301.519.9237 exdirector@nesaus.org

LBB documents issued last night appear to hold steady on additional budget cuts for the next two years

By Kimberley Reeves | Quorum Report

New guidance out of the Legislative Budget Board suggests Texas state agency budgets might be able to dodge significant cuts in the 87th session, despite last month’s projected $4.6 billion in revenue losses due to the COVID-19 pandemic.

Comptroller Glenn Hegar in July projected a $4.6 billion shortfall for the 87th, a significant swing from the estimated $3 billion surplus forecast last October.

LBB documents issued last night on legislative appropriation requests, however, appear to hold steady on additional budget cuts for the next two years.

It’s unclear whether federal CARES Act funding will help close the gaps in the Texas budget. Federal law says that money must be spent before the end of the year.

So far, state agencies have carved 5 percent out of their current budgets. State leadership appears to be holding off on additional cuts, for now:

“We appreciate the efforts your entities have made in the current fiscal biennium to minimize spending that did not impact services or necessitate reductions in force when possible,” according to a letter signed by Gov. Greg Abbott, Lieutenant Governor Dan Patrick and Speaker of the House Dennis Bonnen. “All state entities will be required to submit a(n) LAR with a base funding amount equal to your adjusted 2020-2021 base.”

“Some agencies that were exempted from the 5 percent reduction in the 2020-2021 appropriations years will be provided adjusted baseline numbers for purposes of the 2022-2023 LAR. Any request above that base level, including a restoration of reductions, should be included as an exceptional item.”

You can read their letter in full here.

Agency budgets cannot grow, but they also won’t require significant cuts.

This direction from state leadership already is two months beyond recent budget deadlines, which is probably understandable in the midst of economic unrest.

Education Commissioner Mike Morath, meantime, is using CARES Act funding to close budget gaps for schools.

Areas of the Texas budget that remain exempted from cuts include school funding, debt service, pensions, Medicaid, Department of Public Safety and Children’s Protective Services, which has seen a significant bump in funding in recent sessions.