Comptroller report on state revenues

The big news the first week was Texas Comptroller Susan Combs' release of her official revenue estimate, which showed “that Texas lawmakers, who convene at noon Tuesday, will have $101.4 billion in general revenue to spend in the 2014-15 budget, a 12.4 percent increase over the current two-year budget." That amount would provide sufficient surplus revenue in the current budget to close some sizable holes and also cover the $96 billion that state agencies have said would be necessary to maintain the current level of services for a growing population. Combs also projected the rainy day fund would have $11.8 billion available.

Governor Perry: Despite rosy revenue picture, legislators should hold the line on taxes, spending

But Perry said the lesson since the last Legislature met, amid an “ugly national recession” and gloomy revenue forecasts, is that the 83rd Legislature should maintain the tight-fisted fiscal approach of the 82nd.

He said he has not decided what emergency items he might place before the Legislature early in the session. Perry will deliver his State of the State address Jan. 29.

Water bills filed in house would us $2 billion from Rainy Day Fund to finance state water plan

House Natural Resources Chairman Allan Ritter files HB 4 and 11, says the money would fully implement State Water Plan.

House Bills 4 and 11 would make a one-time allocation of $2 billion from the state's Economic Stabilization Fund, often referred to as the Rainy Day Fund,to capitalize a new, dedicated revolving fund for use in financing water projects in the State Water Plan. The legislation would also lay the groundwork for that fund's management and operation.

Transportation

The Texas Department of Transportation needs an additional $1 billion a year to keep up with maintenance on 80,000 miles of roads in the state, the agency’s executive director said Thursday.

Phil Wilson told a group of officials Thursday that TxDOT also is likely to need an additional $3 billion a year to deal with growing congestion on interstates and other roads. Lawmakers, have already said Texas will need to tackle road financing as the state’s population grows.

Charter schools

Senator Dan Patrick is calling for a complete overhaul of how Texas oversees charter schools while also lifting a cap on how many charters are allowed in the state.

School funding

Board OKs $300 million for schools (it means there will be $300 million more in General Revenue for schools)

The Texas School Land Board has voted 2-1 to release $300 million from the Available School Fund to the state’s public schools.

Texas voters had approved the land board’s authority to transfer the money as part of 2011 constitutional amendment elections.

State Land Commissioner Jerry Patterson is chairman of the School Land Board, which oversees the Texas Available School Fund. The progressive advocacy group Progress Texas said that Patterson had led fellow board members in previously blocking the $300 million.

But during a meeting Tuesday, the board voted to release the funds in two installments, $150 million on Feb. 1 and the rest on June 3.

Senate efforts to change the 2/3 rule dead

A much-talked-about drive by conservative Republicans do away with the Texas Senate’s controversial two-thirds rule evaporated when supporters came up short of votes to pass it. Supporters said the issue, discussed in a closed-door caucus of senators that preceded the Senate coming into public session. There were just eight or nine votes for it, when many more were needed. Rural Republicans in the GOP majority withdrew their support because they realized they will have greater clout if the rule stays in effect, which they will. They point to upcoming votes over water and school vouchers, which could pit urban versus rural interests. The Senate’s 10 Democrats were mostly unanimous in their opposition to keeping the rule, after earlier toying with the idea of supporting the change.

Dan Branch on tax cuts from the house perspective

(Interesting statements from the Chairman of Higher Education in the House on the overall budget)

A key lieutenant for House speaker Joe Straus said that decision makers under the Dome need to do the math on current liabilities and on making proper investments in the government’s core functions before making a headlong dash into tax relief. House Higher Ed Chairman Dan Branch (R-Dallas) doesn’t disagree with Perry on the importance of looking at ways to lessen the tax burden. But, he added, the state needs to look beyond just making taxation and regulation as low as they can be.

“We should always be looking at the tax code and making sure we’ve got reasonable laws related to taxes and whether or not we have opportunities for relief somewhere in there. That’s fine. But, I mean, you’ve got to look at the math,” he said.

He added, “We have done a good job on the spending side. But on the other hand, at some point you could have a state that has light regulation and low taxation but if you can’t turn the lights on, if you don’t have water, if you can’t educate your child… at some point, just having light regulation and low taxation will not keep people coming here.”

Funding liabilities in the Medicaid program should also make the idea of a budget surplus that must be returned to taxpayers less real. Lawmakers will need to come up with $5 billion in March to keep the program funded through the rest of the budget year. And that $5 billion must then be incorporated into the next base budget. Factoring in normal caseload growth, Branch noted that Medicaid will take $11 billion out of any anticipated surplus.

“So there’s not much of a surplus at that point,” he said.

Factor in needs for education and water -- where a major bill was filed in the House today calling for the use of $2 billion from the Rainy Day Fund – “you can get north of $16 billion in terms of the needs,” he said.