Projected 2024-25 Texas Budget Surplus Now $32.7 Billion, Comptroller’s Update Estimates

Disbursement of the surplus will be a main task for the Texas Legislature when it convenes for the new session, which begins Tuesday.

BRAD JOHNSON19 HOURS AGO

The historic Texas budget surplus estimate has grown even larger as Comptroller Glenn Hegar announced a $5 billion increase in an updated Biennial Revenue Estimate (BRE) on Monday.

The Texas Legislature convenes for the first day of its 88th Regular Session on Tuesday and now appears to have at its disposal $32.7 billion — a sum that has more than its fair share of stipulations and restrictions. Hegar’s July 2021 projection pegged the number at $27 billion.

“Even with constitutional spending limits and an inflation-influenced new normal, the enormous amount of projected revenue gives the state a remarkable, or a truly ‘once-in-a-lifetime,’ opportunity for historical actions this legislative session,” Hegar said, presenting the BRE Monday.

Tempering reactions, he added, “Don’t count on me announcing another big revenue jump two years from now.”

“The revenue increases that we’ve seen have been in many ways unprecedented and we cannot reasonably expect a repeat. We are unlikely to have an opportunity like this again.”

Overall, the comptroller estimates $188 billion available in general-purpose spending for the 2024-2025 budget, a 26 percent increase from the current biennium. The state will also receive an estimated $176 billion in federal dollars and other revenues that are non-discretionary, earmarked already with specific purposes.

Figures from the Texas Comptroller of Public Accounts

Over half of the general revenue-related funds come from sales taxes and 13.2 percent from oil and gas severance taxes. Due to the high oil and gas prices over the last year, severance tax collections rose 116 percent in 2022; the average annual increase from 1996 to 2021 was just 7.5 percent.

Without new appropriations, Hegar estimates the Economic Stabilization Fund to reach a balance of $27.1 billion, slightly constrained by a constitutional limit.

The ESF’s new estimate is double Hegar’s July projection, a result of the standard transfer to the fund and the projected $11.4 billion unencumbered balance — 50 percent of which must be transferred to the ESF.

Should the Legislature spend a large portion of the unencumbered general revenue balance, the ESF could avoid hitting the cap. Whatever money is left over — not spent or transferred elsewhere — will sit in the state treasury untouched.

“Although no longer accelerating and having moderated somewhat recently, high inflation persists and remains well above the [Federal Reserve’s] policy target,” Hegar’s letter to state officials reads.

Over the last year, Hegar’s maintained the cause of the historic tax collection boon has two prongs: the return of commerce after the pandemic’s economic slowdown and government shutdowns, and inflation driving prices up which increases consumption taxes paid by consumers.

Hegar, like many others, anticipates a coming recession, the severity of which may increase if the Federal Reserve’s interest rate hikes do not corral and lessen the brunt of inflation.

But he maintained, as he has before, that Texas is better prepared than much of the U.S. for weathering a downturn due to the continuous economic growth from businesses and people moving in from elsewhere.

As with all BREs, Hegar said the projection is subject to change as new developments occur.

The comptroller posits that Texas oil and gas producers may benefit if China ceases its lockdowns, resuming standard commercial activity, while Russian production continues to suffer from international sanctions. That would leave a gap for Texas producers to fill, drawn by the potential rise in price of oil and gas.

Hegar’s message is that the state and country’s economic future is relatively uncertain, and that spending the entire unencumbered balance would be both fiscally reckless and difficult if not impossible due to a number of constraints.

To back up his message, Hegar has frequently cited the example of California, which in the last year has gone from an expected slight budget surplus to a projected $24 billion deficit.

The comptroller suggested focusing spending on certain categories: providing a “meaningful” tax cut, continuing border security measures, improving the power grid, expanding broadband connectivity, growing the state’s ports, raising teacher and state employee salaries, and finding a way to generate a skilled workforce.

The Texas Legislature has a lot of decisions on its plate for how to spend this sum of money, along with the spending cap that few have shown a willingness to bust.

In a December press conference, Lt. Governor Dan Patrick both planted his flag against busting the cap and floated an unconventional proposal for approving spending outside of the general revenue cap structure: amending the state constitution.

A similar maneuver occurred in 2013 when the Legislature created the State Water Implementation Fund for Texas, money from which is used to subsidize projects of the State Water Plan.

Property taxes have remained the headliner, drawing all kinds of proposals. One idea multiple sources have told The Texan is a property tax fund that exists for a specified timeframe outside the general revenue fund.

The Legislature already has $3 billion in federal coronavirus aid set aside this session for property tax rate compression — there’s another $1 billion in American Rescue Plan Act dollars floating around available, too.

Texas ports plan a substantial lobbying effort to get a piece of this surplus, and Speaker Dade Phelan (R-Beaumont) has maintained his intention to put a large portion of it toward infrastructure — the cost of which has also grown due to inflation.

There will be many more interests vying for a piece of the pie this go-around, and unlike in years before, the state can’t claim it’s entirely strapped for cash.

Hegar concluded, “As the 88th Legislature opens its Regular Session tomorrow … we know we have a responsibility to ensure every dime we spend is used wisely, prudently, and efficiently to benefit Texans now and in the future.”

The Legislative Budget Board placed the pre-BRE general-revenue spending cap at $12.5 billion more than the last biennial budget.

Alexandra Mealer, Multiple Harris County Republicans File Formal Election Contests

More than a dozen GOP candidates are contesting the 2022 election and accusing the county of suppressing the rights of voters.

HOLLY HANSENJANUARY 6, 2023

The Republican candidate for chief executive of the state’s most populous county and at least a dozen other candidates filed legal challenges to their 2022 election results on Thursday night.

Among the issues cited in the filings are the county’s delayed openings of multiple sites; an Election Day court order to keep polls open an extra hour, later overturned by the Supreme Court of Texas; and a paper ballot shortage that forced multiple polling sites to turn away voters on Election Day.

According to the county’s canvassed results, Republican Alexandra del Moral Mealer lost to incumbent Harris County Judge Lina Hidalgo by just over 18,000 votes out of nearly 1.1 million cast in the 2022 general election.

In a statement announcing her decision to file a formal election contest in state district court, Mealer said her decision was prompted by the recently published report from the county’s Elections Administration Office (EAO).

“After reviewing all publicly available data, I have decided to file an election contest in light of the post-election assessment submitted by Harris County Election Administrator Clifford Tatum,” said Mealer.

The EAO released a preliminary analysis of the 2022 general election last week, acknowledging multiple Election Day problems and noting that 68 precinct judges reported paper ballot shortages. The county said it delivered additional supplies to 61 of those, but does not provide data on the number of sites that turned away voters.

The report also admits that an unspecified number of polling sites were unable to open on time, blaming the problem on malfunctioning equipment, election workers who quit unexpectedly, and the parade celebrating the Houston Astros’ World Series win the day before the election.

“Far from being a ‘success,’ as the report characterizes, there were serious operational issues that occurred throughout Election Day that call into question whether the county’s failures denied voters their right to vote,” said Mealer.

“The report culminates with the ultimate ‘dog ate my homework’ excuse of the World Series parade being responsible for delayed openings and fails to solidify the number of polling stations that suffered from ballot paper shortages.”

Mealer’s filing alleges that Tatum and the EAO “have suppressed the voting rights of a not statistically insignificant number of Harris County residents residing or voting in high Republican turn-out locations, through a variety of unconstitutional, illegal, and negligent schemes resulting in the constructive closing of their polling locations on election day with no redress.”

Additionally, the lawsuit says that officials failed to count legal votes and prevented voters legally entitled to cast ballots from voting or having their ballot counted, leaving the true outcome indeterminable. It then accuses the county of violating the federal Voting Rights Act since some residents had to travel more than 25 miles to vote.

Alleged election improprieties in the county drew attention from Gov. Greg Abbott, and the Harris County District Attorney’s Office is conducting an investigation into multiple criminal complaints in conjunction with the Texas Rangers.

Harris County Attorney Christian Menefee called the filings “nonsensical legal theories.”

“These losing candidates are finally laying bare what we all know to be true — for them, it’s not about improving elections or making sure our elections are secure, it’s about playing games with our democratic systems and refusing to accept the will of the voters,” said Menefee in a statement.

In one of the closest races in the county, Republican Tami Pierce lost to incumbent Democratic Judge DaSean Jones for the 180th District Criminal Court by a mere 449 votes. Pierce’s lawsuit filed Thursday says that extending hours for polling sites without necessary supplies was an “exercise in futility.”

Pierce also pointed to more than 2,000 provisional ballots in her race cast by voters in line after 7:00 p.m. that were not supposed to be included in the official count according to the Supreme Court of Texas. After those are subtracted, Pierce only trails Jones by a mere 89 votes: a 0.0083 percent margin.

State Sen. Paul Bettencourt (R-Houston), former Harris County voter registrar, told The Texan that when a county election administrator “either could not or would not get enough ballot paper to the polls for voters to vote on, that’s real voter suppression.”

“Having thousands of voters turned away from dozens of polls in November because of a lack of paper ballots when the Harris County EAO Warehouse has Millions more truly damages public confidence in the election system.”

Mike May was the first candidate to file a 2022 election contest following his loss to incumbent state Rep. Jon Rosenthal (D-Houston). A few days later, Republican candidate for the 189th District Criminal Court Erin Lunceford formally contested her 0.26 percent loss to Democrat Tamika Craft.

Lunceford’s lawsuit, filed by long-time elections attorney Andy Taylor, cited 19 examples of alleged violations of the Texas election code that would make the true outcome of her race unknown.

In the new spate of election contests, most of the candidates are represented by election litigation attorney Elizabeth Alvarez. Pierce is represented by attorney and former Harris County Republican Party Chair Paul Simpson.

Last month, the Texas Secretary of State’s Forensic Audit Division (FAD) released results of a full forensic audit of Harris County’s 2020 general election, citing “serious breaches,” that included chain of custody issues and violations of state and federal laws. But as election contests must be filed 45 days after canvass, there appears to be no legal remedy for the 2020 candidates.

The state agency also randomly selected Harris County for another round of audits that will encompass all elections since 2020, including the 2022 general election.

Prior to the election, polls had shown the race for Harris County judge in a statistical dead heat, and                                                                                                 Mealer raised a whopping $8 million plus for her campaign. Despite falling short in the county’s reported results, Mealer outperformed statewide Republicans in Harris County with 49.15 percent of the vote.

In her victory speech, Hidalgo warned fellow Democratic officials who she said would not assist her re-election campaign and criticized District Attorney Kim Ogg, a fellow Democrat, for accusing the county of defunding law enforcement.

Earlier this week, Hidalgo made waves after arriving late to a swearing-in ceremony before delivering an impromptu and charged 10-minute speech in which she accused fellow Democratic commissioners of trying to cut her out of the program.

“You will not cut me out, you will not beat me down, you will not tell me to ‘sit down and shut up,’ as Lt. [Gov] Dan Patrick did,” an emotional and defiant Hidalgo shouted.

Hidalgo’s reference to Patrick stems from an incident at a February 2022 funeral for slain Harris County Constable Corporal Charles Galloway at which Hidalgo clashed with Patrick over her placement at the service.

On Wednesday, Hidalgo’s office announced she is now on a personal leave of absence and has gone to Colombia to be with her ill grandfather.

Last year, after three of her staff were indicted on felony charges, Hidalgo publicly stated that she expected to be indicted in relation to an $11 million COVID-19 vaccine outreach contract awarded to a one-woman firm owned by a highly-connected Democratic consultant.

As of Thursday night, 13 Republican candidates in Harris County had filed formal contests, but more are expected on Friday, January 6, the last day under state election code to do so.

Mealer’s lawsuit also requests that the presiding judge of the administrative judicial region assign the case to a special judge, since judges of Harris County’s district courts are disqualified to preside over any territory covered by a contested election.

“Unlike those holding office, I do not have the weight of government behind me to investigate the matters with the gravity and effort that reports of voter suppression justify but I do have the ability to exercise my legal rights as a candidate,” said Mealer.

“My decision to file an election contest is fundamentally about protecting the right to vote in free and fair elections. There aren’t a lot of things that Lina Hidalgo and I agree on but surely we can both agree that it is un-American to suppress votes.

The Texas Legislature Explained in 5 Minutes!

Back to basics.

Learn the ins-and-outs of the Texas legislative process as the 88th session begins. Brandon Waltens brings you a quick and easy to understand video covering all the basics you need to keep up with this year’s brand-new session.

https://youtu.be/OTpsQqBYQnU

GOP Lawmakers Face Growing Pressure to Ban Democrat Chairs

• As lawmakers convene, more grassroots groups are pressing their Republican state representatives to stop giving Democrats powerful committee chairmanships. Erin Anderson reportsconservatives are frustrated by a lack of progress on key reforms.
• Many are upset that Democrats have been allowed to obstruct the legislative process – as they did for several months in 2021 to delay implementation of election security measures – yet continue to be rewarded with committee chairmanships.
• “Why should they be rewarded?” asked Collin County Commissioner Darrell Hale, a member of the Republican Round Table of Collin County. The Round Table sent a letter signed by 277 elected officials and grassroots activists, asking Phelan and area representatives to back a ban on Democrat chairs. They also said last session’s quorum-busting Democrats should be kept out of vice-chair positions.

Texas House Denies Vote on Democrat Committee Chairs

“This is pathetic.”

Despite intense grassroots pressure, the Texas House refused to allow a vote on whether Democrats will be allowed to chair important committees in the Republican-controlled chamber. 

A Republican priority for 2023, banning Democrats from holding key committee chairmanships—which allows them to block conservative legislation—is supported by more than 81 percent of Republican voters. 

State Rep. Bryan Slaton (R–Royse City) proposed changing the rules of the House to disallow minority party members from holding committee chairmanship positions. 

A point of order was immediately raised by State Rep. Charlie Geren (R–Fort Worth), saying Slaton’s proposal violated the purpose of the rules.

That was sustained by newly elected House Speaker Dade Phelan (R–Beaumont), who decreed that House rules “may only be used for public purposes and not political purposes.” 

The argument against Slaton’s amendment rests on the fact that banning Democrats from chairmanships is a GOP priority and “political parties are not public entities but are political instrumentalities.”

“The Republican Speaker is taking the procedural position that restricting chairs to the majority party as every other state and congress does is using state resources for ‘political purposes’ and is illegal. This baseless & absurd ruling was made solely to protect Democrat power,” said Texas GOP Chairman Matt Rinaldi. 

Because of Phelan’s action, Slaton’s amendment was rejected before it went to a vote. 

In the 87th Legislative Session, 40 percent of committee chairs were Democrats, per Phelan’s decision. 

Notably, Phelan immediately moved Tuesday to hold the rules debate the following day, a full day before busloads of Republicans were scheduled to descend on the Capitol to voice their opposition on the issue.

Although Slaton attempted to have the House adjourn until Thursday—allowing Republican voters to attend as planned—Phelan unilaterally blocked Slaton’s motion during Wednesday’s session.

Nevertheless, despite Phelan changing the days, several dozen Republicans in red t-shirts proclaiming “Ban Democrat Chairs!” filled the House gallery, only to be disappointed when the amendment was killed. 

“This is pathetic,” Georgetown Precinct Chair Janine Chapa told Texas Scorecard. 

Although Slaton attempted to refile a similar amendment to ensure Republican chairmanship on key House committees, Geren called a point of order against it as well, claiming Slaton’s amendment would bring forth an issue not currently before the House.

Phelan sustained Geren’s point of order, again denying a floor vote on Slaton’s second effort.

“A lost vote would have caused less backlash,” said Rinaldi. “Shocking because it’s a bad move politically, strategically, legally and kills the aura of the House being governed by rules instead of the whims of a uniparty social club.”

Phelan Rules Gender Issues ‘Political,’ Potentially Blocking Key Legislation

The ruling may signal Phelan’s intent to block debate on issues like child gender mutilation and attendance of children at drag shows.

Katy Drollinger | January 11, 2023

Newly elected Texas House Speaker Dade Phelan (R–Beaumont) signaled he may block all debate on gender-related legislation on the House floor this session, after declaring gender issues to be “political” and ineligible for consideration during a rules debate on Wednesday.

The ruling came during the debate on the House rules; however, Phelan pointed to a housekeeping resolution that passed earlier in the day. The resolution, which passed without significant debate or controversy, codified existing statutory and constitutional prohibitions on using House resources for political campaigns, stating: “A house member, committee, officer, or employee may not use or direct the use of any house resources to further any political purpose.”

When State Rep. Bryan Slaton (R–Royse City) proposed an amendment to change the rules of the House to disallow minority party members from holding committee chairmanships, State Rep. Charlie Geren (R–Fort Worth) called a point of order, alleging that barring Democrat chairs violated the existing prohibition on the use of House resources for political purposes that was codified later.

Phelan sustained Geren’s point of order, blocking Slaton’s amendment before members could vote on it, saying that the House resources “may only be used for public purposes and not political purposes.”

“The amendment would require the speaker to use public resources, including staff time and government facilities, on behalf of one political instrumentality,” said Phelan. “This obviously would require the speaker to violate the Housekeeping Resolution.”

Slaton and State Rep. Tony Tinderholt (R–Arlington) continued offering various amendments to change the House rules, with Democrats repeatedly calling unprecedented points of order that were sustained by Phelan.

One amendment from Tinderholt late in the day called for banning representatives, their staff, and all House employees from including their “preferred gender pronouns” in the signature block of any letters or emails sent while conducting “the legislative business of Texas.”

“In woke corporations and on Twitter, there’s an unhealthy trend of people inserting their preferred pronouns in their bio signatures,” said Tinderholt. “These kinds of games should not be played … and this type of communication should not be occurring at taxpayer expense.”

State Rep. Erin Zwiener (D–Driftwood) called a point of order against Tinderholt’s amendment, citing Phelan’s earlier rulings.

Phelan sustained the Democrat’s objection, referring back to his earlier ruling against Slaton’s amendment calling to ban Democrat committee chairs and declaring that because the amendment addressed a political issue, it was off-limits.

Some are now concerned that this ruling effectively labels gender a political and partisan topic, which would allow Democrats to follow Phelan’s precedent and raise points of order against Republican legislation addressing any issue relating to gender. If that is the case, Republicans can expect Phelan to block debate on priority measures such as a ban on child gender mutilation or the attendance of children at drag shows.

Speaker Phelan on House Rules Fight

BRAD JOHNSON The Texan

 

“Yesterday was the Texas House in all its glory,” Speaker Dade Phelan (R-Beaumont) told a gaggle of reporters on Thursday.

On Wednesday, the Texas House adopted its rules for the 88th Legislative Session without provisions sought by some to ban or restrict Democrats from committee chairmanships.

“I expect vigorous debates on a lot of issues and I’m happy to have those debates,” he added. “We had some yesterday and we’ll continue to have them. That’s why I love the Texas House.”

He was then asked if the point of order — which hinged on a cleverly crafted provision in the housekeeping resolution, adopted before the rules were considered, that prohibited the use of House resources for “political purposes” — saved certain members from “having to take tough votes” on the array of amendments. Of course, it kept them from having to take tough votes otherwise why make the rule. This rule effectively will keep many of the Republican Party of Texas’s agenda voted on at the State Convention in June 2022 from ever seeing the light of day in Democrat Chaired Committees. Bills that are seen controversial by the Speaker are sent to the Democrat Chaired Committees to die that is exactly what happened in the 87^thSession thus all tough votes are eliminated. Republican Legislators must take heed the people give them a majority in the House to get our agenda passed and the Speaker squanders that opportunity. How much longer will people continue to vote for them.

“We’re used to those types, those happen every session,” Phelan said. “I know where my members are on all these issues. The Speaker says he knows where his members are on the issue, but the dirty little secret is that he threatens them with not giving them seats on committees if they don’t vote his way. It’s very public who’s where, so I’m very happy with the way it turned out yesterday. It was a good day for the House.” It was a good day for the Speaker not necessarily for the House or for the people of Texas who vote Republican.

Concerning the practice of minority party chairmanships, Phelan said, “A lot we do in the House is not Republican versus Democrat. It could be rural versus urban.”

“And so, there are some committees that aren’t partisan, I see no reason why I can’t give some of my Democratic colleagues [some of those].”

Texas Freedom Caucus Adds Four Members

The membership of the Texas Freedom Caucus has grown to 12 after four freshman lawmakers joined the group

BRAD JOHNSON The Texan

• Richard Hayes (R-Denton)
• Carrie Isaac (R-Dripping Springs)
• Terri Leo-Wilson (R-Galveston)
• Nate Schatzline (R-Fort Worth)

“We are thrilled to add such a well-rounded group of legislators to the Texas Freedom Caucus as we continue our fight in the Texas House,” stated Freedom Caucus Chairman Rep. Matt Schaefer (R-Tyler).

“Each of these legislators have demonstrated commitment to conservative and liberty-centered values as well as a firm understanding of our mission to provide the Texas grassroots with a voice within the Texas Legislature.”

This new influx gives the group four more members than it had at the start of the 2021 session.

Opinion Provided by Pat Morlan