Last Week in the Legislature
Tensions Rising – Budget Debates, School Choice and Property Taxes
By Kenneth Besserman
Director of Government Affairs and Special Counsel
April 14, 2023 | Issue 10
AUSTIN - It’s mid-April and legislative temperatures are rising as the Texas Legislature moves closer to bill passing deadlines and the end of the session. Every day that passes, more and more bills die for lack of momentum or failure to get a hearing, or fail because of lack of interest or forces arrayed against the legislation. This session, the legislature has focused much of its attention on property tax relief, the state budget and budget surplus, power grid reform, and a myriad of social issues.
At the end of last week, the House passed its version of the state budget. Typically, the House debate on the budget is entertaining and lasts long into the evening. This year, the House moved hundreds of amendments into Article XI (placeholder article for contingency items to be discussed in conference committee) preventing debate and hard votes on a number of controversial items.
One amendment did create a lot of debate as it does every session, but this session is of heightened interest. Rep. Abel Herrero has proposed a budget amendment for many sessions that prevents the use of state funds for school vouchers or school choice programs. In past sessions, the amendment has passed with over 100 votes. This session, the amendment passed again by a vote of 86-52, with 11 present not voting. It was a bipartisan vote to support the prohibition against using state funds for private school programs. This places the House in direct opposition to the Senate and the governor in the school choice debate. The Senate passed SB 8 this week, which creates Education Savings Accounts that give parents up to $8,000 per student to use at a school of their choice. The last six weeks of the session will see heated exchanges between both houses and the governor about school choice.
A Tale of Two Budgets
The House budget that passed last week included significant funding for property tax cuts ($17.5 billion), additional school finance ($5 billion) and $4.6 billion for border security. In addition, the supplemental spending bill included $3.5 billion for retired teacher pension increases, a pay raise for teachers, and money for flood mitigation projects and a Texas Semiconductor Innovation Fund.
The Senate budget, which is scheduled for floor debate next week, has some significant differences from the House budget - $650 million for school safety measures, $4.6 billion for border security, $16.5 billion for property tax cuts, $1 billion for water development projects, and $10 billion to address electric grid stability.
Considerable differences between the two budgets remain on school choice and the form of property tax relief – increased homestead exemption vs. limits on tax appraisal increases, border security, and electric grid reform and funding. These differences are significant and should make for some interesting back-room negotiations and heated debate when the budget returns to the chambers for debate in May. As the only bill that is constitutionally required to pass, every other piece of legislation will take a back seat while the budget is hashed out.
In the House State Affairs Committee, Chair Todd Hunter laid out HB 5, which is the legislation that creates a business development/recruitment tool as a replacement to the Chapter 313 legislation that expired in 2022. Chapter 313 agreements have been used by local governments to attract businesses – both large and small – to their communities with property tax abatements in return for job growth and employment opportunities. Chapter 313 agreements have been under the microscope in recent years as either providing too much tax relief to corporations or not providing the job growth that was promised. As HB 5 makes its way through the process, we will be watching and reporting back on how it works and its prospects for passage.
A Matter of Time
Another interesting item passed the House this week. The House voted overwhelmingly – 138-5 – to stay on daylight savings time permanently and not change the clocks twice a year. In past sessions, the legislation has been filed and not made much progress. This year, it has passed the House and now moves to the Senate. Many other states have passed similar bills and last year, the U.S. House passed a similar message but failed to pass the U.S. Senate. Formally, staying on daylight savings time or standard time will require federal legislation, but Texas and other states are sending a strong message to Congress that the time has come to choose one time or another and stick with it.
TXCPA’s priority legislation continues to make progress. House debate on SB 159/HB 797 – 120 hours to sit legislation – is scheduled for floor debate on April 18. Once it passes the House, the legislation will return to the Senate so that the Senate can concur on some minor language changes that have been made in the House. TXCPA has been working with authors Sen. Perry and Rep. Button to get everything aligned for passage soon. All indications are good from both offices and the respective committees.
House Bill 2504 – expansion of the fifth-year scholarship program passed the House Higher Education Committee on Thursday, April 13 and will now head to the House floor. TXCPA is receiving great comments about this legislation and we hope to get it to the Senate in the coming weeks. All signs look favorable for HB 2504 to pass as well.
We are getting close to entering the last month of the session. Enjoy the weirdness to come.