During the 86th Legislative Session, the Partnership will provide a weekly update on our top executive priorities and other newsworthy items from Austin. 

This was the first full week when both the Senate Finance Committee and the House Appropriations Committee held hearings related to the budgets of state agencies. Specific to the Partnership’s priorities, the Legislative Budget Board, Texas General Land Office, Texas Division of Emergency Management and Texas Education Agency all testified before both committees to discuss current budget proposals and answer legislators' questions about their operations.
 

Property tax reform also drove activity in Austin this week. Senator Paul Bettencourt (R-Houston) and Representative Dustin Burrows (R-Lubbock) filed identical property tax reform bills on Thursday, and Governor Greg Abbott, Lt. Governor Dan Patrick and House Speaker Dennis Bonnen held a joint press conference alongside both bill authors to emphasize their shared commitment to property tax reforms.
 

Next week, Governor Abbott will deliver his State of the State address before the Legislature, where he will announce his emergency items for the 86th Legislative Session. Legislators will have the opportunity then to immediately take up bills on the emergency issues.
 

PARTNERSHIP EXECUTIVE PRIORITIES
SCHOOL FINANCE
The House Public Education Committee, chaired by Representative Dan Huberty (R-Kingwood), met for the first time on Wednesday. Chairman Huberty summarized the recommendations presented to the Legislature by the Texas Commission on Public School Finance. Chairman Huberty, who served as a member of the Commission, was optimistic about the opportunity the committee has to make significant changes to the school finance system for the first time since 1993.
 

The Committee heard testimony from the Texas Education Agency, including Education Commissioner Mike Morath. Testimony began with a broad overview of student performance from Pre-K – 12th grade. The Commissioner specifically mentioned college and career readiness and showed legislators that only one in four high school graduates earn a post-secondary credential within six years of graduation, an outcome that he said is not improving fast enough. Finally, the Commissioner provided a broad overview of the agency’s budget and financial requests related to school districts impacted by Hurricane Harvey.
 

The House Public Education Committee will meet next week to critically examine the school finance system. They will hear from several members of the Texas Commission on Public School Finance regarding the final 35 recommendations that were presented to the Legislature for consideration late last year. The Senate Education Committee, chaired by Senator Larry Taylor (R-Friendswood), has not yet scheduled its first meeting.
 

FLOOD RESILIENCE
Members of the House and Senate are clearly focused on post-Harvey flood related issues, and the Partnership has established a leadership role in disseminating information and data to key legislative offices and agencies. The Partnership is urging the Legislature to consider the following approach related to future flood mitigation:
 

• Establish a state-wide flood mitigation fund administered by the Texas Water Development Board modeled off the successful State Water Implementation Fund for Texas (SWIFT) program.
   
• Appropriate $3 billion from the Economic Stabilization Fund as a roughly 10 percent down payment toward the more than $30 billion needed to make Texas more resilient.
   
• Create a merit-based system for governmental entities to apply for flood mitigation fund dollars based on a number of factors including: eligibility of federal funds, impact on vulnerable populations, readiness for implementation and positive impact on water supply.
   
• Require project implementation to incorporate a regional approach with no harmful effects on residents upstream or downstream.
   
• Make funds eligible to cover local matching requirements to maximize federal contributions.
   
• Provide oversight and advisory provisions similar to SWIFT.

WEEK IN REVIEW
While the Partnership continues to focus on our executive priorities, we are also closely following a number of other issues important to the Houston business community:
 

• Economic Development
  Direct funds for the Texas Enterprise Fund are set to increase from $86 million in the current budget to $111.9 million in the House and $100 million in the Senate. Governor Abbott asked the Senate Finance Committee for an additional $90 million for economic development programs run by the Office of the Governor. Total funds for economic development programs, however, are scheduled to decrease in the coming biennium under the proposed House and Senate budgets. 

   

• Transportation
  Total state and federal funding for TxDOT would be increased by about $754 million in the House budget and $428 million in the Senate budget. The State Highway Fund is expected to receive the maximum transfer of funds from Propositions 1 and 7, amounting to a total appropriation of $9.3 billion.

   

• Health Care
  Total funds for Medicaid are set to increase by $2 billion in both budgets, a three percent increase. Total bond authority for the Cancer Prevention and Research Institute of Texas (CPRIT) is set to decrease by $164 million as bonding authority phases out. The House budget proposes to keep CPRIT at its current $600 million funding level with an infusion of new money, and House Appropriations Chairman John Zerwas (R-Richmond) has filed legislation to extend the program. The current Senate budget does not provide additional funds, but Senate Finance Chairwoman Jane Nelson (R-Flower Mound) has also filed a bill to extend the program.

   

• Environment
  The Texas Emissions Reduction Plan (TERP) to help improve air quality would be cut by about $1.6 million from the current budget of $156.3 million. Because San Antonio and El Paso now qualify for TERP resources, Houston must compete against two cities in addition to Dallas for increasingly scarce funding. Several senators, including Senator Robert Nichols (R-Jacksonville), called for additional funding for TERP.
   

Stay up-to-date with our Policy Team throughout the 86th Legislative Session by opting-in to this weekly update or follow the team on Twitter @GHP_Policy