted by the Legislative Budget Board in November 2020, and maintain a majority of the five (5) percent reductions identified by state agencies in 2020.

Significant provisions of House base budget recommendations include the following:

• Maintains the Legislature’s commitment to House Bill 3, the school finance reform legislation passed last session, by funding the Foundation School Program (FSP) at $53 billion in all funds and $41.2 billion in general revenue, an increase of $3.8 billion. The House budget adds $3.1 billion in general revenue to fund enrollment growth, an additional $992 million in general revenue for tax compression; and $1.1 billion in general revenue to replace one-time CARES Act funding provided in 2020.

• Provides $5.9 billion in general revenue at the Teachers Retirement System with an increase of $838 million to fund the increased state contribution rate adopted last legislative session.

• Appropriates $74.2 billion in all funds for the Texas Medicaid program, including $27.4 billion in general revenue with an additional $920 million to address projected caseload growth.

• Appropriates $3.3 billion in general revenue for behavioral and mental health services, an increase of $26 million from last session.

• Maintains border security funding across multiple agencies at $800 million in general revenue.

• Does not tap into the state’s Economic Stabilization Fund, more commonly known as the “Rainy Day Fund.”

The Texas Senate has proposed a similar bill, with a $251.2 B budget, but the two houses must hold a conference committee to align the bills and agree on the wording for both.