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Conferees struggle toward budget compromise

by | May 14, 2015 | Opinion

By Ed Sterling

For the Texas Legislature to accomplish its main purpose, the passage of a state budget for fiscal years 2016 and 2017 must be achieved.

The five House and five Senate members of the Conference Committee on the budget, House Bill 1, have been working together since late April. They must angle their philosophical pathways to something mutually acceptable to take back to their respective chambers for consideration.

Last week, however, no results-showing HB 1 conference committee report was published, so as yet, there is no document revealing stalemate-breaking agreements on the $211 billion budget. 

Movement on other items, in a bulk sense, has been slow. As of Friday, May 8, only four Senate bills and zero House bills had reached the governor’s desk. House and Senate members filed a total of 6,274 bills in the current session. 

This week, May 11 to 15, constitutionally imposed deadlines take effect, setting the stage for a massive die-off of bills that have not moved well into the process. So far, 1,315 House and Senate bills have progressed beyond the committees in which they originated.

Comptroller pinpoints concerns

With the June 1 end date for the legislative session only weeks away, Texas Comptroller Glenn Hegar, the state’s chief bookkeeper and a former member of the House and the Senate, on May 4 sent a written reminder of his budgetary concerns to Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Joe Straus.

While the focus of budget disagreements between the House and Senate is taxes and where to cut them, Hegar urged attention to a list of long-term balance sheet issues affecting the state’s credit rating and thus the cost of borrowing. Here’s a shortened version of the list:

1. Roads and infrastructure. Additional funds are needed to meet the state’s rapid population growth. 

2. Texas Employees Retirement System pension. The state’s contribution rate is insufficient to amortize the liability in a timely manner.

3. Long-term debt. The state’s general obligation debt has more than doubled from $7 billion in 2010 to $15 billion currently. It must be paid down.

4. Other post-employment benefits. Accrued liabilities to the Teachers Retirement and Employees Retirement systems need to be fund in order to keep them actuarially sound.

5. Texas Tomorrow Fund. Unfunded liabilities are growing for the state’s guaranteed college tuition program.

6. Deferred maintenance. Normal deterioration of state-owned facilities must be addressed because putting off maintenance costs more in the long run.

Senate passes fracking bill

A bill approved by the Senate on May 4 would limit municipalities’ power to ban the hydraulic fracturing of substrata in oil and gas exploration.

Dubbed the “Denton fracking bill,” HB 40 by Sen. Troy Fraser, R-Horseshoe Bay, was filed in response to an ordinance passed by the city of Denton last fall. Fraser, who chairs the Senate Natural Resources and Economic Development Committee, said his bill “would clarify that the state is the ultimate authority when setting policies related to oil and gas exploration.” Fraser added that “cities would still exercise limited regulatory authority on above-ground oil and gas exploration activities, including things like fire and emergency response, noise and light pollution or traffic concerns.”

Sales tax revenue goes up

Comptroller Hegar on May 6 announced state sales tax revenue in April was $2.3 billion, up 1.1 percent compared to April 2014, and April 2015 was the 61st consecutive month of growth in state sales tax collections.

April was “the second consecutive month of relatively slow growth” in sales tax revenue, Hegar said, and the 1.1 percent growth was “muted by the significant slowdown in the oil and gas mining sector.” However, he added, state sales tax collections from retail, wholesale trade, restaurants, construction and manufacturing continue to grow.

Cities, counties, transit systems and special purpose taxing districts will receive May local sales tax allocations totaling $759.8 million, up 6.1 percent compared to May 2014, Hegar said.

Drought conditions persist

Gov. Abbott on May 8 renewed an emergency disaster proclamation certifying that exceptional drought conditions pose a threat of imminent disaster in some 81 specified counties in Texas.

Abbott’s proclamation directs that requests to suspend any rule or regulation that may inhibit or prevent prompt response to the drought be submitted to his office for approval.

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