Week of March 27 - April 2, 2017

Senate panel OKs budget for upcoming two-year period
AUSTIN — A state budget for fiscal years 2018-2019 cleared the first in a series of hurdles when the Senate Finance Committee unanimously approved committee substitute Senate Bill 1 on March 22.
The legislation next moves to the full Senate for consideration.
“This budget remains a work in progress, but we will continue our work to make the most of every dollar, meet our priority needs and keep Texas moving in the right direction,” said Senate Finance Committee Chair Jane Nelson, R-Flower Mound. “This committee left no stone unturned looking for savings, examining our budget drivers and looking for ways to make smarter use of our limited resources.”
Nelson said the bill establishes a $106.3 billion two-year state budget. Just a few things the measure would do, if enacted, are:
- Continue the current funding formulas for public education;
- Dedicate approximately $5 billion for transportation, as required by a recent amendment to the state constitution;
- Provide $3.4 billion for Child Protective Services, an increase of $430 million over current levels;
- Add $2.65 billion to cover student enrollment growth, which is projected to be more than 80,000 per year over the next two years;
- Maintain the $800 million earmarked for border security approved by the 2015 Legislature;
- Provide a $780 million commitment for new construction and significant repairs to the state hospital system, plus $145 million for other critical life and safety capital needs at state hospitals and state supported living centers;
- Add $316 million to mitigate a funding shortfall in the Teacher Retirement System; and
- Increase funding for Medicaid to provide caseload growth at fiscal year 2018 levels. The Medicaid budget assumes over $400 million in cost containment initiatives. 
Lt. Gov. Dan Patrick, who presides over the Senate, commended Nelson and her committee for passing the budget bill on a 15-0 bi-partisan vote.
County tops ICE list
The U.S. Department of Homeland Security on March 20 issued its first weekly U.S. Immigration and Customs Enforcement (ICE) Declined Detainer Outcome Report.
The document was produced in accordance with President Donald Trump’s Jan. 25 executive order, which was titled “Enhancing Public Safety in the Interior of the United States.”
Counties that are not cooperating with ICE detainer requests are named in the report, covering the week of Jan. 28 to Feb. 3. Travis County, Texas, tops the list with 142 declined detainer requests.
Gov. Greg Abbott referred to the report as “deeply disturbing” and reiterated his short-list emergency item wish for the Texas Legislature to pass a ban on sanctuary cities.
On Feb. 8, the Texas Senate passed Senate Bill 4, the sanctuary cities measure, on vote of 20-10, with Republicans in favor and Democrats in opposition of the heavily amended legislation. On March 15, the House State Affairs Committee considered SB 4 in a public hearing in which amendments were considered and testimony was given but no vote was taken.
The legislation, if passed by the House and signed into law by the governor, would require sheriff and police departments to detain undocumented arrestees or face criminal penalties and funding cuts.
Franchise tax bill moves
The full Senate on March 21 passed legislation to phase out the state franchise tax over time if sufficient revenue is available. SB 17 now moves to the House for further consideration.
Sen. Jane Nelson, primary author of the bill, said, there is widespread support to eliminate the franchise tax, and that her bill “responsibly phases out the franchise tax while ensuring we retain the revenue necessary to meet the needs of our state.”
SB 17 aims to reduce the franchise tax every biennium if the Texas comptroller certifies that the state will experience at least 5 percent revenue growth. If that occurs, half of general revenue-related funds over the 5 percent growth would be dedicated to reducing the franchise tax rate.
Fiscal challenges detailed
Texas Comptroller Glenn Hegar on March 21 announced the availability of a special edition of his office’s Fiscal Notes publication, highlighting long-term financial obligations facing Texas state government.
Prior to the legislative session, Hegar sent a letter to lawmakers outlining some of these obligations. If left unaddressed, the obligations could negatively impact the state’s credit rating and limit the amount of revenue available for general spending.
The report examines the funding of state employee pensions; TRS-Care, the program that provides health care coverage for retired public school employees and their dependents; the Texas Guaranteed Tuition Plan; and deferred maintenance projects for state buildings.
Fiscal Notes may be accessed by clicking the “See What’s New” tab at Comptroller.Texas.gov.