Legislative Budget Board Fiscal Size-Up
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LEGISLATIVE BUDGET BOARD FISCAL SIZE-UP 2012–13 BIENNIUM SUBMITTED TO THE 82ND TEXAS LEGISLATURE JANUARY 2012 PREPARED BY LEGISLATIVE BUDGET BOARD STAFF COVER PHOTO COURTESY OF HOUSE PHOTOGRAPHY LEGISLATIVE BUDGET BOARD EIGHTY-SECOND TEXAS LEGISLATURE DAVID DEWHURST, CO-CHAIR Lieutenant Governor, Austin JOE STRAUS, CO-CHAIR Representative District 121, San Antonio Speaker of the House of Representatives STEVE OGDEN Senatorial District 5, Bryan Chair, Senate Committee on Finance ROBERT DUNCAN Senatorial District 28, Lubbock JUAN “CHUY” HINOJOSA Senatorial District 20, McAllen JUDITH ZAFFIRINI Senatorial District 21, Laredo JIM PITTS Representative District 10, Waxahachie Chair, House Committee on Appropriations HARVEY HILDERBRAN Representative District 53, Kerrville Chair, House Committee on Ways and Means DAN BRANCH Representative District 108, Dallas SYLVESTER TURNER Representative District 139, Houston FISCAL SIZE-UP: 2012–13 BIENNIUM January 2012 Fiscal Size-up is a report produced biennially by the staff of the Legislative Budget Board. Production of this report involves thousands of staff hours. Th e 2012–13 edition, like previous editions, contains a wealth of information about the structure and operation of Texas state government. Th rough its comprehensive descriptions of state programs and services, including more than 360 fi gures, the 2012–13 Fiscal Size-up provides Texas taxpayers with a more complete understanding of how their tax dollars are being used. Th e fi rst three chapters of Fiscal Size-up include an overview of the 2012–13 state budget (including a summary of the fi scal challenge the Eighty-second Legislature addressed), a description of the major state revenue sources and funds, the economic outlook for Texas and the U.S., and detailed information on population, income, taxes, governmental expenditures, and employment for Texas and other states. Th e remaining chapters of Fiscal Size-up provide an in-depth examination of the major functions of state government and discuss the signifi cant budget issues, programs, and activities of the agencies and institutions that support each function. Appendices A–C contain a listing of state agencies, institutions, and other budgetary units by function as well as a summary of their estimated expenditures for the 2010–11 biennium and legislative appropriations for the 2012–13 biennium (in both annual and biennial amounts). Appendices D–G list the members of the House Committee on Appropriations, the Senate Committee on Finance, the staff of the Legislative Budget Board, and abbreviations and acronyms used in the 2012–13 Fiscal Size-up. Along with other Legislative Budget Board publications and reports, the 2012–13 Fiscal Size-up is available on the Legislative Budget Board’s website (http://www.lbb.state.tx.us). I want to express my gratitude to the staff of the Legislative Budget Board and to the many state agency offi cials and staff who provided the information necessary to compile this report. Th e interpretation and presentation of this information is solely the responsibility of the Legislative Budget Board staff . Th is publication is dedicated to the memory of Val Shepperd, a Legislative Budget Board colleague. John O’Brien Director CONTENTS LEGISLATIVE BUDGET BOARD MEMBERS Figure 12. Restricted Appropriations from General Revenue Funds and General Revenue–Dedicated INTRODUCTION Funds Budget, 2012–13 Biennium ......................10 1. STATE BUDGET OVERVIEW ........................1 Federal Funds Budget ................................. 11 2012–13 BIENNIAL BUDGET ............................ 1 Figure 13. Federal Funds, 2012–13 Biennium .....11 Figure 1. All Funds Budget, by Fund Source Figure 14. Federal Funds – Statewide Summary, 2010–11 and 2012–13 Biennia .............................1 2010–11 and 2012–13 Biennia ...........................11 BUDGETARY IMPACT OF Figure 15. Federal Funds – Statewide Summary, AVAILABLE REVENUE .......................................2 American Recovery and Reinvestment Act of 2009 ................................................................12 Figure 2. Estimated and Actual Receipts of New Revenue to Cover Property Tax Relief, Other Funds Budget .................................... 13 2008–09 Biennium ...............................................2 Figure 16. Other Funds, 2012–13 Biennium .......13 Actions Taken to Address the Shortfall .........3 Figure 17. Other Funds – Statewide Summary, 2010–11 and 2012–13 Biennia ...........................13 Figure 3. Legislative Response to Fiscal Challenge: 2011 Legislative Session .........................................3 BUDGET ALLOCATION ...................................14 Recent Trends and Fiscal Horizon .................5 Figure 18. Comparison of All Funds Budget Allocation 2002–03 and 2012–13 Biennia ..........14 All Funds Budget ........................................... 6 Figure 19. Comparison of All Funds Budget Figure 4. All Funds, 2012–13 Biennium ................6 Allocation Percentages, 2002–03 and 2012–13 Figure 5. All Funds – Statewide Summary, Biennia ................................................................14 2010–11 and 2012–13 Biennia .............................6 CONSTITUTIONAL SPENDING LIMITS ............ 14 General Revenue Funds Budget ....................7 The “Pay-As-You-Go” Limit ....................... 14 Figure 6. General Revenue Funds, 2012–13 Biennium ...............................................7 Limitation on the Growth of Certain Figure 7. General Revenue Funds – Statewide Appropriations ...........................................15 Summary, 2010–11 and 2012–13 Biennia.............7 Welfare Spending Limit ...............................15 General Revenue–Dedicated Funds Budget ..8 Debt Limit ...................................................15 Figure 8. General Revenue–Dedicated Funds, Figure 20. Constitutional Debt Limit, Fiscal Years 2012–13 Biennium ...............................................8 2002 to 2011 .......................................................15 Figure 9. General Revenue–Dedicated Funds – Statewide Summary, 2010–11 and 2012–13 TRENDS IN STATE GOVERNMENT Biennia ..................................................................8 EXPENDITURES ............................................... 16 Figure 10. General Revenue–Dedicated Fund Figure 21. Trends in State Government Balances Available for Certifi cation Expenditures, 1992–93 to 2012–13 Biennia .......16 2002–03 to 2012–13 Biennia ................................9 Figure 22. Trends in State Government Figure 11. Restricted Appropriations from General Expenditures, 1992–93 to 2012–13 Biennia .......17 Revenue Funds and General Revenue–Dedicated Funds Budget, 2012–13 Biennium ........................9 LEGISLATIVE BUDGET BOARD FISCAL SIZE-UP 2012–13 i CONTENTS TRENDS IN STATE HEALTHCARE 2. REVENUE SOURCES AND ECONOMIC EXPENDITURES ............................................... 17 OUTLOOK ............................................27 Figure 23. Healthcare Expenditures, Fiscal Years STATE REVENUE ............................................. 27 2000 to 2013 .......................................................18 Figure 37. State Revenue Biennial Comparison, by Figure 24. Healthcare Expenditures as a Source, 2010–11 and 2012–13 Biennia ...............27 Percentage of General Revenue Funds and Figure 38. State Revenue by Source, Fiscal Years General Revenue–Dedicated Funds, 2009 to 2013 .......................................................28 2000–01 to 2012–13 Biennia ..............................18 Figure 39. Estimated State Revenue Collections STATE GOVERNMENT EMPLOYMENT .............19 2012–13 Biennium, State Taxes ...........................29 Figure 25. State Government Employees, Fiscal Figure 40. Tax and Nontax Revenue Composition, Years 2006 to 2013 ..............................................19 1994–95 to 2012–13 Biennia ..............................29 Figure 26. State Government Employees, Fiscal Sales Tax ....................................................29 Years 2006 to 2013 ..............................................19 EMPLOYEE BENEFITS/PAYROLL EXPENSES .....20 Oil and Gas Production Taxes ................... 30 Figure 27. All Funds Employee Benefi ts/Payroll Motor Fuel Taxes ....................................... 30 Expenses, 2012–13 Biennium .............................20 Motor Vehicle Sales and Rental Tax ........... 30 Figure 28. All Funds Employee Benefi ts/Payroll Expenses, 2012–13 Biennium .............................20 Franchise Tax .............................................30 Employee Group Health Insurance ............. 21 Cigarette and Tobacco Taxes ...................... 31 Figure 29. Total All Funds State Contributions for Alcoholic Beverage Taxes ...........................31 Employee and Retiree Group Health Insurance Fiscal Years 2000 to 2013 ....................................21 Insurance Occupation Taxes .......................31 Figure 30. Texas Group Insurance Program Design Utility Tax ................................................... 32 for General State and Education Employees, Fiscal Year 2012 ...................................................22 Inheritance Tax ........................................... 32 Figure 31. Texas Group Insurance Premiums for Hotel Occupancy Tax ..................................32 General State and Education Employees Fiscal Year 2012 ...................................................23 Other Taxes .................................................32 Figure 32. Average