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The 85th Texas regular Legislative Session has come to an end, with marked uncertainty about a possible special session. Many legislators called this session unproductive with several priorities unaddressed, including the sunset safety net bill to keep several state agencies open.
Gov. Greg Abbott promised to announce whether he will call lawmakers back to Austin later this week. Only the Texas governor can call a special session, each lasting no more than 30 days.
Budget approved: how the final version addresses our agenda
The state’s $216.8 billion budget for 2018-19 was signed into law over the weekend. Lawmakers proposed using both fiscal strategies debated earlier this session by tapping the Economic Stabilization Fund (“Rainy Day Fund”) for $1 billion and delaying the transfer of $1.8 billion to the State Highway Fund until fiscal year 2019. The final version appropriates $106.7 billion in general revenue funds, $6.4 billion in general revenue-dedicated funds, $71.9 in federal funds and $31.8 billion from other sources. The budget is slightly increased from the 2016-17 appropriations, which totaled $216.4 billion.
Below is a comparison of how the negotiated terms in the final version of the budget address our legislative agenda.
Economic development and workforce
Chamber position: maintain funding for the Texas Enterprise Fund at a level that enables Texas to stay competitive with other states
The Texas Enterprise Fund (TEF) provides the governor with a “deal-closing” incentive to offer businesses who are considering moving their operations to Texas. Economic incentive packages make Texas more competitive and attract new or expanding businesses. The original version of the conference committee’s budget did not support the fund, but Governor Abbott said the final version must include TEF funding. The final budget dedicates $86 million in unexpended funds to TEF during the next biennium, a decrease of $22 million from 2016-17.
Chamber position: continue funding the Governor’s University Research Initiative with broader criteria for qualifying academics
The Governor’s University Research Initiative (GURI) matches incentives packages offered by colleges and universities to attract Nobel Prize laureates and other distinguished researchers. While GURI provides an important way for schools to attract accomplished researchers, the criteria for a “distinguished researcher” restricts schools to academics who have already published their best work. Universities should pursue emerging scientists and engineers as well. The qualifications for eligible scientists were not amended during the 85th session, but the budget includes $15.6 million in additional funds to continue the program with $10 million in new general revenue funds and $5.6 million remaining after last year.
Chamber position: continue funding the Skills Development Fund
The Skills Development Fund provides local customized training opportunities for Texas businesses to increase skill levels and wages in their Texas workforce. The budget allocates $571.8 million to the fund, with much of that in grants provided to community colleges to develop customized training programs specific to business needs.
State colleges and universities will receive $7.2 billion in general revenue funds, a decrease of $2.9 million, and $1.5 billion in dedicated funds, and increase of about $100 million primarily from tuition. The budget boosts formula funding for community colleges with an additional 28.8 million in general revenue funds.
Chamber position: increase funding for the Texas Research Incentive Program and the address the backlog of unmatched fund
The Texas Research Incentive Program (TRIP) matches private donations to public colleges and universities for research funding. Since its creation in 2009, the program has accrued a significant backlog of unmatched funds totaling $141 million. The Senate proposed funding TRIP at $131 million, slightly less than the previous biennium. House members proposed halving the allotment to $64.5 million. The final report allocates only $35 million to the TRIP fund, with no answer to how the growing backlog will be paid.
Chamber position: support the University of Texas at Dallas initiative Engineering for Life as a special item/em>
The state budget includes funding for “special items,” or projects at colleges and universities that fall outside of traditional funding formulas. The Chamber supported the University of Texas at Dallas request for $8 million to expand the Engineering for Life project, which develops innovative medical technology for the healthcare community.
The Senate suggested eliminating special items, while House members proposed reductions to their funding and further study into abolishing them. In the negotiated proposal, $1.1 billion in special item funding given for 2016-17 was replaced by less than $1 billion in “non-formula support items” that do not include Engineering for Life. The budget also dictates that a joint committee must release a study on special item funding during the interim in 2018.
Chamber position: increase formula funding and weights to accurately reflect the cost of public education to meet higher standards
The Foundation School Program, which funds Texas public schools, received $38.1 billion in state funds from general revenue and property tax relief and $42.7 billion in all funds for state aid to school districts and charter schools. Net state funding was increased by $273.6 million, due to an estimated $1.4 billion increase in local property values and a decrease of $1.1 billion in general state revenue funds compared to the 2016-17 biennium. The new budget maintains the basic per-student allotment at $5,140, instead of increasing to $5,340 as proposed by the school finance reform bill HB 21.
Chamber position: provide funding for high-quality, full-day prekindergarten
The final budget diverts $1.58 billion from the Foundation School Program for half-day pre-K programs. The bill requires school districts to use at least 15 percent of this funding, $236 million, to implement high-quality pre-K programs. $1.52 billion in new funds was granted to schools for the 2016-17 school year to account for increased start-up costs and the high-quality standards required of all programs. Texas pre-K programs enroll at-risk three- and four-year-old children who struggle with English or come from an economically disadvantaged background.
Monday, May 29 was the final day for chambers to pass bills and send them to the governor’s desk. Gov. Abbott has until 20 days after the end of the session to sign legislation into law, veto the proposals or allow the bill to become a law without signature.
Senate Bill 4, the sanctuary city law, has been signed into law. The polarizing bill is one of the strictest in the country. SB 4 allows peace officers to question detainees about their immigration status, establishes criminal charges for police chiefs who refuse to comply with deportation officers, and creates fines for cities who fail to cooperate with immigration officials.
House Bill 22, which would overhaul public school districts’ A-F ratings, was approved by both House and Senate after going to conference committee, and so is headed to the governor. In the final version, HB22 would evaluate schools by three criteria: student achievement, such as the number of students taking advanced courses; student progress, including graduation rates; and closing the gaps, with an emphasis in each category on standardized state exams. Each school district will have its own letter grade. State education Commissioner Mike Morath will have the power to approve schools’ own accountability systems, which could account for up to half of the overall grade.
Other accountability bills did not get final passage from the Legislature, including House Bill 515 and House Bill 1500. HB 515 would have reduced state assessments across public school districts, and HB 1500 would have added the percentage of students who earn an associate’s degree to the metrics of public school performance as a fourth domain. House Bill 21 for major school finance reform, including raising the per-student allotment to $5,340, died in conference committee.
Senate Bill 22 for the establishment of Pathways in Technology Early College High School (P-TECH) programs was signed by the governor and will become effective on Sep. 1, 2017. The P-TECH model was developed as a workforce initiative to guide high school students directly into fields that need more qualified applicants, such as science, technology, engineering and technology (STEM) industries. The budget includes $5 million in general revenue funding for the pilot program.
Senate Bill 1318 for the designation of mathematics innovation zones was sent to the governor. SB 1318 encourages the implementation of innovative mathematics programs in public schools.
The margins or franchise tax did not see the significant reductions achieved last session. Senate Bill 17, which proposed to phase out the franchise tax gradually, was passed by the Senate by died in the House committee. The similar House Bill 28 was passed by the House but died in the Senate committee.
Property tax reform, a priority for the lieutenant governor, failed to pass this session. Senate Bill 2, an omnibus property tax reform bill, died in House committee. The House of Representatives amended their own version of property tax transparency reform onto Senate Bill 669, a property tax appraisal bill, but SB 669 also died when House members did not appoint conferees for the conference committee.
Lt. Gov. Patrick’s other major battle, the bathroom bill or women’s privacy act, was passed by the Senate but never referred to a House committee. House Bill 2899, a similar bill to Senate Bill 6 that would have prohibited school districts from enforcing nondiscriminatory laws that cover access to multiple-occupancy restrooms, died in a House committee. Finally, a House floor amendment was added to Senate Bill 2078 that required schools to provide single-stall facilities for students who did not want to use areas designated for their biological sex, but the school safety bill died when the House did not grant the Senate’s request for a conference committee.
House Bill 639 to allow public school districts to purchase insurance coverage for career and technology training programs with immunity was signed by the governor.
House Bill 3593, which would allow school districts to make cybersecurity and computer coding courses eligible for STEM credits, has been signed by both chambers but not sent to the governor.
House Bill 108 for the creation of the Recruit Texas Program was sent to the governor, The bill would support partnerships between businesses and community colleges to train highly skilled hires.
Senate Bill 1782, which would eliminate certain dropped-course and formula funding restrictions on adults returning to complete their degree after a two-year gap, was signed by both chambers and now will head to the governor.
House Bill 2994 was passed by both chambers. HB 2994 would encourage public junior colleges to partner with businesses and high schools to provide workforce training by allowing them to request funding for such programs, as well as tuition waivers for high school students and courses funding by local businesses.
Both chambers approved Senate Bill 2118, which would allow community colleges to offer baccalaureate degree programs in nursing, applied science and applied technology.
Senate Bill 276 was signed by the governor. SB 276 eliminates the 150-student cap on charter school pilot programs, which allow adults to obtain a high school diploma to increase their earning potential and have greater success in the job market. There are hundreds of students currently on the waiting list for this program.
Both chambers sent Senate Bill 1004 to the governor. The proposal would allow wireless network companies to place network nodes, or equipment at a fixed location that enables wireless communication, in a public right-of-way (ROW).
The governor signed Senate Bill 977, which would prohibit the legislature from making appropriations to private or state entities related to the planning, construction, and operation of a privately funded high-speed rail. Texas Central thanked Texas legislators for their support with the bill’s passage, saying they look forward to continuing progress on the project.
Lawmakers will work into the weekend to meet crucial deadlines before the end of the session. Saturday, May 20 is the last day for House committees to report on senate bills and senate joint resolutions. Wednesday, May 24 is the deadline for House members to consider senate bills on third or final reading.
Lieutenant governor threatens special session over Bathroom and Property Tax Bills
Lt. Gov. Dan Patrick threatened to push for a special legislative session this week if House members failed to pass the so-called bathroom bill and the Senate’s property tax reform bill, or similar legislation. Special sessions are held after the regular session has ended, and may only be called by the governor. Gov. Greg Abbott has said that 140 days is plenty of time for lawmakers to do the business the Texas and go home. Lt. Gov. Patrick’s statements come after a letter from Speaker Straus was leaked to the press, in which he says a special session can be avoided if both chambers pass the budget and the sunset safety net bill that approves the continuation of numerous state agencies.
To meet the deadline for Senate Bill 6, the bathroom bill, House Speaker Joe Straus would need to refer the bill to committee and have the committee report on it within the next two days. The House debate on Senate Bill 2, the property tax reform bill, was delayed Thursday due to concerns about parliamentary errors in the bill’s construction or progress that would essentially kill it. It appears that another property tax bill that has already passed the Senate, SB 669, is the new vehicle to attach the provisions of SB 2, and it will be debated in the House on Saturday, May 20.
Wireless coverage expands with public right-of-ways bill
House members gave final passage to Senate Bill 1004 to allow wireless network companies to place network nodes, or equipment at a fixed location that enables wireless communication, in a public right-of-way (ROW). The bill would establish rules, regulations and a fee structure to reimburse cities for the use of a ROW. Cities would retain authority to manage the public ROW to ensure the health, safety, and welfare of the public, and would receive compensation installing network nodes on poles. The legislation is critical to expediting the deployment of 5G wireless technology in Texas, and was supported by Tech Titans. The bill now goes to the Governor for his signature.
Budget negotiators address greater discrepancies
Budget negotiators have been focusing on smaller differences in both chambers’ proposals, but will soon address higher education funding. House Appropriations Committee Chairman John Zerwas (R-Richmond) said that university funding has been placed at the end of the list purposefully, as there remains a “pretty big delta” between the House and Senate versions. House Speaker Joe Straus also noted that negotiations are “going well but far from finished.” Lawmakers may combine strategies of tapping into the $10 billion Rainy Day Fund and deferring payments into the state highway fund.
Workforce bills move forward
Senate Bill 276, which eliminates the 150-student cap on charter school pilot programs, was sent to the governor. The adult high school diploma and industry certification charter school pilot program allows adults to obtain a high school diploma in order to increase their earning potential and have greater success in the job market. There are hundreds of students currently on the waiting list for this program.
House lawmakers passed an amended version of Senate Bill 1782, which would eliminate certain dropped-course and formula funding restrictions on adults returning to complete their degree after a two-year gap. The bill will now be returned to the Senate for approval of the amendment, which specifies how hours may be credited to the student.
The Recruit Texas Act, House Bill 108, was heard and left pending in the Senate Natural Resources and Economic Development Committee. HB 108 is championed by Dallas County Community College District Chancellor Joe May. The Recruit Texas Program would support partnerships between businesses and community colleges to train highly skilled hires.
Senate Bill 1467 by Sen. Royce West (D-Dallas) would establish the Texas Working Off-Campus Reinforcing Knowledge and Skills (WORKS) Internship Program. The bill was approved by House members this week. The WORKS program is designed to create more paid internship opportunities to students with financial needs at Texas colleges and universities. Paid internships were suggested during the interim to help students with educational costs, gain career-related experience, and help position students for post-graduation employment.
The Senate Higher Education Committee favorably reported on House Bill 2994. The bill would encourage public junior colleges to partner with businesses and high schools to provide workforce training by allowing them to request funding for such programs, as well as tuition waivers for high school students and courses funding by local businesses.
Education bills address ratings, computer science courses
House Bill 728, which would allow high school students to count advanced computer science courses toward math or science credits required for graduation, was signed by both House and Senate members this week. The bill will now be sent to the Governor for approval or veto.
The Senate Education Committee debated House Bill 22, school accountability legislation revising A-F district ratings. Lt. Gov. Dan Patrick offered on Wednesday to barter part of HB 22 for House passage of school vouchers, an unlikely scenario. The House version of HB 22 would reduce the role of student performance on state exams in school districts’ A-F ratings and require an individual A-F rating for each domain instead of one overall grade. House lawmakers would not concur with the changes made by the Senate Education committee, who removed provisions that downplayed the role of standardized testing in ratings and gave districts some leniency in choosing alternative indicators of achievement.
Representatives rush to pass lower chamber bills before key deadlines
Crucial deadlines determine the fate of most legislation. House lawmakers have been working late nights to report out House bills from committee and to address legislation on the floor before the end of the week. By midnight today, the House must give final passage to legislation that originated in the lower chamber or the legislation dies, unless the author is able to attach the bill to a similar piece of legislation that has already received approval. The deadline for the House to vote on senate bills is Wednesday, May 24.
Thursday night, the House of Representatives missed a key deadline for an important sunset safety net bill, which would keep a handful of important state agencies open during the next biennium. If the Senate is unable to pass similar legislation, lawmakers may require a special session this summer to ensure those agencies stay open. The only bill mandated by law to pass is the budget.
House committee revises property tax reform bill
The House Ways and Means Committee proposed major changes to Senate Bill 2, the Texas Property Tax Reform and Relief Act. Chair Dennis Bonnen said the new version will provide homeowners transparency rather than lower tax bills, and expressed doubt that the controversial legislation would pass the lower chamber.
Texas cities have widely opposed SB 2 as restricting their ability to provide city services such as first responders. The original Senate bill would decrease the rollback tax rate from 8 percent to 5 percent and trigger automatic tax ratification elections instead of requiring petitions. The House substitute would provide two checks on tax hikes: residents could petition for an election if property taxes rise by 3 percent plus inflation; or, an automatic election will be triggered for increases of 6 percent plus inflation.
School choice provision added to school finance reform
The Senate Education Committee added a school choice provision to major school finance reform legislation, House Bill 21. The substitute would provide $7,000 per year to eligible special needs students. Some public education advocates who supported HB 21 as benefiting public schools testified they had changed their position because of the added provision. The original version of HB 21 would raise the per-student allotment from $5,140 to $5,350, expand the allotment for career and technology programs at high schools, and improve equity among Texas schools by reducing the amount recaptured from certain property-wealthy districts.
Chairman Larry Taylor (R-Friendswood) stated the Senate version would require less funding than the House version, which is estimated to cost $1.6 billion during the next biennium. The Senate budget appropriates less money for public education than the House version. Currently, both chambers are in conference committee to negotiate budget details. The original school voucher bill, Senate Bill 3, has been referred to the House Public Education Committee.
- Governor Greg Abbott signed Senate Bill 4 on Sunday night during a Facebook Live video in an effort to ban sanctuary cities in Texas. The law will go into effect on Sept. 1. The American Civil Liberties Union (ACLU) has issued a travel advisory against Texas for concern that “some law enforcement officers may begin to treat residents and travelers unfairly now.”
- House Bill 2899, an alternative to the unpopular bathroom bill, died after House State Affairs Committee members missed the deadline to approve house bills. HB 2899 now cannot move to the House floor for a vote. Senate Bill 6, the broader legislation championed by Lt. Gov. Dan Patrick, was passed by the Senate but has not been referred to a committee by House Speaker Joe Straus, who opposes the bill.
- House Bill 22 and HB 515 were referred to the Senate Education Committee. HB 22 would reduce the role of student performance on state exams in A-F ratings, decrease the domains used to evaluate school performance from five to three, and require an individual A-F rating for each domain instead of one overall grade. HB 515 would also reduce the number of end-of-course exams required to graduate from high school and eliminate some standardized testing in public schools.
- House Bill 108, the Recruit Texas Act, was passed by the full House on Thursday. The Recruit Texas Program would help employers expanding or relocating to Texas in partnering with junior and technical colleges to train hires.
- The House Higher Education Committee unanimously approved Senate Bill 2118, which would allow community colleges to offer baccalaureate degree programs in nursing, applied science and applied technology.
- House Bill 654, which would eliminate certain dropped-course and formula funding restrictions on adults completing their degrees, was passed by representatives and sent to the Senate.
- House Bill 728, which would allow high school students to count advanced computer science courses toward math or science credits required for graduation, was approved unanimously by the Senate Education Committee and scheduled to for a vote by full Senate vote.
During the final month of the legislative session, members of both chambers are rushing to pass legislation before several approaching deadlines. This Monday, May 8 is the final day for House committees to report House bills. The end of the regular session falls on Monday, May 29.
Bills addressing workforce needs gain momentum
The House Higher Education Committee unanimously approved House Bill 4092, which would allow public junior, or community colleges to offer certain baccalaureate degrees. An identical bill, Senate Bill 2118, was passed by the Senate. Both bills would allow community colleges to provide specific high-need workforce programs in applied science, applied technology and nursing.
House Bill 1127, approved unanimously by the Ways and Means Committee, would also seek increase the pool of skilled workers in Texas. HB 1127 would create a pilot program that provides franchise tax credits to businesses who employ certain apprentices under a registered apprenticeship program. The program would be implemented along the Texas-Mexico border.
Senate Education Committee approves math innovation zones
The Senate Education Committee approved Senate Bill 1318 to encourage the implementation of innovative mathematics programs in public schools. While several alternative mathematics instructional programs have been developed, few schools adopt these programs due to the associated start-up costs. SB 1318 would allow the commissioner of education to designate certain districts as mathematics innovation zones that are eligible for grant funds to integrate innovative math courses. The bill would also allow private investors to finance such programs, where the payments depend on achievement of measurable performance outcomes.
Bills encourage adults to return to college for degree
The House gave preliminary passage on second reading to House Bill 385, which would remove certain formula-funding and dropped-course restrictions that are barriers to non-traditional students and the colleges that educate them. The bill would only apply to students enrolled in competency-based, accelerated baccalaureate programs at public colleges and universities.
A similar bill, House Bill 654, would also eliminate certain dropped-course and formula-funding restrictions on adults returning to complete their degree after a two-year gap. The bill was approved unanimously by the House Higher Education Committee on Monday. The identical bill, Senate Bill 1782 by Sen. Royce West (D-Dallas), was passed by the Senate.
- Senate Bill 4, the sanctuary bill, is headed to the governor for his signature. Governor Greg Abbott tweeted, “I’m getting my signing pen warmed up.”
- House members passed a number of bills related to public education and accountability, including House Bill 22 to overhaul performance criteria for A-F ratings of public schools established two years ago. HB 22 would decrease the role of student performance on state exams and delay further A-F ratings until the 2019-20 school year. The bill would also decrease the domains used to evaluate school performance from five to three. Instead of each school receiving a rating of A-F, each of the three domains used to rank the schools would receive an individual letter. The House also passed House Bill 1500 which would add the percentage of students who earn an associate’s degree to the metrics of public school performance as a fourth domain.
- House Bill 515 was passed by the House to reduce required state assessments, including certain State of Texas Assessments of Academic Readiness (STAAR). In place of social studies exams, high school students need to pass a civics test that contains the same material as the U.S. Citizenship and Immigration Services’ naturalization test.
- House Bill 3593 was passed by the House, which would allow school districts to offer cybersecurity and computer coding classes for STEM course credits.
- The Senate passed Senate Bill 463 to continue the use of individual graduation committees for high school students who have failed one or two end-of-course exams.
- The House passed House Bill 486 to adjust the rollback rate to provide schools with more flexibility in determining their property tax rates. The rollback rate would be either (i) the sum of the highest maintenance and operations tax rate approved by voters since 2007 and the district’s current debt rate, or (ii) the highest tax rate in the past 10 years.
- The Recruit Texas Act, House Bill 108, was approved unanimously by the House Economic and Small Business Committee. The Recruit Texas Program would encourage Texas employers to partner with junior and technical colleges to train hires.
- House Bill 17 received preliminary passage on second reading by the House. The bill would establish the Texas Higher Education Innovation Accelerator to encourage public colleges and universities to develop and submit innovation plans to improve job attainment after graduation.
House approves sanctuary cities bill
At 3 am on Thursday following an emotional debate, House members approved Senate Bill 4 to ban “sanctuary cities”, or communities that prohibit local officials from providing information to federal immigration authorities. The bill subjects sheriffs, constables and police chiefs to a Class A misdemeanor if they fail to cooperate with federal authorities by holding noncitizen inmates subject to deportation. One amendment by Rep. Victoria Neave (D-Dallas) would exempt places of worship from the law. House members also extended the scope of the law by allowing local police officers to question the immigration status of detained persons, instead of requiring a lawful arrest.
Rep. Charlie Geren (R-Fort Worth), who sponsored the bill, argued the law focuses on deporting undocumented immigrants who have committed a crime, and is not about targeting minorities or racial profiling. Rep. Jason Villalba (R-Dallas), voted in favor of the bill, stating it was commonsense policy. Members of the Latino community and House Democrats showed fierce opposition. Several warned that allowing officials to ask individuals about their status amounts to “show me your papers” legislation, and would discourage immigrants from reaching out to authorities for fear of being deported. Representatives who were formerly unauthorized immigrants spoke about their experience growing up in Texas. Rep. Ana Hernandez (D-Houston) spoke of the fear of not knowing if her parents would be deported. Rep. Neave spoke about the vulgar attacks she has received online since announcing her hunger strike in protest of the bill. Opponents also argued that such requirements to comply are unnecessary, as law enforcement already cooperates with federal agents. Rep. Rafael Anchia (D-Dallas) said to the representatives, “If you’ve succeeded in anything, members, you’ve succeeded in terrifying an entire community,” Anchia said. “This feels like a dark day in the House."
The vote came after a federal judge ruled on Tuesday that President Donald Trump exceeded his authority in signing an executive order to withhold federal funds from sanctuary cities, stating only funds related to immigration enforcement may be withheld. Which cities in Texas are sanctuary cities is controversial, but lists often include Dallas, Austin, Houston and communities closer to the border.
House committee considers bills reducing required state exams
On Tuesday, the House Public Education Committee considered several bills aimed at reducing the number and consequences of standardized testing in public schools.
- removing student performance on state exams as a metric of teacher performance;
- reducing the weight of STAAR exams when rating schools and districts, as well as increasing the weight of community factors such as wellness, physical education and community involvement;
- decreasing the number of exams by eliminating writing and social studies assessments;
- limiting exams to those required by the Every Student Succeeds Act, instead of requiring certain coverage of certain courses such as Algebra I; and,
- allowing districts to use national exams as alternative tests with federal approval, and to choose their own test providers with state oversight.
The committee approved House Bill 515, which would establish fewer reductions and revisions in state testing than HB 1333. HB 515 would also reduce the number of end-of-course exams required to graduate from high school and eliminate some standardized testing in earlier grades. HB 515 would further establish an Accelerated Learning Committee for students who fail third, fifth or eighth grade math or reading, and allow those students to take the exams during the following school year.
Opinions on reducing assessment requirements are mixed in the education community. Proponents state that schools waste valuable time preparing for required state exams that could be spent teaching, and that state exams fail to meaningfully reflect a school district’s success or teacher performance. Opponents argue that weakening public school accountability by reducing exams and covered material leads to students being ill-prepared for postsecondary school and skills employment.
Decreasing accountability in schools by allowing students to receive passing grades after failing end-of-course exams, whether by establishing individual graduation committees or reducing testing requirements directly, could derail the state’s 60x30 plan to ensure at least 60% of Texans aged 25-34 will have a certificate or degree by 2030. The strategy also fails to address the gap in skilled applicants decried by employers and investors in Texas, a problem ad
Budget bill moves to House, huge differences in chambers’ proposals
The Senate voted unanimously to send Senate Bill 1, the upper chamber’s appropriations bill, to the House Appropriations Committee, who sent their substituted version for deliberation and amendments by the lower chamber next week. The House budget proposes using $2.5 billion from the Economic Stabilization Fund (ESF), more widely known as the state’s Rainy Day Fund, to balance their version. Senate budgets writers have proposed delaying the transfer of $2.5 billion until fiscal year 2020 from General Revenue, so that the transfer is not part of the 2018-19 budget. House Speaker Joe Straus is in favor of using the ESF, while Lieutenant Governor Dan Patrick has spoken against it. To tap into Texas’ savings, two-thirds of both chambers must approve the withdrawal.
The Senate and House budgets, faced with less money at their discretion than previous years, contain significant differences according to their priorities. In the substituted version, the House committee cuts $1 billion in state funding for Medicaid, the federal-state insurance program that serves children, pregnant women and people with disabilities. With the cut, Texas would lose another $1.4 billion in federal funding. HB 1 would also add $1.5 billion to public schools if House Bill 21, the school finance bill, passes. The Senate’s version would cut $1.8 billion from state education funding, making up the difference with local property taxes and additional revenue. In total, Senate Finance Chair Jane Nelson (R-Flower Mound) stated the budget would increase public school funding by $4.6 billion. The Senate is also pursuing cuts to franchise and property taxes.
Performance-based metrics and tuition freeze bills passed by committee
On Tuesday, the Senate Higher Education Committee approved Senate Bill 543 and Senate Bill 19, limiting tuition increases. SB 19 would freeze tuition rates and student fees for public colleges and universities at 2016-17 levels for four years. Since tuition deregulation in 2003, tuition costs in Texas have soared 147 percent, while the amount spent on instruction has increased only 65 percent. Such costs become prohibitive for young Texans and families at a time when most businesses complain of gaps in the available skilled workforce. SB 543 would require that higher ed institutions meet at least six out of eleven metrics before raising tuition beyond the rate of inflation. The eleven targets include the total number of undergraduate degrees awarded, degrees awarded to at-risk students, the average length of a student’s enrollment and the four-year graduation rate of first-time, full-time undergraduates. If they meet performance standards, the bill would further limit the increase to 3 percent above rate of inflation. Halting tuition growth was one of Lieutenant Governor Dan Patrick’s top priorities this session. Both SB 19 and SB 543 will now be sent to the full Senate for consideration.
Senators pass bills making some government contractors subject to Public Information laws
Senators approved Senate Bills 407 and 408 by Sen. Kirk Watson (D-Austin) on Monday. SB 407 would overturn the Texas Supreme Court case of Boeing v. Paxton, removing an exception to the Public Information Act (PIA) that allows businesses who contract with the state to withhold information that would provide an advantage to a competitor after the governmental body has awarded the contract. SB 408 would overturn Greater Houston Partnership v. Paxton by expending the definition of “governmental body” to include entities that receive funds to perform services traditionally provided by the government. SB 408 would subject businesses and chambers of commerce to the Public Information Act.
Transportation bill targeting high-speed rail, Cotton Belt, leaves committee
Texas metropolitan areas have become the destination for multiple high-speed rail projects in the past decade. The Texas Cotton Belt Corridor, scheduled to begin implementation in 2022, would extend from CityLine through Addison and Carrollton to DFW. Another project, driven by private investor Texas Central Partners, would connect Dallas and Houston by same high-speed bullet train used successfully in Tokyo and Osaka, Japan. Representatives of rural districts have filed numerous bills to derail these plans, particularly the ambitious Dallas-Houston project.
Senate Bill 385 by Sen. Konni Burton (R-Colleyville) would negatively impact these projects by requiring cities who would host the rail to approve the use of federal funds for rail construction by a public vote. At the Transportation Committee meeting, Former Richardson Mayor and current DART board member Gary Slagel testified against SB 385, as well as Mayor of Addison Todd Meier, as causing harm to North Texas cities and economic development by threatening the construction of the Cotton Belt Corridor.
- Senate Bill 3, which establishes a school voucher program for parents from public education funds, was passed by the full Senate on Thursday.
- A substituted version of House Bill 21, the public school finance bill, was approved by a vote of 10-1 in committee and sent to the House. HB 21 would reduce recapture by $400 million over the next biennium.
School voucher legislation leaves Senate committee
On Thursday, the Senate Education Committee approved Senate Bill 3 for the establishment of school voucher programs. SB 3 would create two programs: the Education Savings Account (ESA), a bank account for parents that contains taxpayer money for private school tuition and homeschooling supplies; and the Tax Credit Scholarship (TCS), providing tax credits to businesses that donate for private school tuition. Families earning above 200 percent of the guideline for reduced-price lunches would receive 60 percent of the state’s average expense per student; lower income families would receive 75 percent. The Legislative Budget Board estimated a loss of $90 million to $330 million to Texas in 2019 based on the current proposal.
Supporters, including Rep. Van Taylor (R-Plano) and Sen. Don Huffines (R-Dallas), argued that the ESA would allow parents to personalize their children’s education by providing funds for private education and home-schooling. They also claimed vouchers would hold public schools accountable by allowing parents to transfer out of schools they dislike.
Opponents contend that school voucher programs defund public schools. If five students leave a class for example, the teacher’s salary and maintenance costs would not change, but the school’s funding would decrease significantly. Advocates also warn that voucher programs have not been proven effective, citing studies and pilot programs that have not shown evidence of significantly changing student outcomes. Witnesses said legislators should strive instead to increase funding to public schools for improved quality.
SB 3 will now head to the full Senate, where it is expected to pass. With support from Texas Lieutenant Governor Dan Patrick and others, 31 states are considering related legislation. However, House Public Education Chairman Dan Huberty said last February that school choice legislation has “no path forward” in the House of Representatives.
Workforce development legislation heard in committees
House Bill 108 by Rep. Carol Alvarado (D-Houston), also known as the “Recruit Texas Act,” would establish the Recruit Texas Program to support employers expanding or relating operations in Texas. Businesses would coordinate with junior and technical colleges to train hires. The program would focus on businesses that recruit high-skilled employees. The bill is co-authored by House Economic and Small Business Development Committee Chair Angie Chen Button. HB 108 was left pending in Rep. Button’s committee on Thursday.
House Bill 595 by Rep. Paul Workman (R-Austin), which would provide a franchise tax credit of $1,000 per intern for businesses with an internship program, was also left pending in the House Ways & Means Committee on Wednesday.
Richardson Candidate Forum in April
The Richardson Chamber will host a Mayoral/City Council candidate forum for the contested races in the May election on April 18 at CityLink. This event is open to Chamber members only, and attendees must pre-register online. To register, see the event page.
- The Senate Finance Committee unanimously voted out Senate appropriation bill Senate Bill 1. The appropriations bill is the only bill that Texas legislators must pass before the end of the session. The revised bill provides $106.3 billion in general revenue, an increase of $2.7 billion from the original proposal. Instead of dipping into the Rainy Day Fund as has been proposed by House budget writers and the Speaker, SB 1 delays transfer of $2.5 billion in transportation funding until the next fiscal biennium in September 2019, but includes the funds in the 2017-18 budget. While some have questioned this budgeting maneuver, the full Senate is expected to vote on SB 1 next week.
- On Tuesday, the full Senate passed Senate Bill 2 for property tax rate reduction on third reading with a vote of 18-12. The bill, which would trigger automatic tax ratification elections if local property tax revenue grows by at least five percent, has been sent to the House for review.
- Senate Bill 17 also passed by 23-7 vote and was sent to the House on Tuesday. The proposed version would permanently dedicate half of general revenue funds above five percent growth to franchise tax relief. SB 17 allows for the franchise tax rate to become zero percent, or to be eliminated, if state revenue is sufficient.
- Senate Bill 22 for the establishment of Pathways in Technology Early College High School (P-TECH) was approved by the Senate Education committee unanimously on Monday. SB 1 includes $5 million for P-TECH programs.
- Dozens of businesses and trade and sports organizations have reached out to Texas legislators opposing Senate Bill 6, also known as the Bathroom Bill. Tourism officials have estimated a minimum loss of $407 million in Austin, Dallas, Houston and San Antonio if the bill passes.
Chamber President Bill Sproull discusses March 2017 legislative update
President Bill Sproull talks about movement in the Texas Legislative session. Topics include: budget, the Bathroom Bill, property taxes, franchise fees, and school financing. Click image to view video online.
U.S. Congressman Pete Sessions visits Richardson
On Saturday, U.S. Congressman Pete Sessions (TX-32) will be hosting a town hall meeting in Richardson to discuss important issues facing our communities, state, and nation as a whole. The Congressman will provide a legislative update and discuss his current efforts to reform our nation’s healthcare system, secure the borders, and fuel job creation in Texas. The meeting will be March 18th at 12:30 p.m. in Richardson High School, 1250 Belt Line Road (Beltline & N. Garland).
Senate Finance Committee approves local property tax rate bill after heated hearing
On Tuesday the Senate Finance Committee heard more than six hours of testimony on Senate Bill 2, the property tax reform bill filed by Sen. Paul Bettencourt (R-Houston). Senator Jane Nelson (R-Flower Mound), chair of the Senate Finance Committee, remarked at the meeting, “This is a tough crowd.” Opponents, including Sen. Royce West (D-Dallas), criticized the bill for failing to address significant changes in how the state pays for education. Local governments also condemned the bill as undermining local control and hindering cities’ ability to budget and fund city services such as police and fire departments.
Currently, if property taxes rise more than 8 percent, citizens can petition the city government for an election contesting the increase. As proposed, SB 2 would trigger an automatic election whenever the revenue a city receives from property taxes rises more than 4 percent. The increase does not depend on the set property tax rate; instead, the election could be triggered solely by increased property appraisal values.
At the hearing 34 witnesses registered as supporting SB 2, while nearly 100 individuals and organizations, including Mayor Paul Voelker of Richardson, testified in opposition. The Finance Committee eventually passed an amended version of SB 2 with a 9-to-5 vote. SB 2 will now go to the Senate to be heard.
Senate Finance Committee recommends cuts to university funding in state budget
On Wednesday the Senate Finance Committee voted to redesign university funding so that losses are distributed more evenly among state higher ed institutions. The original budget recommended reductions of more than half among some small Texas colleges and increased funding for larger universities such as Texas A&M. In the adopted version, universities would lose 6 to 10 percent of state funding overall compared to last session.
Part of the decrease results from removing funding for special projects at universities, which accounted for $1.1 billion of higher ed funding in 2015. A portion of those funds, $700 million, would be added back into the schools' formula funding to account for enrollment growth. The House budget includes approximately $1 billion in special items for universities.
The changes were approved unanimously, albeit reluctantly by some senators. "A lot of people are going to be unhappy," said Sen. Larry Taylor (R-Friendswood), chair of the Education Committee and a member of the Higher Education Committee. "No one is going to be ecstatic. But given the numbers we are dealing with, I think we turned out pretty well."
Rep. Angie Chen Button files bills supporting emerging researchers, research commercialization
Rep. Angie Chen Button (R-Richardson) has filed several bills that expand current state economic development incentives to including support for commercialization of intellectual property, leverage private donors for university research, and establish a broader definition of researchers who qualify for matching funds under the Governor's University Research Initiative (GURI).
House Bill 3245 broadens the definition of "distinguished researchers" who qualify for GURI awards, which match funds offered by universities to attract talent. In its current form, GURI narrowly defines distinguished researchers as Nobel Laureates or members of the National Academy of Science, National Academy of Engineering, or National Academy of Medicine. HB 3245 would include recipients with ‘equivalent’ honors, members of ‘equivalent’ honorific organizations or other national societies, and principal investigators (PIs, heads of laboratories) who oversee substantially funding, long-term research projects (i.e., $1 million in annual expenditures for at least three years).
House Bill 3260 would also expand GURI to fund university research with financial support from the private sector. Specifically, HB 3260 would allow GURI to supplement funding for projects aimed at commercialization of intellectual property discovered at that institution. The grant must equal less than half of the total investment in the project, which must be contributed by one or more private entities and the university.
House Bill 3160 would enable the Texas Enterprise Fund (TEF) to support commercialization of property developed by university researchers as well. To qualify, the project must also receive funding from the private sector in addition to their public or private higher ed institution. The award must be less than half of total investment. House Bill 3364, would further allow TEF to reimburse up to 15 percent of expenses related to the grant.
The Texas Economic Development Act (TEDA) allows school districts to offer temporary limitations on property taxes to encourage new investments locally. House Bill 3176 would require members of a school's board of trustees to disclose any conflict of interest with a TEDA applicant, and would prohibit those members from participating in the board's deliberations.
- Senators passed Senate Bill 6, the controversial Bathroom Bill, with a majority vote of 21-10. Two amendments were adopted with the following provisions: private companies that lease public school buildings are not subject to the law; state agencies may not consider a private company's bathroom designations when adopting a contract; and citizens must file an affidavit to complain about violations. The bill will now be referred to a House committee.
- Next Tuesday, the Senate Education Committee will consider Senate Bill 3, which creates a scholarship fund for private school vouchers.
By 6 p.m. tonight (Friday), all House and Senate bills must be filed. A suspension of the rules to obtain permission to introduce the new bill will be required for any future emergency items. While preparing for this deadline, a Senate committee took up the controversial Bathroom Bill, while House Committees heard testimony on a major school finance reform bill and legislation on career & technology courses.
Committee hears testimony on major school finance reform bill
On Monday, House Public Education Committee Chairman Dan Huberty (R-Houston) filed House Bill 21 to introduce major changes to school finance. If no changes are made, the state’s share of public school funding will decrease to 39% in 2019, compared to 49% ten years ago. With top-down reforms requested in the Supreme Court ruling a remote possibility, an increase to the basic allotment has been pursued.
HB 21 would add $1.6 billion during the next biennium; increase the basic allotment by $210 per student from $5,140 to $5,350; roll both high school allotment and additional state aid for non-professional staff into the basic allotment; create new transportation funding for recapture districts; lower recapture by approximately $163 million in 2018 and $192 million in 2019; create a hardship grant capped at $100 million per year to assist districts that will lose funds once the Additional State Aid for Tax Reduction (ASATR) expires; add 0.1 weight for students with dyslexia; and repeal Hold Harmless funding for certain districts, which supplements revenue that is lost when property tax revenue decreases.
Funding for HB 21 is included as a budget rider in the current version of House Bill 1, the House appropriations bill. In its proposed form, HB 21 provides additional funding for 95% of school districts compared to current law. At the committee hearing, the Legislative Budget Board estimated that the bill would increase funding for Richardson ISD maintenance and operations (M&O) by $8 million and for Dallas ISD by $34 million in 2018. After hearing recommendations, Chairman Huberty announced his intention to present a new version of the bill at next week’s hearing on Tuesday, March 14. At that time, HB 21 could be taken up for a vote.
Controversial Bathroom Bill scheduled for Senate floor
Senate Bill 6, as known as the “Bathroom Bill” or “Texas Privacy Act” filed by Sen. Lois Kolkhorst (R-Brenham) and spearheaded by Lieutenant Governor Dan Patrick, was passed out of The Senate State Affairs Committee with a vote of 7-1 after 18 hours of testimony. Sen. Judith Zaffirini was the only dissenter. 1,599 witnesses at the meeting registered opposition, while 241 registered support. The bill now moves for a hearing by the entire Senate floor, which has been scheduled for Monday, March 13. Supporters emphasize that SB 6 would apply to public schools and government facilities, not private businesses, and argue that Texas would suffer no economic consequences. Opponents argue that the bill would devastate the Texas economy and expose public schools, cities and other government entities to litigation and liability, as well as enhance discrimination against the transgender community.
Lieutenant Gov. Patrick said on Tuesday that the Senate, with 20 endorsing senators, is set to take up the bill on Senate. Under Senate rules, 19 senators are needed to bring up a bill before the full Senate for a vote. If a Senate majority passes the bill and SB 6 moves to the House, Speaker Joe Straus stated on Tuesday, “Clearly, I’m not a fan of the bill,” and urged Governor Abbott to weigh in.
Public Ed Committee hears computer science bill, left pending
The House Public Education Committee also discussed House Bill 395 by Rep. Cecil Bell Jr. (R-Magnolia), which would add advanced technology applications to the high school career and technology education allotment for high school students, currently weighted at 1.35 per student. HB 395 would also provide $50 for each student or completes two or more technology applications courses, which include science courses, digital forensics, discrete mathematics and robotics courses. Those in support included our Tech Titans’ partner, CompTIA. There was no opposition. HB 395 was left pending in committee.
The Senate Finance Committee will consider Senate Bill 2 on property tax reform on Tuesday, March 14 at 9 a.m. See the broadcast.
The House Appropriations Committee will consider Article III, funding for public and higher ed in the appropriations bill, on Monday, March 13 at 7:30 a.m. See the broadcast (live, archive).
With only one more week to file bills, the Texas Senate and House of Representatives have filed more than 5,000 bills since last November for this legislative session. This week we catch up with some action in the legislature and find the Richardson Chamber of Commerce delegates in Austin.
Richardson community travels to Austin to learn about and advocate on key legislation, DC is next
The Richardson Chamber partnered with Tech Titans this week to visit the Capitol, meet legislators and hear from policy experts. On Tuesday, delegates met at the Capitol for briefings by experts such as Dale Craymer, President of the Texas Taxpayers & Research Associate, followed by the Delegation Dinner at Carmelo’s with featured speaker Harvey Kronberg of the Quorum Report. On Wednesday, Senator Van Taylor and Representatives Angie Button, Linda Koop and Jeff Leach hosted the Breakfast Reception at the Capitol, followed by briefings on public and higher education, the Texas 60x30 plan, economic development, ethics reform, etc. Our team then met with chairs of committees and other elected officials until the Delegation Lunch featuring Holly Reed of Central Texas Partners on their proposed high speed rail line between Dallas & Houston.
The Chamber’s next legislative trip will be to Washington DC, April 2-5, 2017 for our Federal Policy Conference and Tour.
Ethics reform bill breezes through Senate
Senate Bill 14, the comprehensive ethics reform package by Senator Van Taylor (R-Plano), passed unanimously in the Texas Senate as the first bill the Senate approved this session. Sen. Taylor said, “Historic ethics reform is usually the result of major scandal. Thankfully, that is not the reason we passed SB 14 today. The ethics reform package…is unique in that it was born out of leadership."
- Ejects politicians who have been convicted of a felony from all statewide offices, and further prohibits them from receiving taxpayer-funded pensions in prison;
- Requires elected officials and candidates to disclose government contracts, bond counsel and legal referral fees;
- Reduces the meals-reporting threshold for lobbyists from 60% of per diem ($190) to 30% ($80), requires lobbyists to report spending on immediate family members of legislative or executive branch members, and ends the practice of “ticket splitting,” in which multiple lobbyists collaborate to cover an expenditure above the reporting threshold;
- Prohibits elected officials from registering as lobbyists, establishes a "cooling off" period of one full legislative session (at least 2 years) before members of the Legislature may become lobbyists with a concurrent two-year freeze of their campaign accounts before lobbying.
SB 14 will now be assigned a House Committee to be heard. If the House committee approves, the Texas House of Representatives will be able to vote on the bill.
Establishing P-TECH programs in Texas
Senator Larry Taylor (R-Friendswood) has filed Senate Bill 22 to establish P-TECH programs in Texas in place of the current tech-prep program. The Pathways in Technology Early College High School, or P-TECH model was developed as a workforce initiative to guide high school students directly into fields that need more qualified applicants, such as science, technology, engineering and technology (STEM) industries. An outline of P-TECH includes completion of a high school diploma followed by an Associate degree, postsecondary certificate or industry certification, combined with work-based training that prepares students for their chosen industry. The program can span up to six years so that students are fully equipped for the academic, technical and workplace skills necessary to succeed as an asset to those companies. Currently, Seagoville High School of Dallas ISD has the only pilot class of P-TECH students who began August of last year. SB 22 was heard by the Senate Education committee last week. Rep. Eddie Lucio II (D-Brownsville) filed an identical bill HB 1237, as did Rep. Helen Giddings (D-Dallas) with HB 1842, which was sent to the House Public Education Committee chaired by the house bill’s co-author Rep. Dan Huberty (R-Houston).
Property tax reform bill debate heats up next week in Senate Finance Committee
Lieutenant Governor Dan Patrick has made property tax reform as one of his top priorities, naming Senate Bill 2 the Texas Property Texas Reform and Relief Act of 2017. Currently, taxpayers can petition local governments to “rollback” property tax rates in cities and counties if property tax revenue grows by more than 8% in a given year in those same jurisdictions. Among other effects, SB2 would:
- Lower the rollback tax rate from the current 8% to 4%, and require automatic elections on general election dates for cities and counties to adopt tax rates above 4%;
- Require all appraisal districts to use appraisal manuals issued by the Texas Comptroller;
- Set May 15 as the filing deadline for all property tax protests, establish elected appraisal review board (ARB) panels in large counties to hear more complex protests, and require only a majority (no longer unanimous) vote of ARB panels for binding decisions; and
- Prohibit local governments from challenging the value of an entire class of properties.
Critics argue that lower property tax rollback rates would have major negative impacts on local city and county budgets and services, given Texas population growth. They also argue that school property taxes form the bulk of local property tax rates and that the State has failed to properly finance its share of public education, thus leading to large local property tax bills. They also believe that local tax rates are a matter of local control, and that the bill interferes with this right and tradition. SB 2 was referred to the Senate Finance Committee, where it will be heard next week.
Full-day pre-K for four-year-olds and at-risk toddlers
Sen. Judith Zaffirini (D-Laredo) and Rep. Mary Gonzalez (D-Clint) have filed identical bills to provide free full-day prekindergarten classes for all children at least four years old and expand care to at-risk three-year-old children. Senate Bill 35 has been referred to the Senate Education Committee, and House Bill 196 has been referred to the House Public Education Committee.
Both Senate and House state budget bills in development
Both the House and Senate have released initial budget proposals for the 2018-2019 biennium, House Bill 1 and Senate Bill 1. The House proposal provides for $221.4 billion overall and $108.9 in general revenue (GR) funds, while the Senate recommends $213.4 billion overall and $103.6 billion in GR funds. General revenue (GR) does not include federal funding and dedicated funding required by Texas law. The Senate’s recommendation for GR funding falls just below the Comptroller’s conservative estimate for the next biennium, while the House’s budget exceeds it. Differences in education funding stand out among other variations in their proposals. The House Appropriations Committee recommended $1.5 billion more than the Senate, with additional funding dependent on passing school finance legislation that would increase the state’s share of the Foundation School Program. Both the Senate Finance Committee and House Appropriations Committee will begin making decisions on the elements of HB 1 and SB 1 in the upcoming weeks.