House and Senate Pass State Budget

With three days remaining in the 84th Legislative Session, the House and Senate both passed the Conference Committee Report for House Bill 1 (state budget).  Leaving $6.4 billion unspent in General Revenue ($2.9 billion of this amount is below the spending limit) and $11.1 billion unspent from the Rainy Day Fund, the total state budget All Funds amount is $209.43 billion for the 2016-17 biennium, a 3.6% increase.  The total General Revenue amount is $106.68 billion (including tax relief), a 12% increase.  When excluding tax relief, the biennium to biennium increase in General Revenue was $7.63 billion, or an 8% increase.

The Foundation School Program was increased by $1.5 billion.  This includes $1.2 billion for the Basic Allotment increase to $5,140 for both years of the biennium, $55 million for an additional round of IFA (2017), and $47.5 million for the New IFA program, and $200 million for fractional funding (contingent upon the passage of HB 7).  The non-FSP portion of the TEA budget decreased by about $233 million (mostly due to the state no longer funding the 1.5% TRS-Care contribution for school districts).

The state, using an estimated $5.5 billion offset in GR funding due to local property value growth and increased recapture, was also able to fund approximately $2.7 billion in student enrollment growth and an estimated $860 million for an increase to the Austin yield--$61.86 to $74.28 (2016) and $77.53 (2017)--without any cost to the state. 

The FSP also includes $2.6 billion for franchise tax relief (25% reduction) and $1.2 billion for the increase in the state homestead exemption from $15,000 to $25,000.  The homestead exemption statutory language is in SB 1, which has come out of conference committee. The provision that would allow the funding of the local optional homestead exemption has been stripped from the final bill (an estimated $400 million cost), but the provision that does not allow local entities to repeal or reduce the local exemption for five years (December 2019) remains in place.

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Posted By : Bob Popinski ~ 5/29/2015 3:20 PM
Related Categories: MCA Updates