AUSTIN — The Legislature sent Gov. Greg Abbott a new state budget late Saturday.
Mostly, it redeems the governor’s promise to cut taxes. However, the budget merely preserves funds for another Abbott pledge — school choice — though it doesn’t actually deliver it.
Abbott and Lt. Gov. Dan Patrick’s high-profile quest this session to secure taxpayer funds that families can use for private schooling ran up against a wall of opposition in the House.
But if Texas’ top two Republican state leaders couldn’t pass education savings accounts, they used the budget to take some hostages — higher teacher pay and increased funding of public schools.
The two-year budget easily cleared the two chambers. On Friday, the Senate blessed it, 29-2. The House followed suit late Saturday, 124-22.
“Our budget will secure Texas’ conservative future,” Patrick said in a written statement.
It’s the biggest budget ever.
The new budget eclipses $300 billion for the first time.
If Abbott approves, it would spend $321.3 billion, including non-tax revenues and federal funds.
In 2021, lawmakers passed a budget that spent $297.2 billion, according to the Legislative Budget Board.
The deal Senate and House negotiators hammered out “makes historic investments that will have a lasting impact on the state,” said House Appropriations Committee Chairman Greg Bonnen, R-Friendswood.
He ticked off the $12.3 billion in new property tax cuts, in addition to $5.3 billion to pay for ones required by a 2019 law.
Bonnen boasted of the budget’s $9.4 billion for mental health and $1 billion for a proposed water fund designed to fix leaking pipes and build new supplies.
Under questioning from Panhandle GOP Rep. Ken King, he acknowledged that a House-approved plan to spend $6 billion on teacher pay and school-formula increases shrank in the final product to $3.9 billion.
A sheepish Bonnen pointed to the $5 billion on broadband and $3 billion on a new university fund that the House wanted and to Patrick’s demand for $5 billion for new electricity generators.
“As we started to add the total amount, we had to make adjustments,” he said.
It also leaves unspent the most ever.
Lawmakers could have spent tens of billions more.
A 1940s “pay as you go” limit hinders them from spending more money than Comptroller Glenn Hegar thinks will be there.
The deal approved leaves a cushion under that cap of $10.7 billion of general revenue, the board says.
“We took caution to ensure that this budget is sustainable in future years, which is why we are choosing not to spend all the money we have … to ensure we can tackle future needs,” said Houston GOP Sen. Joan Huffman, the Senate’s top budget writer.
“And that is on top of the money that is in the Economic Stabilization Fund,” Huffman said, referring to oil and gas taxes steadily pooling in a rainy day fund. By the end of the next cycle, it will have $27.1 billion, Hegar has said.
Patrick forbade any use of it, even though much of the spending is for tax relief.
How much? It’s $17.6 billion, Huffman and Bonnen said. Under that interpretation, Abbott can say he met his August campaign pledge to spend at least half of a record-breaking $32.7 billion revenue surplus on cutting property taxes.
Teacher pay is – stuck.
The chambers’ initial budgets had $5 billion of new money for public schools. Teacher pay increases were cited as one of the likely uses.
Even if separate bills on teacher pay and ESAs die, the money’s available, Huffman told Sen. Royce West, D-Dallas.
“It could happen in a special session, as we all know,” she said.
Abbott has threatened to call lawmakers back for a special session if they did not approve a school choice program.
West asked, “Is it specifically earmarked for a teacher pay raise or just, it’d be there in general?”
Huffman replied, “It’s in a category that they could use it for teacher pay raise.”
In the House, King noted that in April, members voted 86-52 to bar any use of appropriated funds for vouchers or ESAs.
Bonnen acknowledged the Senate forced removal of the provision.
King noted that in the final budget, $500 million is set aside for school choice as “a contingency.”
If lawmakers ultimately reject ESAs, the money doesn’t have to be spent that way, he said.
“We can pay our teachers without creating ESAs?” King asked.
“That is technically a possibility,” the chairman responded. “You’d have to get the votes to do that.”