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This week in Texas politics was highlighted by Governor Greg Abbott, Lieutenant Governor Dan Patrick, and Speaker of the House Dennis Bonnen’s unveiling of a united proposal to curb property tax growth on Thursday. The proposal, which has been introduced in both the House and the Senate, caps the annual growth of local property taxes from 8% to 2.5%. Under the new legislation, if local government entities – such as counties, cities, and school districts – wish to exceed the cap, they must first get voter approval through what’s called a rollback election. With property taxes high on the agenda, this legislation is expected to be center stage for this legislative session. To learn more about the property tax bill, please click here.

 

As leadership introduced their flagship legislation, the legislature continued its efforts in committee hearings throughout the week. Alongside the Senate Finance and House Appropriations Committees, which have already begun hearings for the session, the House Natural Resources and House Public Education Committees all held their first hearings of the session.

 

This Tuesday, two special elections took place to fill vacant seats in the Texas House. In House District 79 (El Paso), Democrat Art Fierro won 53% of the vote in a three-way race to replace former state Rep. Joe Pickett, who stepped down due to heath issues. Representative Fierro will finish Pickett’s term through January 2021. In House District 145 (Houston) – formerly held by now State Senator Carol Alvarado – two Democrats, Christina Morales (35.78%) and Melissa Noriega (31.12%), earned enough votes to enter into a runoff election that is to be scheduled. This runoff is not the only remaining special election; on February 12, there will be another to replace former state Rep. Justin Rodriguez (D-San Antonio), who is now a commissioner in Bexar County.

 

Finally, preparations are underway for Governor Abbott to give his State of the State address next Tuesday, February 5^th. During the speech, the Governor will outline his priorities for the 86^th legislative session, as well as any emergency items he wishes to address. Expected topics include curbing property taxes, improving education financing, and increasing teacher pay.

Committee Hearing Highlights

House Appropriations Committee Hearings on HB 1

The House Appropriations Committee met Monday, January 28, 2019, to discuss various topics, including: Comptroller's Biennial Review Estimates (BREs), The Economic Stabilization Fund (ESF), Texas Constitutional Spending Limits, State Debt, House Budget recommendations, and the costs of the ongoing Hurricane Harvey Recovery. Texas Comptroller Glenn Hegar testified before the committee on the BRE and ESF. During his testimony, Comptroller Hegar reaffirmed the estimate of $119.12 billion to be available for general revenue spending in the coming biennium. Comptroller Hegar also spoke to future revenue earnings, which he expects to grow more moderately, due to economic obstacles including falling oil prices, rising interest rates, trade tensions, and slowing global economic expansion. Additionally, Comptroller Hegar confirmed initial estimates projecting the ESF to grow to $15.4 billion by the end of the next biennium, the largest in the fund’s history. Senior Analyst Stuart Shallow of the Legislative Budget Board (LBB) spoke on the four spending limits outlined by the Texas State Constitution, and confirmed that the House’s budget bill, HB1, fell within all four of these limitations. LBB Analyst Louellen Lowe testified to Texas debt outstanding, which totals to $271 billion, $49.1 billion of which has been issued by the state.

 

Sarah Keyton, Assistant Director of the LBB, provided a general overview of the funds for the House budget bill, HB1, which includes $247 billion in spending, a %4.7 increase over the past biennium. Questioning during the course of Mrs. Keyton’s testimony included the topic of increased funding for the Teacher Retirement System, specifically to address increasing healthcare costs. Finally, Nim Kidd Chief of Texas Division of Emergency Management, and Billy Hamilton with the Rebuild Texas Commission testified about the ongoing costs of Hurricane Harvey. Thus far, state government losses relate to Harvey have cost $3.235 billion from Fall 2017 – 2019, with projected costs of $2.963 billion for FY2019. The mass majority of these costs have been covered with federal funds but Mr. Kidd warned that federal administrators in FEMA have begun to question 'why does the Federal Government continue to pay for local and state government damages to local and state government property?'

 

LBB Documents can be found here

 

Video of testimony can be found here

Wednesday morning, the Committee discussed funding recommendations for public education, Medicaid, mental health services, school safety, border security, and transportation. There was discussion over the ever-present fluctuation between caseload and cost that affects Medicaid funding. Furthermore, the Committee expressed a priority for mental health due to prominent school shootings like Sandy Hook. Firstly, Mike Diehl of the Legislative Budget Board (LBB) gave an overview of Medicaid funding. He defined the Medicaid program and how changes like population growth and economic fluctuations impacting funding. He also highlighted the increase of children in the Medicaid full-benefit caseload from 69.7% in FY 2006 to a projected 74% in FY 2021. LBB also noted the significant increase in the Managed Care Model over the same time period.

Mr. Diehl reported funding for Medicaid at $67.6 billion in All Funds and $25.2 billion in General Revenue which is an increase of $2 billion in All Funds. An important discussion transpired between Rep. Davis and Rep. Howard over the increase in Medicaid caseload. Rep. Howard first made the distinction between funding caseload growth and funding cost growth. The LBB confirmed that the bill only reflects caseload growth rather than cost growth. Rep. Davis reminded the Committee that the Legislature does not fund cost growth. This concluded the discussion on Medicaid.

 

Samantha Brock then presented the funding recommendations for mental and behavioral health services. HB 1 provides $4. Billion in All Funds and $3 billion in General Revenue and General Revenue—Dedicated for non-Medicaid/CHIP behavioral health services across 23 agencies. The total behavioral-health related funding, including Medicaid and CHIP expenditures, is estimated to be $7.5 billion in All Funds. Ms. Brock noted that HB 1 provides new behavioral health funding in the 2020-2021 biennium for certain Article III agencies. HHSC has submitted exceptional items for continued construction and improvements at the state hospitals for the 2020-2021 biennium. Chairman Zerwas highlighted the tremendous need for these exceptional items to improve these facilities. Chairman Zerwas also noted the desire to increase funding since the 2011 session especially on the heels of Sandy Hook, Santa Fe and the Sutherland Church shootings. This concluded the discussion on statewide behavioral health services.

Tedd Holladay with the LBB testified specifically on the money set aside for school safety funding within H.B.1, which includes $109.4 million in additional funds. This includes $54.5 million in the Safe and Healthy Schools Initiative, which covers mental health, emergency response programs, positive school culture efforts, facility and infrastructure improvements. Specifically, this includes $5.0 million for pilot grants for innovative school health and safety programs and $10.0 million for matching grants to school districts and charters for facility hardening.
 

LBB Documents on Medicaid

 

LBB Documents on Statewide Behavioral Health Services

LBB Documents on School Safety  

Bill Tracking Report Bill tracking reflects bills filed and tracked through noon on Friday, February 1, 2019

 

BILL AUTHOR RELATING TO LAST ACTION DATE HB 1080 White, James Relating to prior authorization procedures for physical therapy services in Medicaid and the child health plan program. Filed 1/25/19 HB 1082 Raymond, Richard Relating to the form of certain advance directives. Filed 1/25/19 HB 1103 Price, Four Relating to the composition of the statewide health coordinating council. Filed 1/25/19 HB 1110 Davis, Sarah Relating to the Medicaid eligibility of certain women after a pregnancy. Filed 1/28/19 HB 1146 Howard, Donna Relating to workplace violence prevention in certain health care facilities. Filed 1/28/19 HB 1156 Collier, Nicole Relating to the provision and use of health coverage information to educate consumers purchasing individual health benefit coverage. Filed 1/29/19 HB 1179 Beckley, Michelle (F) Relating to a Medicaid buy-in program for Medicaid recipients with increased household income from employment. Filed 1/29/19 SB  524 Johnson, Nathan (F) Relating to the expansion of eligibility for Medicaid to certain persons under the federal Patient Protection and Affordable Care Act. Filed 1/30/19 SJR  34 Johnson, Nathan (F) Proposing a constitutional amendment requiring the state to expand eligibility for Medicaid to certain persons under the federal Patient Protection and Affordable Care Act. Filed 1/30/19 HB 1210 Beckley, Michelle (F) Relating to the expansion of eligibility for Medicaid in certain counties. Filed 1/30/19 HB 1258 Craddick, Tom Relating to credit services organizations and extensions of consumer credit facilitated by credit services organizations. Filed 1/31/19 HB 1273 Zedler, Bill Relating to denial of payment for preauthorized health care services. Filed 1/31/19 SJR   5 Menendez, Jose Proposing a constitutional amendment establishing an increased minimum wage. Introduced and referred to committee on Senate Natural Resources and Economic Develop 2/1/19 SB   82 Hall, Bob Relating to expenditures for lobbying activities made by a recipient of state funds. Introduced and referred to committee on Senate State Affairs 2/1/19 SB  113 Menendez, Jose Relating to minimum wage. Introduced and referred to committee on Senate Natural Resources and Economic Develop 2/1/19 SB  147 Rodriguez, Jose Relating to the Medicaid eligibility of certain women after a pregnancy. Introduced and referred to committee on Senate Health and Human Services 2/1/19 SB  197 Schwertner, Charles Relating to requiring state contractors to participate in the federal elctronic verification of employment authorization program, or E-verify. Introduced and referred to committee on Senate Business and Commerce 2/1/19 SB    1 Nelson, Jane General Appropriations Bill. Meeting set for 9:00 A.M., E1.036 - Senate Finance 2/12/19