Summary of Committee Substitute for Senate Bill 1

L E G I S L A T I V E B U D G E T B O A R D

FOR THE 2010 - 2011 BIENNIUM

MARCH 2009

SUBMITTED TO THE SENATE COMMITTEE ON FINANCE LEGISLATIVE BUDGET BOARD

SUMMARY OF COMMITTEE SUBSTITUTE FOR SENATE BILL 1 FOR THE 2010–11 BIENNIUM MARCH 2009

SUBMITTED TO THE SENATE COMMITTEE ON FINANCE

COVER PHOTO COURTESY OF HOUSE PHOTOGRAPHY

TABLE OF CONTENTS

INTRODUCTION ...... 1 Highlights of the Recommendations ...... 2 Recommendations by Method of Financing ...... 5 Recommendations by Fund Source ...... 11 Signiﬁ cant Funding Elements and Costs ...... 12 Full-time-equivalent Positions ...... 16 Performance Measures and Targets ...... 17 Appropriated and Estimated/Budgeted Funds Comparison ...... 18 Factors Affecting the State Budget ...... 19 American Recovery and Reinvestment Act ...... 20 Revenue Outlook for the 2010–11 Biennium ...... 22

GENERAL GOVERNMENT ...... 25 All Funds ...... 25 General Revenue and General Revenue–Dedicated Funds ...... 27 Selected Performance Measures ...... 29 Signiﬁ cant Budget Issues/Recommendations ...... 31

HEALTH AND HUMAN SERVICES ...... 55 All Funds ...... 55 General Revenue and General Revenue–Dedicated Funds ...... 57 Selected Performance Measures ...... 58 Signiﬁ cant Budget Issues/Recommendations ...... 62

EDUCATION ...... 87 All Funds ...... 87 General Revenue and General Revenue–Dedicated Funds ...... 89 Selected Performance Measures ...... 91 Signiﬁ cant Budget Issues/Recommendations ...... 93

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 I TABLE OF CONTENTS

JUDICIARY ...... 111 All Funds ...... 111 General Revenue and General Revenue–Dedicated Funds ...... 113 Selected Performance Measures ...... 115 Signiﬁ cant Budget Issues/Recommendations ...... 116

PUBLIC SAFETY AND CRIMINAL JUSTICE ...... 123 All Funds ...... 123 General Revenue and General Revenue–Dedicated Funds ...... 125 Selected Performance Measures ...... 126 Signiﬁ cant Budget Issues/Recommendations ...... 129

NATURAL RESOURCES ...... 141 All Funds ...... 141 General Revenue and General Revenue–Dedicated Funds ...... 143 Selected Performance Measures ...... 144 Signiﬁ cant Budget Issues/Recommendations ...... 145

BUSINESS AND ECONOMIC DEVELOPMENT ...... 165 All Funds ...... 165 General Revenue and General Revenue–Dedicated Funds ...... 166 Selected Performance Measures ...... 167 Signiﬁ cant Budget Issues/Recommendations ...... 169

REGULATORY ...... 179 All Funds ...... 179 General Revenue and General Revenue–Dedicated Funds ...... 181 Selected Performance Measures ...... 183 Signiﬁ cant Budget Issues/Recommendations ...... 184

II SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD INTRODUCTION

The Senate Committee on Finance’s $12.5 billion, or 7.3 percent, increase from a decrease of $1.2 billion, or 1.4 percent, recommended All Funds appropriations for the 2008–09 biennial level. from the anticipated 2008–09 biennial state government operations for the 2010–11 General Revenue Funds, including funds spending level. Figures 1 and 2 show the biennium total $182.2 billion from all fund dedicated within the General Revenue Fund, 2010–11 recommendations by government sources. The recommendations provide a total $87.5 billion for the 2010–11 biennium, function.

2010–11 BIENNIAL RECOMMENDATIONS FIGURE 1 FIGURE 2 ALL FUNDS GENERAL REVENUE FUNDS AND GENERAL REVENUE–DEDICATED FUNDS IN MILLIONS TOTAL = $182,225.0IN MILLIONS TOTAL = $87,453.2

The Judiciary The Judiciary $672.5 (0.4%) $501.4 (0.6%) Public Safety and Public Safety and Criminal Criminal Justice Justice $10,843.2 (5.9%) $8,639.5 (9.9%)

Natural Resources Natural Resources $3,591.3 (2.0%) $2,332.5 (2.7%)

Business and Economic Business and Economic Development Development Agencies of Education $20,661.4 (11.3%) $895.7 (1.0%) $74,799.6 (41.0%) Agencies of Education Regulatory $50,506.9 (57.8%) $931.9 (0.5%) Regulatory $913.9 (1.0%) General Provisions $129.0 (0.1%) General Provisions $125.4 (0.1%) The Legislature Health and Human Services $355.9 (0.2%) Health and Human Services The Legislature $60,393.1 (33.1%) American Recovery and $25,681.6 (29.4%) $355.3 (0.4%) Reinvestment Act $5,464.2 (3.0%) General Government $2,941.8 (3.4%) General Government $4,382.9 (2.4%) NOTE: Excludes Interagency Contracts. NOTES: Chart does not account for the $5,440.9 million reduction in General Revenue Funds in Article XII. Percentage values do not sum to 100 percent.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 1 HIGHLIGHTS OF THE RECOMMENDATIONS

For the 2010–11 biennium, the Senate 557,508 in fi scal year 2011; this includes Revenue Funds is provided to continue Committee on Finance’s recommendations 66,738 perinatal clients. service levels achieved in fi scal year 2009 include funding for the following key budget and for the expansion of transitional and • The Integrated Eligibility and Enrollment items. (Noted funding increases or decreases intensive ongoing community mental Offi ce determines eligibility for many are from the 2008–09 biennial spending health services. health and human services programs. level.) The offi ce increased staffi ng during the • Funding for the Special Supplemental HEALTH AND HUMAN SERVICES 2008–09 biennium to resume certain Nutrition Program for Women, Infants, • The Medicaid program provides health previously outsourced responsibilities. and Children (WIC) totals $1.7 billion in All and related care to children, pregnant Funding totals $1.4 billion in All Funds Funds ($518 million in General Revenue women, and elderly and/or disabled ($590.1 million in General Revenue and General Revenue–Dedicated Funds). adults. Acute care caseloads (two thirds of Funds). An increase of $100 million in All An anticipated increase of $33 million in which are children) are projected to reach Funds ($50 million in General Revenue Federal Funds will produce an additional three million in fi scal year 2011. Funding Funds) maintains August 2009 staffi ng $17 million in General Revenue–Dedicated totals $45.6 billion in All Funds ($18.9 levels (9,039 full-time equivalents) and Funds, which are generated by rebates on billion in General Revenue and General the state-authorized 2009 salary increase. infant formula and cereal. Client levels are Revenue-Dedicated Funds). An increase These increases are partially offset by expected to exceed one million in fi scal of $5.3 billion in All Funds ($2.8 billion in other adjustments. year 2011. General Revenue and General Revenue– • Funding for Child Protective Services • The Early Childhood Intervention (ECI) Dedicated Funds) is provided to address (CPS) Staff totals $920.7 million in All program provides habilitative services the following items: (1) maintain rates Funds ($374 million in General Revenue to children under the age of three with at fi scal year 2009 levels and address Funds). An increase of $40 million in All developmental disabilities. An increase projected caseload growth, (2) address Funds ($38.5 million in General Revenue of $21.7 million in All Funds ($8.6 million less favorable federal match, (3) address Funds) maintains August 2009 staffi ng and in General Revenue Funds) is provided cost growth, (4) increase community salary levels and adds 84 FTE positions. to Strategy A.1.1. to address caseloads, attendant wages and health care provider which are expected to increase to 31,530 • Adoption Subsidy caseloads are projected rates, (5) achieve cost savings, (6) expand in fi scal year 2011. community-based services/waivers, and to increase by 18 percent or 4,908 children (7) implement state school reform. by fi scal year 2011 (from fi scal year 2009). PUBLIC EDUCATION A budget increase of $47 million in All • $37.0 billion in All Funds is provided • The Children’s Health Insurance Program Funds will support the increased caseload. for the Foundation School Program. In provides health care to children whose In contrast, a reduction of $10 million in addition to funding the state’s current law family income is below 200 percent of All Funds refl ects a projected fl attening of obligations, $1.9 billion in new funding is the Federal Poverty Limit. Funding totals Foster Care caseloads. provided, contingent upon the enactment $2.3 billion in All Funds ($757 million in of legislation relating to a return to a • The Eightieth Legislature appropriated General Revenue Funds). An increase formula-driven school fi nance system that $82 million in General Revenue Funds to of $284 million in All Funds ($114 million improves equity and reduces recapture. expand community mental health crisis in General Revenue Funds) is provided This amount also includes $68.9 million services during the 2008–09 biennium. primarily to address projected caseload to roll forward the eligibility date for the An increase of $70.1 million in General growth. Caseloads are projected to reach Existing Debt Allotment, and $75.0 million

2 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD HIGHLIGHTS OF THE RECOMMENDATIONS (CONTINUED)

in funding for new Instructional Facilities debt service reimbursement for Tuition CRIMINAL JUSTICE Allotment grants. Revenue bonds. Special item funding also • $5.0 billion in All Funds is provided for • $490.6 million in General Revenue Funds decreased a net of $20.4 million due to the incarceration and treatment of adult is included for educator incentive pay the elimination of one-time expenditures offenders. This refl ects an increase of programs, an increase of $147.8 million such as hurricane relief and deferred $367.7 million in General Revenue Funds over the 2008–09 biennium. This amount maintenance and increased funding for primarily caused by state approved salary will maintain baseline funding for the Texas medical school expansions at the Texas increases in fi scal year 2009, correctional Educator Excellence Grant program and A&M University System Health Science offi cer salary increases including laundry provide two years of baseline funding for Center and the Texas Tech University and food service managers, multi-year the District Awards for Teacher Excellence Health Sciences Center. Support for contract rate increases, increased funding program. the system centers and system offi ces for initiatives provided by the Eightieth increased $33.3 million. Legislature, vehicle replacements, rising • $32.1 million in General Revenue is inmate healthcare costs, and increased provided for a new initiative to provide • Texas Forest Service funding to assist volunteer fi re departments was costs for food, overtime, utilities, educator professional development, and hazardous duty pay, and adjustments to $31.0 million is provided for a new program increased $37.0 million mainly due to the appropriation of unexpended balances. the corrections offi cer career ladder in to assist school districts in the purchase of fi scal year 2009. The recommendations school buses equipped with seat belts. • The Higher Education Performance include a decrease of $27.6 million in • Funding for the pre-Kindergarten expan- Incentive Initiative was annualized with an General Revenue Funds for contracted sion grant program is increased by $32.5 additional $100 million and $65.9 million temporary capacity based on January million, an 18 percent increase over the was transferred from special items to the 2009 population projections. General Academic funding formula. 2008–09 biennial appropriation. This in- • $367.2 million in All Funds is provided for creased funding will allow school districts PUBLIC AND HIGHER EDUCATION residential services provided by the Youth to serve an estimated 22,500 additional BENEFITS Commission. This represents a reduction students in full-day pre-Kindergarten • State retirement contributions for the of $78.9 million in General Revenue Funds programs in each year of the 2010–11 Teacher Retirement System and Optional primarily caused by an institutional capacity biennium. Retirement Program are 6.4 percent of reduction of 1,496 beds; a reduction in HIGHER EDUCATION payroll. These contributions will result in contracted capacity based on January • Higher education is supported by $22.7 an All Funds increase of $190.2 million 2009 population projections; a reduction billion in All Funds. Included in this and $9.1 million, respectively, to refl ect of 717 full-time equivalent positions; and amount is $543.8 million in increased assumed payroll growth of 5 percent one-time appropriations made by the formula funding. Enrollment growth for annually in fi scal years 2010 and 2011 in Eightieth Legislature for video surveillance all of higher education is funded resulting public education, and 7 percent annually equipment and an electronic medical in an increase of $208 million in General in fi scal years 2010 and 2011 in higher records system. Recommendations for Revenue Funds and General Revenue– education payroll. fi scal years 2010–11 include an increase Dedicated Funds. Delays in issuing some • Higher Education Group Insurance of $15.7 million in General Revenue bonds and the retirement of other bonds recommendations total $1 billion, refl ecting Funds for juvenile correctional offi cer pay resulted in a decrease of $25.9 million in growth of $51.5 million for rate increases. increases.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 3 HIGHLIGHTS OF THE RECOMMENDATIONS (CONTINUED)

NATURAL RESOURCES Funds ($184.8 million in General Revenue AMERICAN RECOVERY AND • The bill provides for an All Funds increase Funds and General Revenue–Dedicated REINVESTMENT ACT of $143.9 million ($108.1 million in General Funds). The recommendations assume • Amounts available for state appropriation Revenue Funds and $35.8 million in Other a 6.5 percent state contribution increase by virtue of the American Recovery and Funds) in debt service appropriations for in 2010; a 6.8 percent state contribution Reinvestment Act (ARRA) total an esti- General Obligation (GO) Water Bonds. increase in 2011; and spending down the mated $10.9 billion in Federal Funds for the Of this amount, $89.0 million in General fund balance, to cover a 7.5 percent annual 2010–11 biennium. Revenue Funds is for additional debt growth in healthcare claims. In addition, • A portion of the Federal Funds made service related to $890 million in bonds the recommendations assume 1.8 percent available in ARRA may be used to make for State Participation, Economically and 1.6 percent annual growth in overall General Revenue available for other state Distressed Areas Program and Water employee population in fi scal years 2010 obligations. The estimated value of those Infrastructure Fund No. 302 projects and 2011, respectively. reductions is $5.4 billion, making the net associated with the implementation of the RETIREMENT increase to state agencies through the bill State Water Plan. • The bill includes an additional $26.3 million $5.5 billion for the biennium. TRANSPORTATION in All Funds ($16.4 million in General • All ARRA-related appropriations are made • $17.1 billion in All Funds is provided Revenue Funds and General Revenue– in Article XII of the bill. for transportation planning and design, Dedicated Funds) for a state contribution acquisition of right-of-way, construction, of 6.685 percent, when matched with an ITEMS FOR FUTURE CONSIDERATION and maintenance of the state’s employee contribution of 6.685 percent is • The bill includes a listing of items by transportation system. The recommend- expected to meet the normal cost of 13.37 article and amounts by agency in Article ations represent a $0.3 billion decrease percent. XI that are recommended for funding in All Funds, which includes increases consideration should additional revenue BORDER SECURITY become available. The total cost of funding of $1.1 billion in State Highway Funds • Articles IX and XII provide cross-agency and $2.0 billion in Proposition 12 (2007) these items in the 2010–11 biennium is direction on expenditure of funds for $4.6 billion. General Obligation Bond Proceeds, offset border security. by decreases of $1.6 billion in Texas Mobility Funds and $1.0 billion in State • Article XII provides direction on the use of Highway Fund Revenue Bond Proceeds Federal Byrne Justice Grants and Article for highway improvements and safety IX directs the use of $63.7 million included projects, and a decrease of $0.2 billion in the bill pattern for the Department of in General Revenue Funds from the Public Safety. These funds are directed to 2008–09 biennium. the Texas Parks and Wildlife Department, the Texas Department of Criminal Justice, EMPLOYEES RETIREMENT SYSTEM the Trusteed Programs within the Offi ce STATE EMPLOYEE GROUP BENEFITS of the Governor, the Governor’s Division PROGRAM of Emergency Management, and the • The recommendations for state contri- Department of Public Safety. butions for group insurance benefi ts refl ect increased funding of $303.8 million in All

4 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD RECOMMENDATIONS BY METHOD OF FINANCING 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 1 ALL FUNDS: IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE FUNCTION 2008–09* 2010–11 CHANGE CHANGE

Article I – General Government $3,845.1 $4,382.9 $537.8 14.0% Article II – Health and Human Services 54,542.0 60,393.1 5,851.1 10.7 Article III – Agencies of Education 74,151.9 74,799.6 647.7 0.9 Public Education** 52,977.5 52,126.2 (851.3) (1.6) Higher Education 21,174.3 22,673.4 1,499.1 7.1 Article IV – The Judiciary 624.2 672.5 48.3 7.7 Article V – Public Safety and Criminal Justice 10,625.4 10,843.2 217.8 2.1 Article VI – Natural Resources 3,344.0 3,591.3 247.3 7.4 Article VII – Business and Economic Development 21,510.3 20,661.4 (848.9) (3.9) Article VIII – Regulatory 767.3 931.9 164.6 21.5 Article IX – General Provisions 0.0 129.0 129.0 NA Article X – The Legislature 344.0 355.9 10.2 2.9 Article XII – American Recovery and Reinvestment Act 0.0 5,464.2 5,464.2 NA

Total, All Functions $169,754.0 $182,225.0 $12,471.0 7.3%

*Includes certain anticipated supplemental spending needs. **Estimated/budgeted amounts in the 2008–09 biennium include $1,487.6 million to cover the cost of a 25th month of Foundation School Program payments, reversing the deferral of the August payment into the following ﬁ scal year. This is a one-time cost, so no appropriation for this purpose is necessary in the 2010–11 biennium. NOTES: Excludes interagency contracts. Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table and ﬁ gure amounts may not add because of rounding.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 5 RECOMMENDATIONS BY METHOD OF FINANCING 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 2 GENERAL REVENUE FUNDS: IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE FUNCTION 2008–09* 2010–11 CHANGE CHANGE

Article I – General Government $2,109.8 $2,134.2 $24.4 1.2% Article II – Health and Human Services 21,499.6 24,699.4 3,199.9 14.9 Article III – Agencies of Education 48,202.5 48,146.8 (55.8) (0.1) Public Education** 35,783.8 34,814.9 (968.9) (2.7) Higher Education 12,418.7 13,331.9 913.2 7.3 Article IV – The Judiciary 402.9 442.0 39.0 9.7 Article V – Public Safety and Criminal Justice 8,048.0 8,543.6 495.6 6.2 Article VI – Natural Resources 682.5 916.6 234.1 34.3 Article VII – Business and Economic Development 648.3 495.3 (153.0) (23.6) Article VIII – Regulatory 338.6 395.6 57.0 16.8 Article IX – General Provisions 0.0 122.8 122.8 NA Article X – The Legislature 343.5 355.3 11.8 3.4 Article XII – American Recovery and Reinvestment Act 0.0 (5,440.9) (5,440.9) NA

Total, All Functions $82,275.8 $80,810.7 ($1,465.1) (1.8%)

*Includes certain anticipated supplemental spending needs. **Estimated/budgeted amounts in the 2008–09 biennium include $1,487.6 million to cover the cost of a 25th month of Foundation School Program payments, reversing the deferral of the August payment into the following ﬁ scal year. This is a one-time cost, so no appropriation for this purpose is necessary in the 2010–11 biennium. NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table and ﬁ gure amounts may not add because of rounding.

6 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD RECOMMENDATIONS BY METHOD OF FINANCING 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 3 GENERAL REVENUE–DEDICATED FUNDS: IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE FUNCTION 2008–09* 2010–11 CHANGE CHANGE

Article I – General Government $715.9 $807.6 $91.7 12.8% Article II – Health and Human Services 965.8 982.1 16.3 1.7 Article III – Agencies of Education 2,346.0 2,360.2 14.2 0.6 Public Education 96.7 0.2 (96.5) (99.7) Higher Education 2,249.3 2,359.9 110.6 4.9 Article IV – The Judiciary 53.7 59.5 5.7 10.7 Article V – Public Safety and Criminal Justice 24.7 96.0 71.3 289.1 Article VI – Natural Resources 1,462.1 1,415.9 (46.3) (3.2) Article VII – Business and Economic Development 423.8 400.5 (23.3) (5.5) Article VIII – Regulatory 408.3 518.3 110.0 26.9 Article IX – General Provisions 0.0 2.6 2.6 NA Article X – The Legislature 0.0 0.0 0.0 NA Article XII – American Recovery and Reinvestment Act 0.0 0.0 0.0 NA

Total, All Functions $6,400.2 $6,642.5 $242.3 3.8%

*Includes certain anticipated supplemental spending needs. NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table and ﬁ gure amounts may not add because of rounding.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 7 RECOMMENDATIONS BY METHOD OF FINANCING 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 4 GENERAL REVENUE FUNDS AND GENERAL REVENUE–DEDICATED FUNDS: IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE FUNCTION 2008–09* 2010–11 CHANGE CHANGE

Article I – General Government $2,825.7 $2,941.8 $116.2 4.1 % Article II – Health and Human Services 22,465.4 25,681.6 3,216.2 14.3 Article III – Agencies of Education 50,548.5 50,506.9 (41.6) (0.1) Public Education** 35,880.6 34,815.2 (1,065.4) (3.0) Higher Education 14,668.0 15,691.8 1,023.8 7.0 Article IV – The Judiciary 456.7 501.4 44.8 9.8 Article V – Public Safety and Criminal Justice 8,072.7 8,639.5 566.9 7.0 Article VI – Natural Resources 2,144.6 2,332.5 187.9 8.8 Article VII – Business and Economic Development 1,072.1 895.7 (176.3) (16.4) Article VIII – Regulatory 747.0 913.9 166.9 22.3 Article IX – General Provisions 0.0 125.4 125.4 NA Article X – The Legislature 343.5 355.3 11.8 3.4 Article XII – American Recovery and Reinvestment Act (5,440.9) (5,440.9) NA

Total, All Functions $88,676.1 $87,453.2 ($1,222.8) (1.4%)

*Includes certain anticipated supplemental spending needs. **Estimated/budgeted amounts in the 2008–09 biennium include $1,487.6 million to cover the cost of a 25th month of Foundation School Program payments, reversing the deferral of the August payment into the following ﬁ scal year. This is a one-time cost, so no appropriation for this purpose is necessary in the 2010–11 biennium. NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table and ﬁ gure amounts may not add because of rounding.

8 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD RECOMMENDATIONS BY METHOD OF FINANCING 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 5 FEDERAL FUNDS: IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE FUNCTION 2008–09* 2010–11 CHANGE CHANGE

Article I– General Government $682.5 $622.8 ($59.6) (8.7%) Article II – Health and Human Services 31,596.0 34,291.7 2,695.7 8.5 Article III – Agencies of Education 8,827.6 9,381.1 553.5 6.3 Public Education 8,518.7 9,076.7 558.0 6.6 Higher Education 309.0 304.4 (4.5) (1.5) Article IV – The Judiciary 3.6 5.0 1.4 37.2 Article V – Public Safety and Criminal Justice 899.3 618.6 (280.7) (31.2) Article VI – Natural Resources 978.0 1,010.4 32.4 3.3 Article VII – Business and Economic Development 9,156.3 7,929.7 (1,226.6) (13.4) Article VIII – Regulatory 4.3 4.5 0.2 4.5 Article IX – General Provisions 0.0 3.6 3.6 NA Article X – The Legislature 0.0 0.0 0.0 NA Article XII – American Recovery and Reinvestment Act 0.0 10,905.1 10,905.1 NA

Total, All Functions $52,147.6 $64,772.6 $12,625.0 24.2%

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 9 RECOMMENDATIONS BY METHOD OF FINANCING 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 6 OTHER FUNDS: IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE FUNCTION 2008–09* 2010–11 CHANGE CHANGE

Article I – General Government $337.0 $818.3 $481.3 142.8% Article II – Health and Human Services 480.6 419.8 (60.8) (12.7) Article III – Agencies of Education 14,775.7 14,911.5 135.8 0.9 Public Education 8,578.3 8,234.3 (344.0) (4.0) Higher Education 6,197.4 6,677.2 479.8 7.7 Article IV – The Judiciary 163.9 166.1 2.2 1.4 Article V – Public Safety and Criminal Justice 1,653.5 1,585.1 (68.4) (4.1) Article VI – Natural Resources 221.4 248.4 27.0 12.2 Article VII – Business and Economic Development 11,281.9 11,836.0 554.1 4.9 Article VIII – Regulatory 16.0 13.5 (2.5) (15.7) Article IX – General Provisions 0.0 0.0 0.0 NA Article X – The Legislature 0.5 0.6 0.1 20.6 Article XII – American Recovery and Reinvestment Act 0.0 0.0 0.0 NA

Total, All Functions $28,930.3 $29,999.1 $1,068.8 3.7%

*Includes certain anticipated supplemental spending needs. NOTES: Excludes interagency contracts. Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table and ﬁ gure amounts may not add because of rounding.

10 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD RECOMMENDATIONS BY FUND SOURCE 2010–11 BIENNIAL RECOMMENDATIONS

FIGURE 3 BIENNIAL RECOMMENDATIONS FOR 2010–11 BY FUND SOURCE

IN MILLIONS TOTAL = $182,225.0

Federal Funds $64,772.6 (35.5%) Other Funds $29,999.1 General Revenue–Dedicated (16.5%) $6,642.5 (3.6%)

General Revenue Funds $80,810.7 (44.3%)

NOTES: Excludes interagency contracts. Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table and ﬁ gure amounts may not add because of rounding.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 11 SIGNIFICANT FUNDING ELEMENTS AND COSTS

The elements of cost for debt service and TABLE 7 employee benefi ts/employer costs are DEBT SERVICE PAYMENTS BY AGENCY AND FUND SOURCE, ALL FUNDS: described below. These costs are distributed to the various functions of government IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE (Education, Public Safety and Criminal AGENCY/FUND SOURCE 2008–09 2010–11 CHANGE CHANGE Justice, etc.) to refl ect the total cost of each function. Texas Public Finance Authority $676.1 $698.3 $22.2 3.3% Historical Commission/National Museum of 2.0 1.9 ( 0.1) (5.0) DEBT SERVICE the Pacifi c War - Lease Payments Recommendations for debt service costs total Water Development Board - 102.1 245.9 143.8 140.8 $3,378.0 million in All Funds for the 2010–11 Water Bonds biennium and consist of $1,559.3 million in Facilities Commission - 95.0 86.0 (9.0) (9.5) fi scal year 2010 and $1,818.7 million in fi scal Lease Payments year 2011. Table 7 shows estimated/budgeted Preservation Board/History Museum - 12.6 12.3 (0.3) (2.4) and recommended General Obligation and Lease Payments Revenue bond debt service costs by agency Department of State Health Services - 5.8 5.8 0.0 0.0 and methods of fi nance for the 2008–09 and Lease Payments 2010–11 biennia. The recommendations Tuition Revenue Bonds 675.8 649.9 (25.9) (3.8) include a biennial increase of $102.3 million Adjutant General’s Department 5.0 4.6 (0.4) (7.1) in General Revenue Funds mainly due to Department of Criminal Justice - Private 22.8 19.9 (2.9) (12.7) increases for debt service related to General Prison Lease/Purchase Parks and Wildlife - 15.3 14.9 (0.4) (2.6) Obligation bonds for highway construction, Lease Payments water projects, and state agencies, offset by Department of Transportation - 392.4 847.5 455.1 116.0 decreases for debt service related to State State Highway Fund Highway Fund Revenue bonds and debt Department of Transportation - 510.2 691.0 180.8 35.4 service requirements for Tuition Revenue Texas Mobility Fund bonds. In addition, the recommendations Department of Transportation - $0.0 $100.0 $100.0 NA include a biennial increase of $764.5 million Highway Construction* in Other Funds or 93.6 percent, for debt TOTAL, Debt Service Payments $2,515.1 $3,378.0 $862.9 34.3% service from the 2008–09 level. This increase is primarily due to increases in debt service METHOD OF FINANCING: requirements out of the State Highway Fund General Revenue Funds $1,671.5 $1,773.8 $102.3 6.1% and the Texas Mobility Fund. General Revenue–Dedicated Funds 22.0 18.2 (3.8) (17.5) Federal Funds 4.7 4.7 0.0 0.0 Other Funds 816.8 1,581.3 764.5 93.6

TOTAL, All Funds $2,515.1 $3,378.0 $862.9 34.3% *Contingent on passage of Senate Bill 263. NOTE: Totals may not add due to rounding.

12 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD SIGNIFICANT FUNDING ELEMENTS AND COSTS (CONTINUED)

RETIREMENT BENEFITS recommendations for state contributions also rate that would fund the normal cost of the The Employees Retirement System (ERS) refl ect increased funding of $15.4 million in LECOS fund. The required contribution rate administers the retirement program for All Funds ($14 million in General Revenue that would both fund the normal cost and general state employees, which is funded by Funds and General Revenue–Dedicated amortize the unfunded accrued liability over a combination of state contributions, member Funds) for the Law Enforcement and Custodial 31 years is 3.12 percent. contributions, and investment earnings of the Offi cers Supplemental (LECOS) retirement The Teacher Retirement System of Texas retirement fund. The recommendations for fund. These recommendations refl ect a state (TRS) provides retirement benefi ts for state contributions refl ect increased funding contribution rate of 2.18 percent. According employees of public school districts and of $58.8 million in All Funds ($38.0 million to the February 28, 2009 actuarial valuation institutions of higher education. The Optional in General Revenue Funds and General update, this is the required contribution Revenue–Dedicated Funds) for employee retirement benefi ts. Factors used to develop TABLE 8 these recommendations include: a state SELECTED EMPLOYEE BENEFITS, ALL FUNDS: contribution rate of 6.685 percent; 2.1 percent IN MILLIONS ESTIMATED/ growth in 2009 for the general state employee BUDGETED RECOMMENDED BIENNIAL PERCENTAGE pay raise; 1.5 percent annual payroll growth AGENCY/FUND SOURCE 2008–09* 2010–11 CHANGE CHANGE for state employees; and an additional 0.4 Benefi t Replacement Pay $94.0 $84.8 ($9.2) (9.7%) percent and 0.2 percent growth in FTEs in 2010 and 2011, respectively, due to FTE Social Security 1,395.5 1,473.3 77.8 5.6 growth at certain state agencies. ERS Retirement 690.7 749.5 58.8 8.5 These recommendations refl ect a combined ERS LECOS 40.7 56.1 15.4 37.8 contribution rate of 13.37 percent (6.685 ERS Health 2,102.8 2,406.6 303.8 14.4 percent contribution for both the state and TRS-Retirement 3,166.9 3,357.1 190.2 6.0 members). According to the February 28, TRS-Retiree Insurance 477.7 523.4 45.8 9.6 2009 actuarial valuation update of the ERS retirement fund, this is the total required ORP 285.5 294.7 9.1 3.2 contribution rate that would fund the normal HEGI 952.3 1,003.8 51.5 5.4 cost of the retirement plan. The total required TOTAL $9,206.2 $9,949.4 $743.2 8.1% contribution rate that would both fund the normal cost and amortize the plan’s unfunded METHOD OF FINANCING: accrued liability over 31 years is 19.38 General Revenue Funds $7,266.8 $7,811.0 $544.2 7.5% percent. According to the same actuarial General Revenue–Dedicated Funds 458.2 504.7 46.5 10.2 valuation, the retirement plan had a funded ratio (actuarial value of the plan’s assets over Federal Funds 748.0 824.8 76.8 10.3 the plan’s accrued liability) of 88.9 percent, a Other Funds 733.1 808.8 75.7 10.3 decrease of 3.7 percentage points from the TOTAL, All Funds $9,206.2 $9,949.4 $743.2 8.1% August 31, 2008 actuarial valuation. The NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table and fi gure amounts may not add because of rounding.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 13 SIGNIFICANT FUNDING ELEMENTS AND COSTS (CONTINUED)

Retirement Program (ORP) is a defi ned Funds). Factors used to develop the within The University of Texas and Texas A&M contribution plan that was created as an recommendations include: a 6.5 percent state Systems. HEGI contributions also provided alternative to the defi ned benefi t plan provided contribution increase in 2010; a 6.8 percent rate increases of 6.5 percent in fi scal year by TRS. Eligible higher education employees state contribution increase in 2011; and 2010 and 6.8 percent in fi scal year 2011 for all make a one-time choice between participating spending down the entire $260 million ERS- higher education institutions. in ORP or TRS within their fi rst 90 days of projected insurance fund balance, to cover The Teacher Retirement System of Texas employment. State retirement contributions a 7.5 percent annual growth in healthcare (TRS) administers the Texas Public School for the TRS and ORP are 6.4 percent of claims. Retired Employee Group Insurance Program, payroll. These contributions represent an In addition, the recommendations refl ect 1.8 which is referred to as TRS-Care. This program All Funds increase of $190.2 million and percent and 1.6 percent annual growth in provides health insurance coverage for public $9.1 million, respectively, to refl ect assumed overall employee population in fi scal years education TRS retirees who are not eligible payroll growth of 5 percent annually in fi scal 2010 and 2011, respectively. This growth to participate in the state higher education or years 2010 and 2011 in public education and represents continuation of an annual state state employee plans. The recommendations 7 percent annually in fi scal years 2010 and employee retirement rate of fi ve percent and for state contributions to TRS-Care increased 2011 in higher education payroll. higher than average FTE growth at certain by $45.8 million in General Revenue Funds. According to the February 28, 2009 actuarial state agencies. The recommendations include TRS projects that this level of funding, valuation of the TRS retirement fund, the market $14.8 million for the state’s contribution for combined with the fund balance projected for value of the TRS trust fund has decreased dependent health insurance coverage for fi scal year 2009, will be suffi cient to fund TRS- from $104.5 billion to $70.6 billion from the certain state employees through the State Care costs through the 2010–11 biennium. August 31, 2008 actuarial valuation. The total Kids Insurance Program (SKIP). SOCIAL SECURITY AND BENEFIT required state contribution rate to maintain a Higher Education Employees Group Insurance REPLACEMENT PAY 30-year funded ratio is 11.25 percent of pay (HEGI) provides health benefi ts coverage The Comptroller of Public Accounts is if the members’ rate remains at 6.40 percent to higher education employees belonging responsible for the payment of state and of pay. The funded ratio of the plan’s assets to one of the following three systems: The employee Social Security taxes to the federal over the plan’s liability has decreased to 67.7 University of Texas System (UT), the Texas government. It is also responsible for providing percent, down 22.8 percentage points from A&M University System (TAMU), and the Benefi t Replacement Pay (BRP) to general the August 31, 2008 actuarial valuation. Employees Retirement System (ERS). The state employees continuously employed GROUP INSURANCE ERS Group Benefi ts Program serves all since August 31, 1995. Prior to fi scal year The Employees Retirement System (ERS) higher education institutions that are not part 1996, state employees received a state-paid administers the Group Benefi ts Program, of either UT or TAMU. The recommendations Federal Insurance Contributions Act (FICA) which provides group health insurance to for state contributions to HEGI result in an All supplemental payment of 5.85 percent on active and retired state employees, and their Funds increase of $51.5 million, and funds their fi rst $16,500 of FICA-covered wages, dependents. The recommendations for state premium contribution rates at 97.5 percent up to a maximum of $965.25. The Seventy- contributions for group insurance benefi ts of ERS general state employee premium fourth Legislature, Regular Session, 1995, refl ect increased funding of $303.8 million in rates for institutions participating in the Group repealed this state-paid contribution for the All Funds ($184.8 million in General Revenue Benefi ts Program, and 95 percent of ERS Social Security obligation and replaced it with Funds and General Revenue–Dedicated general state premium rates for institutions

14 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD SIGNIFICANT FUNDING ELEMENTS AND COSTS (CONTINUED)

a benefi t supplement (BRP) to ensure that take-home pay was not reduced. The recommendations for state contributions for Social Security refl ect increased funding of $77.8 million in All Funds ($63 million in General Revenue Funds and General Revenue–Dedicated Funds). These recommendations for Social Security refl ect: a 1.5 percent annual payroll growth rate for general state employees; 3.5 percent annual payroll growth for higher education employees; and FTE growth of 0.4 percent and 0.2 percent in 2010 and 2011, respectively, due to higher than average FTE growth at certain state agencies. The recommendations for Benefi t Replacement Pay refl ect decreased funding of $9.2 million in All Funds ($5.5 million in General Revenue Funds and General Revenue–Dedicated Funds) due to a projected 5 percent annual turnover rate in employees hired before September 1, 1995.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 15 FULL-TIME-EQUIVALENT POSITIONS

The Senate Committee on Finance’s FIGURE 4 recommendations provide for 236,605 full- FULL-TIME-EQUIVALENT POSITIONS time-equivalent positions (FTEs) in fi scal 238,204 year 2010, and 236,679 in fi scal year 236,605 236,679 2011. As shown in Figure 4, the fi scal year 2011 amount represents a decrease of 1,525 from the 2009 budgeted levels. The 226,127 recommendations generally establish FTE 220,988 caps for fi scal years 2010 and 2011 for institutions of higher education at the lower of 2008 actual or 2010–11 requested levels.

2007 2008 2009 2010 2011 Expended Esitmated Budgeted Recommended Recommended

Fiscal Year TABLE 9 FULL-TIME-EQUIVALENT POSITIONS IN MILLIONS EXPENDED ESTIMATED BUDGETED RECOMMENDED RECOMMENDED FUNCTION 2007 2008 2009 2010 2011

Article I – General Government 9,278 9,158 9,849 9,938 9,936 Article II – Health and Human Services 47,831 50,051 54,330 55,555 55,618 Article III – Agencies of Education 81,585 85,426 88,533 85,637 85,664 Article IV – The Judiciary 1,320 1,347 1,393 1,411 1,411 Article V – Public Safety and Criminal Justice 51,537 50,969 53,428 53,004 52,953 Article VI – Natural Resources 8,091 8,265 8,622 8,779 8,806 Article VII – Business and Economic Development 18,186 17,608 18,287 18,231 18,229 Article VIII – Regulatory 3,160 3,303 3,762 3,959 3,972 Article IX – General Provisions - - - 91 91 Grand Total 220,988 226,127 238,204 236,605 236,679

NOTE: Totals may not add because of rounding.

16 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD PERFORMANCE MEASURES AND TARGETS

There are four types of performance measures • Effi ciency measures are used to assess As shown in Table 10, the recommended used in the appropriations process: outcome, the cost-effi ciency, productivity, and appropriations for the 2010–11 biennium output, effi ciency, and explanatory. Each type timeliness of agency operations. contain 1,903 key performance measures, of measure serves a different purpose. which represents a 3 percent decrease in the • Explanatory measures are used to defi ne total number of key performance measures • Outcome measures are used to assess an the agency’s operating environment and from the 2008–09 biennial level and a 12 agency’s effectiveness in serving its key to explain factors that are relevant to the percent decrease from the 2000–01 level. customers and in achieving its mission, interpretation of other agency measures. Performance measures that have been goals, and objectives. They also are used Performance measures contained in the developed for state agency use but that are to direct resources to strategies with General Appropriations Act are designated not contained in the General Appropriations the greatest effect on the most-valued as key measures. For key outcome, output, Act are designated as non-key measures. outcomes. effi ciency and explanatory performance Although targets are not established, agencies measures, a target is established for each • Output measures are used to assess annually submit performance information year of the biennium for which funds are workload and the agency’s efforts to related to these measures to the LBB. address those demands. appropriated.

TABLE 10 PERFORMANCE MEASURES, BY TYPE

NUMBER OF MEASURES APPROPRIATED APPROPRIATED APPROPRIATED APPROPRIATED APPROPRIATED RECOMMENDED TYPE OF MEASURE 2000–01 2002–03 2004–05 2006–07 2008–09 2010–11 KEY Outcome (results/impact) 902 830 901 906 879 868 Output (volume) 828 819 824 734 669 651 Efﬁ ciency 300 291 295 323 287 236 Explanatory 121 125 135 124 126 148 Total 2,151 2,065 2,155 2,087 1,961 1,903 NON-KEY Outcome (results/impact) 1,985 1,355 1,414 1,495 1,499 1,452 Output (volume) 1,634 1,538 1,455 1,340 1,331 1,243 Efﬁ ciency 807 863 831 743 714 630 Explanatory 1,045 1,056 1,084 996 984 885 Total 5,471 4,812 4,784 4,574 4,528 4,210

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 17 APPROPRIATED AND ESTIMATED/BUDGETED FUNDS COMPARISON

All Funds appropriations for the 2008–09 biennium, as refl ected in the 2008–09 Fiscal Size-up publication, totaled $167.8 billion. The sum of fi scal year 2008 estimated amounts and fi scal year 2009 budgeted amounts as shown in the Legislative Budget Estimates for the Eightieth Legislature, 2007, is $169.8 billion. The net increase of $2.0 billion is TABLE 11 attributable to the following major items: RECONCILIATION OF 2008–09 APPROPRIATIONS • $1.6 billion in higher than expected TO 2008–09 ESTIMATED/BUDGETED AMOUNTS spending needs ($1.1 billion in General ALL FUNDS Revenue Funds and $0.5 billion in IN MILLIONS Federal Funds) for teacher retirement ADJUSTMENT contributions, health and human services BUDGET ADJUSTMENTS AMOUNT 2008–09 programs, group insurance for community 2008–09 APPROPRIATIONS AS PUBLISHED IN FISCAL SIZE-UP $167.8 colleges and the Texas Department of Major Budget Adjustments Criminal Justice; Higher than expected spending needs—teacher retirement, health and $1.6 • $0.9 billion decrease in spending for the human services, criminal justice, and higher education group insurance Foundation School Program due to higher Lower than expected spending for the Foundation School Program (0.9) than expected local property values and Higher than expected transportation funding 0.7 lower than expected K–12 enrollment; Disaster-related assistance 0.8 • net increase of $0.7 billion in transportation Unspent General Obligation bond proceeds (0.4) spending from various adjustments in Miscellaneous items 0.2 revenue sources supporting transportation projects; Subtotal, Adjustments $2.0 Total, Estimated/Budgeted for 2008–09 $169.8 • $0.8 billion in funding for disaster assistance and homeland security; and NOTE: Totals may not add because of rounding. • $0.4 billion decrease in capital spending tied to lower than expected issuance of General Obligation bonds.

18 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD FACTORS AFFECTING THE STATE BUDGET

Recommended healthcare-related appro- • Higher education enrollment in general • Average monthly caseload for nursing priations for the 2010–11 biennium total $61.4 academic institutions has increased by home clients has decreased by 7.2 billion in All Funds, representing 34 percent of 27.8 percent. percent. the proposed state budget. Healthcare-related • Community college enrollment has grown • Average inmate population in the costs continue to be the state’s single largest by 40.3 percent. Department of Criminal Justice has grown budget driver. • The Children’s Health Insurance Program by 10.0 percent. Other signifi cant factors affecting the cost of served 442,548 children in fi scal year • Average residential population at the state government include public and higher 2008. Youth Commission has decreased by 41.4 education enrollment, prison incarceration, and percent. certain health and human services programs. • Average monthly caseload for Medicaid As depicted in Table 12, the following are the waiver clients has grown by 131.5 These factors do not totally explain the growth major growth indicators from 1998 to 2008. percent. in the budget. Other cost-related factors, such • Average monthly caseload for Medicaid as medical infl ation, can have an equal or • Average daily attendance in public schools greater effect on growth. has grown 20.4 percent. clients (Acute Care and STAR+PLUS) has grown by 54.2 percent.

TABLE 12 MAJOR BUDGET INDICATORS, 1998 AND 2008

INDICATORS ACTUAL 1998 ACTUAL 2008 PERCENTAGE CHANGE Average Daily Attendance—Public Schools 3,584,868 4,316,833 20.4 Fall Headcount Enrollment—General Academic Institutions 398,258 509,136 27.8 Fall Headcount Enrollment—Community/Junior College 406,610 570,573 40.3 Average Monthly Caseload—Children’s Health Insurance Program (CHIP) 0 442,548 NA Average Monthly Caseload—Medicaid Waiver Clients 19,985 46,256 131.5 Average Monthly Caseload—Medicaid Clients (Acute Care and STAR+PLUS) 1,863,106 2,873,455 54.2 Average Monthly Caseload—Nursing Home Clients (excludes Hospice) 67,749 62,878 (7.2) Average Inmate Population—Department of Criminal Justice 141,789 155,985 10.0 Average Residential Population—Youth Commission 4,907 2,875 (41.4)

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 19 AMERICAN RECOVERY AND REINVESTMENT ACT

In February 2009, the American Recovery • General Government Stabilization: submit quarterly reports on expenditure and Reinvestment Act (ARRA) was signed ARRA provides $700 million to be used of funds appropriated from ARRA funds to into law. ARRA will provide an estimated for any government service program. the Governor, Legislative Budget Board, $16 billion in increased Federal spending The bill allocates those funds to the State Auditor’s Offi ce, and Comptroller of to Texas fl owing in fi scal years 2009 and Texas Education Agency and to the Public Accounts. 2010. Not all of those funds are under the Higher Education Coordinating Board. purview of the state General Appropriations The programs for which those funds Act. The supplemental appropriations act will would replace General Revenue are address the portion of funds subject to state unspecifi ed. appropriation for fi scal year 2009. For the • Federal Program Expansion: The pre- 2010–11 biennium, CSSB 1 includes a total of ponderance of funding under ARRA is for $10.9 billion in Federal Funds in Article XII, programs already funded by the Federal and reduces General Revenue by $5.4 billion government. Examples of signifi cant (appropriated elsewhere in the bill) creating a funding increases to existing funding net article increase of $5.5 billion. streams include: METHOD OF FINANCE ADJUSTMENTS o Title I and Individuals with Disabilities • FMAP: The largest program under ARRA Education Act funding in public is Medicaid Enhanced FMAP, providing education; a more favorable Medicaid match rate to Texas. Total availability under this provision o Highway and bridge construction at the provided in the bill is $2.5 billion, with an Texas Department of Transportation; additional $1.6 billion in 2009. These funds o Weatherization at the Department of are provided to the Health and Human Housing and Community Affairs; Services Commission, freeing up a like o Child Care and Development Block amount of General Revenue. HHSC will Grant at the Texas Workforce allocate the funds as appropriate to the Commission; and other Medicaid programs within Article II. o State Energy Program at the Comp- • Education Stabilization: The second- troller of Public Accounts. largest allocation under ARRA is for education stabilization. These funds, • One-time Priorities: It is the stated intent estimated to be $3.3 billion starting in in CSSB 1 that state agencies and fi scal year 2009 ($2.4 billion in CSSB 1) institutions of higher education focus the are intended to be used to assist states ARRA funds on items that are one-time in continuing historical levels of support and non-recurring in nature. It is unclear for public and higher education. The at this time which, if any, of the ARRA bill allocates these funds to the Texas Federal funding increases will continue. Education Agency, General Academic • Agencies and higher education institu- Institutions and Community Colleges. tions receiving ARRA funds will have to

20 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD AMERICAN RECOVERY AND REINVESTMENT ACT (CONTINUED)

TABLE 13 AMERICAN RECOVERY AND REINVESTMENT ACT SIGNIFICANT METHOD OF FINANCE AND APPROPRIATIONS ADJUSTMENTS GENERAL REVENUE FEDERAL FUNDS FUNDS REDUCED INCREASED Fiscal Programs – Comptroller of Public Accounts State Energy Program $218.8 Trusteed Programs within the Ofﬁ ce of the Governor Byrne Justice Grants $90.9 Health and Human Services Commission FMAP ($2,513.0) $2,513.0 Texas Education Agency Education Stabilization ($1,774.0) $2,045.0 Education Stabilization – Technology Grant ($271.0) General Government Stabilization ($500.0) $500.0 IDEA, Special Education & Preschool $969.3 Title I – Grants to Local Education Agencies $944.6 Title I – School Improvement Grants $285.2 Educational Technology District Grants $59.4 Higher Education Coordinating Board General Government Stabilization ($200.0) $200.0 Community Colleges Education Stabilization ($110.0) $110.0 Department of Housing and Community Affairs Weatherization $327.0 HOME Program $148.0 Texas Department of Transportation Highway and Bridge Construction $1,587.0 Urban and Rural Transit $50.0 Texas Workforce Commission Workforce Investment Act $169.3 Child Care Development Block Grant $193.3 Department of Assistive and Rehabilitative Services IDEA, Part C $39.4 Vocational Rehabilitation Services $44.8 All Others ($72.9) $410.1 TOTAL ($5,440.9) $10,905.1

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 21 REVENUE OUTLOOK FOR THE 2010–11 BIENNIUM

CONSTITUTIONAL SPENDING LIMITS • The 2010–11 limit on appropriations from state ARTICLE III, §49 (J), Texas has four constitutional limits on spending: tax revenue not dedicated by the Constitution DEBT LIMIT the “pay-as-you-go,” or balanced budget limit; of $79,664,277,468 subject to adjustments to Article III, §49(j) of the Texas Constitution the limit on the rate of growth of appropriations 2008–09 biennial appropriations referenced provides that the Legislature may not authorize from certain state taxes; the limit on welfare above. additional state debt if in any fi scal year the spending; and a limit on tax-supported debt. The Senate Committee on Finance’s recom- resulting maximum annual debt service payable ARTICLE III, SECTION 49A, mended 2010–11 appropriations are within from the General Revenue Fund, excluding revenues constitutionally dedicated for purposes “PAY-AS-YOU-GO” LIMIT the Article VIII limit. The exact relationship other than payment of state debt, exceeds 5 Article III, §49a, Texas Constitution, is the “pay- between the fi nal 2010–11 appropriations and percent of the average annual unrestricted as-you-go” limit. It requires that bills making the Article VIII limit will depend on the contents general revenue for the previous three years. appropriations be sent to the Comptroller for of the Comptroller’s revised revenue estimate To fulfi ll this requirement, the Bond Review certifi cation that the appropriations are within and supplemental appropriations that may be Board calculates two debt limits. The fi rst limit available general revenue. enacted by the Legislature. applies to outstanding or issued debt, and for Recommended appropriations from the General ARTICLE III, §51-A, the end of fi scal year 2008, the issued debt Revenue Fund for the 2010–11 biennium total WELFARE SPENDING LIMIT calculation is 1.30 percent. The second limit $80.8 billion, which exceeds the “pay-as-you- Article III, §51-a, of the Texas Constitution calculation includes both issued and authorized go” limit, pending consideration of the 2009 provides that the amount that may be paid out of but unissued bonds. The Bond Review Board supplemental appropriations bill. state funds for assistance grants to or on behalf has determined that the state is currently at 4.09 of needy dependent children and their caretakers ARTICLE VIII, §22, percent of unrestricted general revenue for the shall not exceed 1 percent of the state budget in LIMIT ON THE GROWTH OF end of fi scal year 2008. This latter calculation any biennium. includes authorization of $3 billion in bonds for CERTAIN APPROPRIATIONS cancer research initiatives and $5 billion for Article VIII, §22, Texas Constitution states: “In no In accordance with Human Resources Code, transportation projects; CSSB 1 includes $600 biennium shall the rate of growth of appropriations §31.053, the following items of information million in General Obligation bond proceeds for from state tax revenue not dedicated by this pertaining to the limit are provided: cancer prevention and research grants; and $2 Constitution exceed the estimated rate of growth • The Senate Committee on Finance’s billion in General Obligation bond proceeds for of the state’s economy.” Under Government recommended 2010–11 biennial budget highway construction projects. Code, §316, the LBB is required to adopt the defi ned in Human Resources Code, §31.051, items of information establishing the Article VIII is $182,225.0 million; Committee Substitute for Senate Bill 1 includes limit. The Board met on November 14, 2008, and appropriations of $92.5 million in General • The maximum biennial amount of 1 percent adopted the following items: Revenue for debt service on $1.0 billion in of the state budget is $1,822.3 million; and general obligation bond proceeds for Water • The level of appropriations from state tax • The biennial amount included in the LBB’s Infrastructure, the State Participation, and the revenue not dedicated by the Constitution for recommendations subject to the limit on state Economically Distressed Areas Program (EDAP) the 2008–09 biennium is $72,992,740,945 dollars paid out in Temporary Assistance for programs. It is estimated that the impact of debt subject to adjustments or revisions resulting Needy Families (cash assistance) grants service for these appropriations would increase from revenue forecast; is $131.4 million. This amount is $1,690.9 the constitutional debt limit from 4.09 percent • The estimated rate of growth of the Texas million less than the 1 percent limit. to 4.35 percent of the three year average of economy from the 2008–09 biennium to unrestricted general revenue. the 2010–11 biennium of 9.14 percent; and therefore,

22 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD REVENUE OUTLOOK FOR THE 2010–11 BIENNIUM (CONTINUED)

ECONOMIC STABILIZATION FUND (RAINY DAY FUND) The Economic Stabilization Fund, frequently referred to as the Rainy Day Fund, ended fi scal year 2008 with a balance of $4,355.4 million. As a result of natural gas tax and oil production tax collections in fi scal year 2008 exceeding 1987 levels, the fund received a transfer of $2,241.9 million from the General Revenue Fund in November 2008. The November transfer plus interest earnings less expenditures brought the Economic Stabilization Fund balance to $6,660.5 million as of January 1, 2009. The comptroller forecasts that by the end of fi scal year 2011, the balance in the Economic Stabilization Fund will be $9.1 billion.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 23 24 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD GENERAL GOVERNMENT 2010–11 BIENNIAL RECOMMENDATIONS

All Funds recommendations for General For General Revenue Funds and Selected performance measures for agencies Government total $4.4 billion for the General Revenue–Dedicated Funds, the in the General Government function are 2010–11 biennium, which is an increase of recommendations total $2.9 billion, which depicted in Table 16. $537.8 million, or 14.0 percent, from the is an increase of $116.2 million, or 4.1 2008–09 biennium (Table 14). percent, from the 2008–09 biennium (Table 15). TABLE 14 ALL FUNDS: GENERAL GOVERNMENT IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Commission on the Arts $9.9 $12.4 $2.6 25.9% Offi ce of the Attorney General 984.8 1,005.1 20.3 2.1 Bond Review Board 1.2 1.2 0.0 0.7 Cancer Prevention and Research Institute of Texas 6.9 600.0 593.1 8,592.5 Comptroller of Public Accounts 440.6 443.5 2.9 0.7 Fiscal Programs - Comptroller of Public Accounts 657.0 663.6 6.6 1.0 Commission on State Emergency Communications 152.3 160.5 8.2 5.4 Employees Retirement System 15.2 15.2 0.0 - Texas Ethics Commission 4.0 4.1 0.2 3.8 Facilities Commission 211.9 164.9 (46.9) (22.2) Public Finance Authority 1.8 6.7 4.8 264.0 Fire Fighter’s Pension Commissioner 10.0 1.6 (8.4) (84.4) Offi ce of the Governor 22.2 23.6 1.4 6.2 Trusteed Programs Within the Offi ce of the Governor 730.0 600.9 (129.1) (17.7) Historical Commission 99.0 85.0 (14.0) (14.1) Department of Information Resources 464.6 535.1 70.5 15.2

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 25 GENERAL GOVERNMENT 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 14 ALL FUNDS: GENERAL GOVERNMENT (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Library & Archives Commission $64.5 $69.6 $5.0 7.8% Pension Review Board 1.4 3.5 2.0 142.7 Preservation Board 25.6 22.9 (2.6) (10.4) State Ofﬁ ce of Risk Management 16.5 17.8 1.3 8.1 Workers’ Compensation Payments 90.9 98.1 7.3 8.0 Secretary of State 108.1 97.8 (10.3) (9.5) Ofﬁ ce of State-Federal Relations 1.6 1.4 (0.2) (15.0) Veteran’s Commission 32.0 34.1 2.1 6.6 Subtotal, General Government $4,152.0 $4,668.7 $516.7 12.4%

Retirement and Group Insurance $173.3 $196.2 $22.9 13.2% Social Security and Beneﬁ t Replacement Pay 75.0 78.4 3.3 4.5 Subtotal, Employee Beneﬁ ts $248.3 $274.5 $26.2 10.6%

Bond Debt Service Payments $29.4 $89.4 $60.0 204.3% Lease Payments 24.6 23.2 (1.5) (5.9) Subtotal, Debt Service $54.0 $112.5 $58.6 108.5%

Less Interagency Contracts $609.2 $672.9 $63.7 10.4%

Total Article I – General Government $3,845.1 $4,382.9 $537.8 14.0%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

26 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD GENERAL GOVERNMENT 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 15 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: GENERAL GOVERNMENT IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Commission on the Arts $5.4 $8.4 $3.0 56.3% Offi ce of the Attorney General 562.2 569.2 7.0 1.2 Bond Review Board 1.2 1.2 0.0 0.7 Cancer Prevention and Research Institute of Texas 6.6 0.0 (6.6) (99.4) Comptroller of Public Accounts 436.4 439.4 3.1 0.7 Fiscal Programs - Comptroller of Public Accounts 639.5 660.3 20.9 3.3 Commission on State Emergency Communications 151.4 160.0 8.6 5.7 Employees Retirement System 15.2 15.2 0.0 - Texas Ethics Commission 3.8 4.1 0.3 7.9 Facilities Commission 62.3 74.5 12.2 19.5 Public Finance Authority 1.1 6.0 4.8 433.0 Fire Fighters’ Pension Commissioner 9.9 1.5 (8.4) (85.0) Offi ce of the Governor 21.3 22.6 1.4 6.5 Trusteed Programs Within the Offi ce of the Governor 496.2 491.6 (4.6) (0.9) Historical Commission 32.9 33.7 0.8 2.3 Department of Information Resources 1.6 1.6 0.0 0.8 Library & Archives Commission 35.1 39.7 4.6 13.2 Pension Review Board 1.4 3.4 2.1 151.6 Preservation Board 25.5 22.8 (2.6) (10.4) State Offi ce of Risk Management 7.5 0.0 (7.5) (100.0) Secretary of State 51.7 44.0 (7.7) (14.9)

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 27 GENERAL GOVERNMENT 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 15 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: GENERAL GOVERNMENT (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Ofﬁ ce of State-Federal Relations $1.2 $1.2 $0.0 0.5% Veteran’s Commission 9.7 14.3 4.5 46.8 Subtotal, General Government $2,579.0 $2,614.9 $35.9 1.4%

Retirement and Group Insurance $132.6 $151.1 $18.5 14.0% Social Security and Beneﬁ t Replacement Pay 60.1 63.3 3.1 5.2 Subtotal, Employee Beneﬁ ts $192.7 $214.4 $21.6 11.2%

Bond Debt Service Payments $29.4 $89.4 $60.0 204.5% Lease Payments 24.6 23.2 (1.5) (5.9) Subtotal, Debt Service $54.0 $112.5 $58.6 108.5%

Total Article I – General Government $2,825.7 $2,941.8 $116.2 4.1%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

28 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 16 SELECTED PERFORMANCE MEASURES: GENERAL GOVERNMENT ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

OFFICE OF THE ATTORNEY GENERAL Amount of Title IV-D Child Support Collected (in Millions) $2,631.7 $2,800.0 $2,900.0 $3,100.0

COMPTROLLER OF PUBLIC ACCOUNTS Delinquent Taxes Collected Per Collection-related Dollar $69.0 $79.0 $79.0 $79.0 Expended

EMPLOYEES RETIREMENT SYSTEM Percentage of Health Select Participants Satisﬁ ed with 88.6% 90.0% 90.0% 90.0% Network Services

FACILITIES COMMISSION Percentage of Completed Construction Projects on 95.8% 90.0% 95.0% 95.0% Schedule and within Budget

TRUSTEED PROGRAMS WITHIN THE OFFICE OF THE GOVERNOR Number of New Jobs Announced by Businesses 8,916 8,000 8,000 8,000 Receiving Recruitment and Expansion Assistance

HISTORICAL COMMISSION Number Served by State Historic Sites and Interpretive 175,586 220,000 225,000 225,000 Programs

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 29 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 16 SELECTED PERFORMANCE MEASURES: GENERAL GOVERNMENT (CONTINUED) ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

DEPARTMENT OF INFORMATION RESOURCES Total Contract Savings and Cost Avoidance Provided $124.7 $95.0 $120.0 $120.0 through DIR Contracts (in Millions) Percentage of Monthly Minimum Service Level Targets 88.8% 92.0% 92.0% 92.0% Achieved for Data Center Services

OFFICE OF RISK MANAGEMENT Incident Rate of Injuries and Illnesses Per 100 Covered 3.99% 4.00% 4.00% 4.00% Full-time State Employees

VETERANS COMMISSION Amount of VA Monetary Awards (in Millions) Paid $1,264.1 $1,210.0 $1,274.0 $1,274.0 Because of Commission Advocacy in Claims Representation of Veterans with Service-connected Disabilities

30 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 17 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: GENERAL GOVERNMENT IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS MULTI-ARTICLE ISSUES EMPLOYEE BENEFITS Retirement Contingent upon passage of legislation, an increase of EST/BUD $399.2 $28.1 $136.2 $127.2 $690.7 $26.3 million in All Funds ($16.4 million in General Revenue 2008–09 Funds and General Revenue–Dedicated Funds) to fund REC $435.0 $30.3 $147.3 $136.9 $749.5 the normal cost of employee retirement beneﬁ ts. Under 2010–11 this legislation, the state contribution would increase from 6.45 percent to 6.685 percent, and the member contribution BIENNIAL 9.0% 7.8% 8.1% 7.6% 8.5% would increase from 6 percent to 6.685 percent. These CHANGE increases reﬂ ect a combined contribution rate of 13.37 percent. According to the February 28, 2009 actuarial valuation update, this is the total required contribution rate that would fund the normal cost. The total required contribution rate that would both fund the normal cost and amortize the unfunded accrued liability over 31 years is 19.38 percent.

Increased funding of $32.4 million in All Funds ($21.6 million in General Revenue Funds and General Revenue– Dedicated Funds) reﬂ ects a 2.1 percent growth in 2009 for the general state employee pay raise, 1.5 percent annual payroll growth for state employees, and an additional 0.4 percent and 0.2 percent growth in FTEs in 2010 and 2011, respectively, due to FTE growth at speciﬁ c state agencies.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 31 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Law Enforcement and Custodial Ofﬁ cers Supplemental (LECOS) Retirement Fund Increased funding of $15.2 million in All Funds ($13.8 EST/BUD $36.6 $0.5 $0.1 $3.5 $40.7 million in General Revenue Funds and General Revenue– 2008–09 Dedicated Funds) for the state contribution to the LECOS REC $50.4 $0.7 $0.2 $4.8 $56.1 retirement fund. 2010–11 The funding reﬂ ects a state contribution rate of 2.18 BIENNIAL 37.7% 40.0% 100.0% 37.1% 37.8% percent. According to the February 28, 2009 actuarial CHANGE valuation update, this is the required contribution rate that would fund the normal cost of the LECOS fund. The required contribution rate that would both fund the normal cost and amortize the unfunded accrued liability over 31 years is 3.13 percent.

Group Insurance Increased funding of $303.8 million in All Funds ($184.8 EST/BUD $1,211.0 $74.0 $415.5 $402.2 $2,102.7 million in General Revenue Funds and General Revenue– 2008–09 Dedicated Funds) for state employee group insurance REC $1,385.3 $84.5 $475.4 $461.4 $2,406.6 beneﬁ ts. Factors used for funding include a 6.5 percent 2010–11 state contribution increase in 2010, a 6.8 percent state contribution increase in 2011, and spending down the entire BIENNIAL 14.4% 14.2% 14.4% 14.7% 14.5% $260 million ERS-projected insurance fund balance, which CHANGE covers a 7.5 percent annual growth in healthcare claims.

32 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 17 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: GENERAL GOVERNMENT (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS In addition, the funding reﬂ ects 1.8 percent and 1.6 percent annual growth in overall employee population in 2010 and 2011, respectively. This growth represents continuation of an annual state employee retirement rate of ﬁ ve percent and higher than average FTE growth at certain state agencies. Funding also includes $14.8 million for the state’s contribution for dependent health insurance coverage for certain state employees through the State Kids Insurance Program (SKIP).

Social Security Increased funding of $77.8 million in All Funds ($63 EST/BUD $905.8 $136.3 $177.3 $176.1 $1,395.5 million in General Revenue Funds and General Revenue– 2008–09 Dedicated Funds) for social security based on a 1.5 percent REC $960.9 $144.2 $184.9 $183.3 $1,473.3 annual payroll growth rate for general state employees 2010–11 and 3.5 percent annual payroll growth for higher education employees. Funding also provides for additional FTE BIENNIAL 6.1% 5.8% 4.3% 4.1% 5.6% growth of 0.4 percent and 0.2 percent in 2010 and 2011, CHANGE respectively, due to FTE growth at speciﬁ c state agencies.

Beneﬁ t Replacement Pay Decreased funding of $9.2 million in All Funds ($5.5 EST/BUD $49.7 $6.2 $18.8 $19.3 $94.0 million in General Revenue Funds and General Revenue– 2008–09 Dedicated Funds) due to a projected 5 percent annual REC $44.8 $5.6 $17.0 $17.4 $84.8 turnover rate in employees hired before September 1, 2010–11 1995. BIENNIAL (9.9%) (9.7%) (9.6%) (9.8%) (9.8%) CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 33 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

DEBT SERVICE State General Obligation Debt Issued by the Texas Public Finance Authority • Increased funding of $22.3 million in All Funds ($26.3 EST/BUD $660.1 $5.1 $4.7 $6.1 $676.0 million in General Revenue and General Revenue– 2008–09 Dedicated Funds) for debt service payments on General REC $686.2 $5.4 $4.7 $2.0 $698.3 Obligation bonds issued and anticipated to be issued 2010–11 through ﬁ scal year 2009 and new General Obligation bond proceeds for the 2010–11 biennium as reﬂ ected BIENNIAL 4.0% 5.9% 0.0% (67.2%) 3.3% below: CHANGE

• increase of $70.3 million in General Revenue for debt service on $600.0 million in bond proceeds for cancer prevention and research grants and administrative costs for the Cancer Prevention and Research Institute ($45 million), and $253.0 million in bond proceeds for new capital projects for various agencies ($23.5 million);

• decrease of $23.9 million in General Revenue for a planned one-time pay off of principal for the Colonias Roadway program in ﬁ scal year 2009, however, due to current uncertainties in the ﬁ nancial market, the Texas Public Finance Authority has delayed paying off this debt;

• decrease of $26.7 million in General Revenue related to various capital projects ($111.4 million in bond proceeds) which were not approved during the 2008–09 biennium;

34 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

• increase of $6.4 million in General Revenue related to delays in issuances for the Parks and Wildlife Department and new capital projects in General Revenue Account 400 - Sporting Good Tax-State Parks; and

• decrease of $4.1 million in Other Funds due to Current Fund balances not anticipated to be available for debt service.

FACILITIES COMMISSION – LEASE PAYMENTS ON REVENUE BONDS Decreased funding of $9 million in General Revenue Funds EST/BUD $89.2 $5.8 $0.0 $0.0 $95.0 and General Revenue–Dedicated Funds for debt service on 2008–09 Revenue Bonds for state-owned space due to reduced debt REC $84.3 $1.7 $0.0 $0.0 $86.0 service requirements. 2010–11 BIENNIAL (5.5%) (70.7%) NA NA (9.5%) CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 35 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

MULTI-AGENCY ISSUES Data Center Consolidation Services Increased funding of $60.7 million in All Funds ($42.3 EST/BUD $100.6 $25.5 $99.6 $63.9 $289.6 million in General Revenue Funds and General Revenue– 2008–09 Dedicated Funds) for Data Center Services (DCS) provided REC $138.2 $30.2 $122.4 $59.5 $350.3 to state agencies by the Department of Information 2010–11 Resources (DIR). Amounts include $43.0 million in All Funds ($34.1 million in General Revenue Funds and BIENNIAL 37.4% 18.4% 22.9% (6.9%) 21.0% General Revenue–Dedicated Funds) for certain agencies CHANGE to meet current obligations for DCS during the 2010–11 biennium.

On October 28, 2008, the Governor suspended the DCS contract and directed DIR to address concerns regarding DCS vendor performance. As a result, DIR stopped the physical consolidation of data centers and is working with affected agencies to provide the Governor’s Ofﬁ ce a comprehensive corrective action plan. At this time it is unknown how this action will impact data center operations, however DIR expects full consolidation of the data centers by December 2009.

36 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 17 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: GENERAL GOVERNMENT (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS Crime Victims Compensation and Services Appropriations out of the Compensation to Victims of EST/BUD $0.0 $194.2 $0.0 $0.0 $194.2 Crime (CVC) Account No. 469 total $178.3 million which 2008–09 represents a decline of approximately $16 million as REC $0.0 $178.3 $0.0 $0.0 $178.3 compared to the 2008–09 biennium for agencies receiving 2010–11 funding out of the CVC Account. This decline is related to an increase in federal grant funding for victim claim BIENNIAL NA (8.2%) NA NA (8.2%) payments ($11.3 million) and a method of ﬁ nance swap CHANGE with Compensation to Victims of Crime Auxiliary fund No. 0494 ($5.0 million) to eliminate a projected deﬁ cit in the CVC Account.

Agencies receiving direct appropriations from the CVC Account include: the Offi ce of the Attorney General ($170.7 million—a decrease of $14.9 million) for direct payments to victims and victims’ services grants; the Texas Department of Criminal Justice ($3.2 million) for victim services; and the Employee Retirement System ($4.4 million—a decrease of $1.1 million) for payment of benefi ts to benefi ciaries of certain offi cers, fi refi ghters, and emergency medical technicians killed in the line of duty.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 37 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 17 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: GENERAL GOVERNMENT (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS AGENCY ISSUES TEXAS COMMISSION ON THE ARTS Grant Funding for Arts Organizations Increased funding of $2.7 million for grants to arts and EST/BUD $0.4 $1.1 $1.7 $1.3 $4.5 cultural organizations is due to the adoption of $3 million in 2008–09 general revenue (overall increase of $2.6 million) and an REC $3.0 $1.6 $1.6 $1.0 $7.2 increase of $0.5 million from the Arts Operating Account 2010–11 No. 334. This is offset by decreases of $0.1 million in federal funds and $0.3 million in interagency contracts for a BIENNIAL 650.0% 45.5% (5.9%) (23.1%) 60.0% one-time pass through grant awarded in ﬁ scal year 2008. CHANGE

OFFICE OF THE ATTORNEY GENERAL Child Support Services Increase in General Revenue Funds for child support EST/BUD $244.0 $0.0 $299.5 $12.4 $555.9 enforcement ($2.2 million) related to increases in indirect 2008–09 cost allocation ($1.4 million) and annualizing the 2 percent REC $246.2 $0.0 $299.5 $10.4 $556.1 salary increase ($0.8 million). These increases are offset 2010–11 by a decrease in Other Funds ($2.0 million) related to Interagency Contract revenue from the Health and Human BIENNIAL 0.9% NA 0.0% (16.1%) 0.0% Services Commission for child support enforcement CHANGE operations and business plan projects.

The agency anticipates collecting approximately $6.0 billion in child support payments in 2010–11 biennium, representing a 10 percent increase from 2008–09 collections of $5.4 billion.

38 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Crime Victims Services Funding to the Ofﬁ ce of the Attorney General for victim EST/BUD $5.9 $188.0 $41.7 $0.3 $235.9 related services increased by $14.7 million in All Funds, 2008–09 including a method of ﬁ nance swap of $15.0 million out of REC $11.2 $186.8 $52.4 $0.2 $250.6 the Compensation to Victims of Crime Auxiliary Account 2010–11 No. 494 as a substitute for funds out of the Victims of Crime (CVC) Account No. 469 appropriations. In addition, General BIENNIAL 89.8% (0.6%) 25.7% (33.3%) 6.2% Revenue funding increased by $5.3 million due to a CHANGE decrease of $1.7 million primarily related to a one-time cost incurred during the 2008–09 biennium, an increase of $3.0 million for the Court Appointed Special Advocate program, and $4.0 million for the Children’s Advocacy Centers program. Funding out of General Revenue–Dedicated Sexual Assault Program Account No. 5010 decreased by $1.2 million related to a reduction in grant funding for victim services. Federal Funds increased by $10.7 million representing additional grant funding from the U.S. Department of Justice for victim claim payments.

Legal Services Increased funding of $5.5 million in All Funds for legal EST/BUD $111.8 $1.3 $3.6 $44.2 $160.9 services primarily related to an increase of $5.1 million in 2008–09 Other Funds for recovered court costs and investigative REC $113.7 $0.5 $2.9 $49.3 $166.4 fees. 2010–11 These additional funds will be used during the 2010–11 BIENNIAL 1.7% (61.5%) (19.4%) 11.5% 3.4% biennium to retain legal staff and improve information CHANGE technology to increase the level and quality of legal services to the state.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 39 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

CANCER PREVENTION AND RESEARCH INSTITUTE OF TEXAS Agency Operations and Cancer Prevention and Research Grants Decrease of $6.6 million in General Revenue Funds EST/BUD $6.6 $0.0 $0.0 $0.0 $6.6 resulting from funding agency administrative costs, 2008–09 including 36 FTEs ($15.5 million) and cancer prevention REC $0.0 $0.0 $0.0 $600.0 $600.0 and research grants ($584.5 million) out of bond funds. 2010–11 BIENNIAL (100.0%) NA NA NA 8,990.9% CHANGE

COMPTROLLER OF PUBLIC ACCOUNTS Agency Operations Increase of $3.1 million in General Revenue Funds to EST/BUD $436.4 $0.0 $0.0 $4.2 $440.6 annualize the 2 percent salary increase. 2008–09 REC $439.5 $0.0 $0.0 $4.0 $443.5 2010–11 BIENNIAL 0.7% NA NA (4.8%) 0.7% CHANGE

40 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

FISCAL PROGRAMS – COMPTROLLER OF PUBLIC ACCOUNTS Mixed Beverage Tax Reimbursement Increase of $29.0 million in General Revenue Funds for EST/BUD $232.3 $0.0 $0.0 $0.0 $232.3 payments to counties for mixed beverage reimbursements 2008–09 resulting from growth in collections. REC $261.3 $0.0 $0.0 $0.0 $261.3 2010–11 BIENNIAL 12.5% NA NA NA 12.5% CHANGE

Unclaimed Property Program Decrease of $37.9 million in General Revenue Funds for EST/BUD $293.9 $0.0 $0.0 $0.0 $293.9 payments to the public for unclaimed property as a result 2008–09 of the agency’s outreach efforts in prior years which have REC $256.0 $0.0 $0.0 $0.0 $256.0 reduced the number of outstanding claims. 2010–11 BIENNIAL (12.9%) NA NA NA (12.9%) CHANGE

Oil Overcharge Program Increase of $13.1 million in Oil Overcharge receipts EST/BUD $0.0 $40.2 $0.0 $0.0 $40.2 (General Revenue–Dedicated Funds) for energy-related 2008–09 grants and loans due to additional revenue received REC $0.0 $53.3 $0.0 $0.0 $53.3 from interest earnings and loan repayments. Funding will 2010–11 primarily be used for fi nancing energy-effi cient retrofi ts for state agencies, public schools, hospitals, and other entities. BIENNIAL NA 32.6% NA NA 32.6% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 41 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Gross Weight and Axle Permit Fees Increase of $15.0 million in General Revenue Funds due to EST/BUD $0.0 $0.0 $0.0 $14.8 $14.8 a method of ﬁ nance swap with Other Funds (State Highway 2008–09 Fund No. 006) related to distribution of Gross Weight and REC $15.0 $0.0 $0.0 $0.0 $15.0 Axle permit fees to counties for maintenance of county 2010–11 roads and bridges. These appropriations were previously made to the Texas Department of Transportation. BIENNIAL NA NA NA (100.0%) 1.4% CHANGE

COMMISSION ON STATE EMERGENCY COMMUNICATIONS Funding out of the 911 Service Fees Account No. 5050 Increased funding of $12.5 million out of the 911 Service EST/BUD $0.0 $112.9 $0.0 $0.0 $112.9 Fees Account No. 5050 which is the primary funding source 2008–09 for 9-1-1 services. This increase reﬂ ects the adoption of REC $0.0 $125.4 $0.0 $0.0 $125.4 $18.6 million for the development and implementation of 2010–11 the Next Generation 9-1-1 System—which would provide Public Safety Answering Points the ability to receive text BIENNIAL NA 11.1% NA NA 11.1% messages, images and videos sent by the public—and CHANGE increased costs for maintenance of Wireless Phase II and subscriber growth ($3.8 million), which is offset by a reduction of $9.9 million in equipment replacement needs.

42 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Funding out of the Advisory Commission on Emergency Communications Account No. 5007 (Equalization Surcharge Account) Decreased funding of $3.9 million out of the Equalization EST/BUD $0.0 $38.5 $0.0 $0.0 $38.5 Surcharge Account which provides funding for regional 2008–09 poison control centers and supplements 911 Service Fees REC $0.0 $34.6 $0.0 $0.0 $34.6 (Account 5050) allocations to meet the 9-1-1 service needs 2010–11 of regional planning commissions. The net decrease of $3.9 million reﬂ ects completion of Wireless Phase II ($2.9 BIENNIAL NA (10.1%) NA NA (10.1%) million) and a reduction of $2.0 million which is no longer CHANGE needed to supplement 911 Service Fees appropriations. This is offset by the adoption of $1 million for additional poison control call takers and to fund administrative and public education costs at the Department of State Health Services, which operates the centers.

FACILITIES COMMISSION Construction and Renovations Decreased funding of $59.1 million in Other Funds EST/BUD $0.0 $0.0 $0.0 $149.5 $149.5 due primarily to a decrease of $46.0 million in General 2008–09 Obligation bond proceeds for deferred maintenance of REC $0.0 $0.0 $0.0 $90.4 $90.4 several state ofﬁ ce buildings, as well as a reduction of 2010–11 $12.5 million in Interagency Contracts for construction projects and project management fees. However, BIENNIAL NA NA NA (39.5%) (39.5%) appropriations do include $50.0 million in bond proceeds for CHANGE deferred maintenance during the 2010–11 biennium.

In addition, the recommendations include authority to carry forward unexpended balances for projects that were approved during the 2008–09 biennium.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 43 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Agency Operations and Capital Improvement Projects General Revenue funding increased by $9.2 million EST/BUD $57.1 $0.0 $0.0 $0.0 $57.1 due primarily to an increase in expenditures for utilities 2008–09 ($6.7 million); repairs of ﬁ re alarm and ﬁ re suppression REC $66.3 $0.0 $0.0 $0.0 $66.3 systems ($0.6 million); increase in data center costs ($0.3 2010–11 million); custodial contracts cost increases ($0.6 million); implementation of a leased parking program in state-owned BIENNIAL 16.1% NA NA NA 16.1% lots and garages ($0.1 million); and implementation of the CHANGE small contractor participation assistance program ($0.2 million).

Texas State Cemetery Included in the funding for the Texas Facilities Commission EST/BUD $1.0 $0.0 $0.0 $0.0 $1.0 is increased General Revenue funding for the Texas State 2008–09 Cemetery. The increase in funding is due to an increase in REC $1.5 $0.0 $0.0 $0.0 $1.5 operating expenses ($0.2 million), as well as renovations to 2010–11 the Texas State Cemetery’s visitor center and restoration of monuments and headstones ($0.3 million). BIENNIAL 50.0% NA NA NA 50.0% CHANGE

TEXAS PUBLIC FINANCE AUTHORITY Manage Bond Proceeds Increased funding of $4.8 million in General Revenue– EST/BUD $1.1 $0.0 $0.0 $0.7 $1.8 Dedicated Funds to align with the Comptroller’s Biennial 2008–09 Revenue Estimates for Revenue Bond Lease Payments REC $1.1 $4.8 $0.0 $0.7 $6.6 and the Master Lease Purchase Program. 2010–11 BIENNIAL 0.0% NA NA 0.05 266.7% CHANGE

44 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 17 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: GENERAL GOVERNMENT (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS FIRE FIGHTERS’ PENSION COMMISSIONER Contribution to Texas Emergency Services Retirement System (TESRS) Decreased funding of $8.3 million in General Revenue EST/BUD $9.9 $0.0 $0.0 $0.1 $10.0 Funds primarily due to the one-time appropriation of $8.8 2008–09 million to the Texas Emergency Services Retirement REC $1.6 $0.0 $0.0 $0.1 $1.7 (TESRS) Fund during 2008–09. This was offset by an 2010–11 increase in appropriations of $0.4 million in General Revenue Funds to fund another FTE for a pension BIENNIAL (83.8%) NA NA 0.0% (83.0%) specialist, shift pension-related accounting costs away from CHANGE the TESRS fund, and upgrade the agency’s website to make it compliant with the Americans with Disabilities Act.

TRUSTEED PROGRAMS WITHIN THE OFFICE OF THE GOVERNOR Agency Operations General Revenue. A reduction of $77.8 million mainly EST/BUD $210.4 $285.8 $172.0 $61.8 $730.0 reﬂ ecting the discontinuation of the General Revenue 2008–09 transfer of $75 million to the Emerging Technology Fund REC $132.6 $359.0 $101.9 $7.4 $600.9 and a decrease of $5.6 million in estimated revenue from 2010–11 hotel occupancy tax. BIENNIAL (37.0%) 25.6% (40.8%) (88.0%) (17.7%) General Revenue–Dedicated. An increase of $73.2 CHANGE million mainly due to an increase in estimated revenue and unexpended balances for the Texas Enterprise Fund ($32.0 million) and the Texas Emerging Technology Fund ($41.5 million).

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 45 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Federal Funds. A reduction of $70.1 million in Federal Funds, mainly consisting of $37.7 million in Crime Victim Assistance grants, $19.1 million out of the Edward Byrne Memorial Justice Assistance grants, and $6.5 million out of the Safe and Drug-free Schools and Communities grants. Other Funds. A reduction of $54.4 million mainly associated with the spend down of available account balances in the Small Business Incubator Fund ($22.4 million) and the Texas Product Development Fund ($30.0 million).

Full-Time-Equivalent (FTE) Positions. The recommendations include an increase of 8 FTEs reﬂ ecting those that are fully-federally funded. These positions are allocated to strategies A.1.3, Criminal Justice (1), and A.1.11, Homeland Security (7).

HISTORICAL COMMISSION Courthouse Preservation Decreased funding of $16.8 million, primarily from the EST/BUD $0.9 $0.0 $0.0 $59.5 $60.4 expenditure of general obligation bond proceeds ($59.5 2008–09 million) in 2008–09 to award grants for courthouse repair REC $1.1 $0.0 $0.0 $42.5 $43.6 and renovation offset by unexpended balances of $2.5 2010–11 million in ﬁ scal year 2010 and adoption of an additional $40 million in G.O. bond proceeds, which will complete BIENNIAL 25.6% NA NA (28.6%) (27.8%) the restoration of 7 to 9 courthouses in 2010–11. Since the CHANGE program began in ﬁ scal year 2000, the Commission has assisted with the restoration and preservation of 68 county courthouses.

46 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Heritage Trails Program Increased funding of $2.7 million for the Texas Heritage EST/BUD $0.0 $0.0 $0.0 $3.1 $3.1 Trails program due to the adoption of $0.7 million in 2008–09 sporting goods sales tax (general revenue) which will allow REC $0.7 $0.0 $0.0 $5.1 $5.8 the agency to match additional federal funds transferred 2010–11 from TxDOT ($2 million). The Texas Heritage Trails program promotes tourism to 10 heritage regions of the state by BIENNIAL NA NA NA 64.5% 87.1% providing technical, marketing and ﬁ nancial assistance. CHANGE

Historic Sites Increased funding of $0.2 million in All Funds is primarily EST/BUD $18.9 $0.0 $0.0 $0.1 $18.9 from unexpended balances of revenue bond proceeds for 2008–09 the National Museum of the Pacifi c War ($940,000). The REC $18.1 $0.0 $0.0 $1.0 $19.1 Historical Commission operates and maintains 18 historic 2010–11 sites transferred from the Parks and Wildlife Department in January 2008 as well as the Sam Rayburn House Museum BIENNIAL (4.1%) NA NA 900.0% 1.1% and the National Museum of the Pacifi c War. In fi scal year CHANGE 2008, an estimated 175,586 individuals were reached by educational and interpretive programs at or associated with these sites.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 47 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

DEPARTMENT OF INFORMATION RESOURCES Indirect Administration Increased funding of $7.4 million in All Funds mainly due to EST/BUD $0.3 $0.0 $0.0 $11.8 $12.1 the following: 2008–09 REC $0.6 $0.0 $0.0 $18.9 $19.5 • increase of $5.0 million in Other Funds (Interagency 2010–11 Contracts and Appropriated Receipts) for three new information technology related capital budget projects, BIENNIAL 100.0% NA NA 17.8% 19.8% include a Financial Systems Enhancement ($3.0 CHANGE million), Communication and Collaboration Infrastructure and Integration Support Tool ($1.5 million), and Standardization of Business Intelligence Platform ($0.5 million); • increase in expenditures of Other Funds for the agency’s participation in the Data Center Services contract ($0.8 million); continuation of funding for two capital budget projects ($0.3 million); and reallocation of 16 administrative and executive staff and related operating costs previously in other strategies ($2.0 million). These increases are offset by a decrease of $1.0 million for one-time costs for hosted performance management tools; • reallocation of General Revenue Funds ($0.3 million) from Strategy B.2.2, TexasOnline funding for indirect costs associated with the administration of the TexasOnline project.

48 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Telecommunications Decreased funding of $1.9 million in All Funds primarily EST/BUD $0.0 $0.0 $0.3 $149.6 $149.9 due to decreases for one-time expenditures related to 2008–09 the Health and Human Services Integrated Eligibility REC $0.0 $0.0 $0.0 $148.0 $148.0 and Enrollment network ($12.5 million); installation and 2010–11 equipment costs to connect to the Lonestar Education and Research Network ($4.4 million) to provide data center BIENNIAL NA NA (100.0%) (1.1%) (1.3%) services; and $0.3 million in Federal Funds for a one-time CHANGE grant for a statewide cyber security testing program.

These amounts are offset by the appropriation of available revenue in the Telecommunication Revolving Fund Account ($7.5 million); procurement costs related to the new TEX-AN contract ($4.4 million); and network security and monitoring ($3.4 miiion).

Contract Administration of Information Technology Commodities and Services Increased funding of $5.1 million in Other Funds EST/BUD $0.0 $0.0 $0.0 $10.3 $10.3 (Interagency Contracts and Appropriated Receipts) 2008–09 primarily due to the appropriation of available balances in REC $0.0 $0.0 $0.0 $15.4 $15.4 the DIR Clearing Fund Account ($2.1 million), acquisition of 2010–11 procurement tools and software ($2.0 million), and salaries and operating costs related to the reallocation of nine BIENNIAL NA NA NA 49.5% 49.5% contract managers from other strategies ($1.0 million). CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 49 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

LIBRARY AND ARCHIVES COMMISSION Loan Star Libraries and Texas Library System Grants Increase of $2.8 million for the agency’s two largest grant EST/BUD $11.9 $0.0 $9.0 $0.0 $20.8 programs for local libraries is primarily due to the increase 2008–09 of $3.3 million in general revenue, which includes the REC $15.2 $0.0 $8.4 $0.0 $23.6 adoption of $3.9 million for Loan Star Libraries and Texas 2010–11 Library System programs. This is offset by a decrease of $0.6 million in federal funds. Loan Star Libraries grants are BIENNIAL 28.3% NA (6.9%) NA 13.1% awarded to public libraries for the enhancement of services. CHANGE Texas Library System grants provide continuing education and consulting services to member libraries and fund additional activities based on statewide goals and regional initiatives.

PENSION REVIEW BOARD Agency Operations Contingent on passage of Senate Bill 1548, or similar EST/BUD $1.4 $0.0 $0.0 $0.1 $1.5 legislation, increased funding of $2 million in General 2008–09 Revenue Funds and 11 additional FTEs to expand the REC $3.4 $0.0 $0.0 $0.0 $3.4 agency’s oversight duties to include public investments as 2010–11 well as public pension plans. Should legislation not pass, all agency appropriations would be eliminated. BIENNIAL 142.9% NA NA (80.0%) 128.0% CHANGE

50 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

STATE PRESERVATION BOARD Agency Operations Decreased funding of $2.7 million in General Revenue EST/BUD $25.5 $0.0 $0.0 $0.1 $25.6 funds primarily due to completion of the Capitol Security 2008–09 project ($3.3 million), which is offset by increases of $0.5 REC $22.8 $0.0 $0.0 $0.1 $22.9 million for repair and replacement of building infrastructure 2010–11 and $0.2 million for on-going maintenance of Capitol Security. BIENNIAL (10.6%) NA NA 0.0% (10.5%) CHANGE

STATE OFFICE OF RISK MANAGEMENT Administration of Workers’ Compensation Program Continued funding at approximately the 2008–09 EST/BUD $7.5 $0.0 $0.0 $9.0 $16.5 level, with a method of ﬁ nance swap of $7.5 million in 2008–09 Interagency Contract funds for General Revenue Funds REC $0.0 $0.0 $0.0 $17.8 $17.8 for administrative costs related to workers’ compensation 2010–11 program. BIENNIAL (100.0%) NA NA 97.8% 7.9% Increased funding of $0.5 million, including 4.0 FTEs, CHANGE to carry out the provisions of Senate Bill 908, Eightieth Legislature, Regular Session.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 51 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

WORKERS’ COMPENSATION Workers’ Compensation Payments Increased funding of $7.3 million in All Funds ($7.5 million EST/BUD $0.0 $0.0 $0.0 $90.9 $90.9 in Interagency Contracts offset by a decrease of $0.2 2008–09 million in Subrogation Receipts) primarily for anticipated REC $0.0 $0.0 $0.0 $98.1 $98.1 increases in medical costs and indemnity payments related 2010–11 to higher medical reimbursement and indemnity rates set by the Texas Department of Insurance. BIENNIAL NA NA NA 7.9% 7.9% CHANGE

SECRETARY OF STATE Elections Administration Decreased funding of $1.0 million in General Revenue EST/BUD $7.9 $0.0 $0.0 $0.6 $8.5 Funds due to a one-time appropriation for a special election 2008–09 held relating to property tax relief in May 2007. Most of the REC $8.9 $0.0 $0.0 $0.6 $9.5 original appropriation of $5 million was spent in fi scal year 2010–11 2007 to reimburse counties. BIENNIAL 12.7% NA NA 0.0% 11.8% In addition, contingent upon passage of Senate Bill 362 CHANGE by the Eighty-fi rst Legislature, or similar legislation relating to requiring a voter to present proof of identifi cation, $2.0 million is appropriated for voter education.

52 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Election / Voter Registration Funds Increased funding of $1.3 million in General Revenue EST/BUD $14.9 $0.0 $0.0 $0.0 $14.9 Funds mainly due to raising the hourly rate paid to poll 2008–09 workers working primary and runoff elections from $7 to $9 REC $16.2 $0.0 $0.0 $0.0 $16.2 per hour totaling $1.3 million. 2010–11 BIENNIAL 8.7% NA NA NA 8.7% CHANGE

Elections Improvement Decreased funding of $12.3 million in All Funds due to a EST/BUD $0.0 $13.8 $42.6 $0.0 $56.4 decrease in the amount of funds available for expenditure 2008–09 on Help America Vote Act (HAVA) activities which includes REC $0.0 $4.0 $40.1 $0.0 $44.1 decreases of $2.5 million in Federal Funds and $9.8 million 2010–11 in General Revenue–Dedicated Funds. BIENNIAL NA (71.0%) (5.9%) NA (21.8%) The recommendations include $44.1 million for HAVA; CHANGE mainly Federal Funds, which will be used for equipment that meets voting systems standards; provisional voting; statewide voter registration list; and voting information for election ofﬁ cials, poll workers, election volunteers, and the public.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 53 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

VETERANS COMMISSION Agency Operations Increased funding of $4.5 million in General Revenue EST/BUD $9.7 $0.0 $22.3 $0.0 $32.0 Funds related to an increase of $2.2 million offset by a 2008–09 reduction of Federal Funds related to reclassifi cation of REC $14.2 $0.0 $19.8 $0.0 $34.0 Federal Funds to General Revenue Funds to comply with 2010–11 the Comptroller’s policy related to Federal Funds earned on cost allocation plan; an increase of $1.0 million to expand BIENNIAL 46.4% NA (11.2%) NA 6.3% assistance for benefi t claims to veterans and their families; CHANGE an increase of $0.7 million to expand employment and educational opportunities for veterans and their spouses; and an increase of $0.6 million for additional outreach and marketing efforts to make veterans and family members aware of services offered at the Veterans Commission and possible benefi ts from the Federal government related to military service.

54 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD HEALTH AND HUMAN SERVICES 2010–11 BIENNIAL RECOMMENDATIONS

All Funds recommendations for Health from the 2008–09 biennium (Table 19). A favorable federal match in ﬁ scal year and Human Services total $60.4 billion for less favorable federal match for Medicaid 2009, the veto of ﬁ scal year 2009 funds the 2010–11 biennium, an increase of $5.9 and related programs accounts for $499.4 for Medicare Give Back, and higher than billion, or 10.7 percent, from the 2008–09 million of the biennial General Revenue anticipated expenditures in the Medicaid biennium (Table 18). Funds increase. program. For General Revenue and General Funding for the 2008–09 biennium Selected performance measures for agencies Revenue–Dedicated Funds, the includes $758.5 million in General in the Health and Human Services recommendations total $25.7 billion, an Revenue Funds to address estimated function are depicted in Table 20. increase of $3.2 billion, or 14.3 percent, supplemental needs, including a less

TABLE 18 ALL FUNDS: HEALTH AND HUMAN SERVICES IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Department of Aging and Disability Services $11,713.0 $12,391.9 $678.9 5.8% Department of Assistive and Rehabilitative Services 1,193.6 1,248.5 54.9 4.6 Department of Family and Protective Services 2,551.0 2,638.2 87.2 3.4 Department of State Health Services 5,637.9 5,729.2 91.3 1.6 Health and Human Services Commission 32,764.3 37,055.0 4,290.7 13.1 Subtotal, Health and Human Services $53,859.9 $59,062.9 $5,203.0 9.7%

Retirement and Group Insurance $909.9 $1,040.9 $131.0 14.4% Social Security and Beneﬁ t Replacement Pay 311.0 325.6 14.6 4.7 Subtotal, Employee Beneﬁ ts $1,220.9 $1,366.5 $145.5 11.9%

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 55 HEALTH AND HUMAN SERVICES 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 18 ALL FUNDS: HEALTH AND HUMAN SERVICES (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Bond Debt Service Payments $57.7 $61.8 $4.1 7.0% Lease Payments 13.3 13.9 0.6 4.7 Subtotal, Debt Service $71.0 $75.6 $4.7 6.6%

Article II, Special Provisions $0.0 $518.8 $518.8 NA

Less Interagency Contracts $609.7 $630.7 $21.0 3.4%

Total Article II – Health and Human Services $54,542.0 $60,393.1 $5,851.1 10.7%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

56 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD HEALTH AND HUMAN SERVICES 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 19 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: HEALTH AND HUMAN SERVICES IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Department of Aging and Disability Services $4,726.0 $5,182.4 $456.4 9.7% Department of Assistive and Rehabilitative Services 231.1 248.1 17.0 7.4 Department of Family and Protective Services 1,043.1 1,116.1 73.0 7.0 Department of State Health Services 2,849.8 2,938.8 89.0 3.1 Health and Human Services Commission 12,874.8 15,315.2 2,440.3 19.0 Subtotal, Health and Human Services $21,724.8 $24,800.5 $3,075.7 14.2%

Retirement and Group Insurance $507.0 $582.5 $75.5 14.9% Social Security and Beneﬁ t Replacement Pay 167.9 176.7 8.8 5.2 Subtotal, Employee Beneﬁ ts $674.9 $759.2 $84.2 12.5%

Bond Debt Service Payments $52.4 $56.5 $4.1 7.9% Lease Payments 13.3 13.9 0.6 4.7 Subtotal, Debt Service $65.6 $70.4 $4.7 7.2%

Article II, Special Provisions $0.0 $51.5 $51.5 NA

Total Article II – Health and Human Services $22,465.4 $25,681.6 $3,216.2 14.3%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 57 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 20 SELECTED PERFORMANCE MEASURES: HEALTH AND HUMAN SERVICES ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011 DEPARTMENT OF AGING AND DISABILITY SERVICES Average Number of Clients Served Per Month: Medicaid 110,584 112,801 116,299 119,791 Non-waiver Community Services and Supports (Community Care Entitlement)

Average Number of Clients Served Per Month: Waivers Continuing Clients 46,256 47,946 50,101 50,101 Expansion Clients 0 0 1,805 5,380 Total, All Waiver Clients (Average Monthly) 46,256 47,946 51,906 55,481

Number of Clients Served (End of Year): Waivers Continuing Clients NA 50,101 50,101 50,101 Expansion Clients NA 0 4,928 9,857 Total, All Waiver Clients (End of Year) NA 50,101 55,029 59,958

Average Monthly Caseload, Nursing Facility Clients 68,905 69,128 69,479 69,908 (Medicaid, Medicare Copaid, and Hospice)

Average Number of Persons in ICF/MR Medicaid Beds 6,444 6,286 6,233 6,233 Per Month

Average Monthly Number of Mental Retardation (MR) 4,834 4,735 4,637 4,539 Campus Residents (State Schools)

58 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 20 SELECTED PERFORMANCE MEASURES: HEALTH AND HUMAN SERVICES (CONTINUED) ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

DEPARTMENT OF ASSISTIVE AND REHABILITATIVE SERVICES Average Monthly Number of Children Served in 27,693 29,331 30,431 31,530 Comprehensive Services (Early Childhood Intervention)

Number of Consumers Served (Vocational Rehabilitation 9,698 9,564 9,608 9,608 for Persons Who Are Blind or Visually Impaired)

Number of Consumers Served (Vocational Rehabilitation 84,433 82,581 88,024 88,024 for Persons with Disabilities)

Average Monthly Number of People Receiving 184 185 185 185 Comprehensive Rehabilitation Services

DEPARTMENT OF FAMILY AND PROTECTIVE SERVICES Number of Completed Child Protective Services 165,010 164,735 167,933 171,137 Investigations

Average Number of Children Served in Family Protective 17,073 16,186 16,065 16,289 Services-paid Foster Care per Month

Average Number of Children Provided Adoption Subsidy 24,906 27,477 29,970 32,385 Per Month Average Number of STAR Youth Served per Month 5,875 6,209 6,209 6,209

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 59 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 20 SELECTED PERFORMANCE MEASURES: HEALTH AND HUMAN SERVICES (CONTINUED) ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

Number of Completed Adult Protective Services 68,683 70,975 73,534 76,190 Investigations

DEPARTMENT OF STATE HEALTH SERVICES Number of Vaccine Doses Administered to Children 12,771,928 13,501,907 14,177,002 14,885,852

Number of CSHCN Clients Receiving Medical Services 2,248 2,248 2,600 2,600

Number of WIC Participants Provided Nutritious Food 997,671 1,029,121 1,031,671 1,038,471 Supplements Per Month

Average Monthly Number of Adults Served in Treatment 5,224 6,013 6,013 6,013 Programs for Substance Abuse

Average Monthly Number of Youth Served in Treatment 747 934 934 934 Programs for Substance Abuse

Average Daily Census of State Mental Health Facilities 2,339 2,477 2,477 2,477 (State Hospitals)

HEALTH AND HUMAN SERVICES COMMISSION Average Medicaid and CHIP Children Recipient Months 2,412,944 2,486,797 2,542,357 2,593,876 Per Month

Average Medicaid Acute Care (Includes STAR+PLUS) 2,873,455 2,892,023 2,950,910 3,017,673 Recipient Months Per Month

60 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 20 SELECTED PERFORMANCE MEASURES: HEALTH AND HUMAN SERVICES (CONTINUED) ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

Average Aged and Medicare-eligible Recipient Months 82,258 83,652 85,232 86,817 Per Month: STAR+PLUS

Average Disabled and Blind Recipient Months Per 72,207 76,227 79,706 82,762 Month: STAR+PLUS

Total Medicaid Prescriptions Incurred 27,861,854 28,353,818 29,121,060 29,920,516

Average CHIP Programs Recipient Months Per Month 442,548 522,933 546,024 557,508

Average Number of TANF Recipients Per Month 121,104 107,970 104,886 104,886

Average Number of State Two-parent Cash Assistance 4,463 3,685 3,441 3,441 Recipients Per Month

Number of Women and Children Served (Family 74,801 77,583 89,891 89,891 Violence Services)

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 61 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 21 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: HEALTH AND HUMAN SERVICES IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS MULTI-AGENCY ISSUES Medicaid Increased funding of $5,265.5 million in All Funds ($2,758.7 EST/BUD $16,145.5 $125.3 $23,747.8 $278.9 $40,297.4 million in General Revenue and General Revenue– 2008-09 Dedicated Funds) primarily for the following items: REC $18,905.6 $123.8 $26,347.4 $186.0 $45,562.9 2010–11 • Maintain rates at ﬁ scal year 2009 levels and address projected caseload growth ($2,329 million All Funds, BIENNIAL 17.1% (1.2%) 10.9% (33.3%) 13.1% $1,053.8 million General Revenue Funds) CHANGE

• Address less favorable federal match ($481 million General Revenue Funds)

• Address cost growth ($1,823.3 million All Funds, $750 million General Revenue Funds)

• Increase Community Care attendant wages and health care provider rates at DADS, DFPS, DSHS, and HHSC ($738.4 million All Funds, $309.5 General Revenue Funds)

• Achieve cost savings ($260.8 million All Funds, $107.1 million General Revenue Funds)

62 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

• Expand and reshape the system of care for individuals with developmental disabilities (contingency appropriation of $487 million All Funds, $200 million in General Revenue Funds in Special Provisions Sec. 48)

• Implement state school reforms (contingency appropriation of $29.8 million All Funds, $16.3 General Revenue Funds in Special Provisions Sec. 53)

Caseload Assumptions Acute Care Medicaid caseloads are anticipated to grow from 2,892,023 in ﬁ scal year 2009 to 3,017,673 in ﬁ scal year 2011. More than two-thirds of clients are children.

Nursing facility caseloads (including Medicaid, Medicare Copay, and Hospice) are projected to increase slightly by 780 clients from 69,128 in ﬁ scal year 2009 to 69,908 in ﬁ scal year 2011.

Community Care Entitlement caseloads are anticipated to increase from 110,584 in ﬁ scal year 2009 to 119,791 in ﬁ scal year 2011.

The number of Community-based (Waiver) clients established for ﬁ scal year 2011 is 50,101. When adjusted for expansions funded in Special Provisions and HHSC, average waiver caseloads increase to 57,528.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 63 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Enterprise Items Increased funding of $809.4 million, including $351.1 EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 million in General Revenue Funds and $458.3 million in 2008-09 Federal Funds, for items that affect all health and human REC $351.1 $0.0 $458.3 $0.0 $809.4 service agencies. The items include: 2010–11 • IT Accessibility (related to ADA compliance): $3.0 BIENNIAL NA NA NA NA NA million in General Revenue and All Funds; affects CHANGE DARS, DFPS, DSHS and HHSC.

• Increase Capacity of HHS Community Services: $31.1 million in General Revenue and $52.9 million in All Funds; affects programs at DARS, DADS, DSHS and HHSC.

• Maintain IT Services provided by the Department of Information Resources: $7.5 million in General Revenue and $15.1 million in All Funds; affects all health and human service agencies.

• Provider (One-Time) Rate Increases: $309.5 million in General Revenue and $738.4 million in All Funds; affects DADS, DFPS, DSHS and HHSC. This item includes (1) $129.5 million in General Revenue and $293.2 million in All Funds for hourly wage increases for community attendants; (2) $180.0 million in General Revenue and $445.2 million in All Funds for healthcare provider rate increases.

64 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 21 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: HEALTH AND HUMAN SERVICES (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS AGENCY ISSUES DEPARTMENT OF AGING AND DISABILITY SERVICES A less favorable federal match (FMAP) for Medicaid Services, included below, totals an increase of $124.7 million in General Revenue Funds. Intake, Access and Eligibility Includes $9.2 million in All Funds, $3.1 million in General EST/BUD $118.3 $0.0 $176.7 $3.6 $298.6 Revenue Funds and General Revenue–Dedicated Funds, 2008–09 to maintain 2009 stafﬁ ng and average salary levels. REC $128.2 $0.0 $176.3 $3.4 $307.8 2010–11 BIENNIAL 8.4% NA (0.3%) (6.0%) 3.1% CHANGE

Community Care Entitlement (Medicaid) An increase of $177.7 million in All Funds, including $101.9 EST/BUD $726.0 $0.0 $1,077.8 $0.0 $1,803.7 million in General Revenue Funds to address projected 2008–09 caseload growth, maintain average fi scal year 2009 costs, REC $827.8 $0.0 $1,153.6 $0.0 $1,981.4 and adjust for a less favorable federal match. The Average 2010–11 Number of Clients Served Per Month will increase from 110,584 in fi scal year 2008 to 116,299 in fi scal year 2010. BIENNIAL 14.0% 0.0% 7.0% NA 9.9% Caseloads are expected to increase in fi scal year 2011, CHANGE achieving 119,791.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 65 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Community Care Waivers (Medicaid) An increase of $230.1 million in All Funds, including EST/BUD $963.4 $0.0 $1,430.2 $0.0 $2,393.6 $130.4 million in General Revenue Funds, primarily to 2008–09 maintain estimated August 2009 client levels (50,101) and REC $1,093.8 $0.0 $1,529.9 $0.0 $2,623.7 maintain ﬁ scal year 2009 average costs. When adjusted 2010–11 for expansions funded in Special Provisions and HHSC, average waiver caseloads increase to 57,528 in ﬁ scal year BIENNIAL 13.5% 0.0% 7.0% NA 9.6% 2011. Waiver services provide medical care and personal CHANGE assistance to clients in home or community settings. Anticipated caseloads for key programs are highlighted in Table 20.

Program of All-Inclusive Care for the Elderly (PACE) An increase of $0.2 million in All Funds, including $1.0 EST/BUD $23.9 $0.0 $36.0 $0.0 $59.9 million in General Revenue Funds, for updated caseloads, 2008–09 to continue the provider rate increase approved for REC $27.7 $0.0 $39.1 $0.0 $66.9 2008–09, and a less favorable FMAP. 2010–11 An increase of $6.8 million in All Funds, including $2.8 BIENNIAL 16.0% 0.0% 8.8% NA 11.7% million in General Revenue Funds, for additional slots for CHANGE the PACE site in Lubbock.

66 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 21 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: HEALTH AND HUMAN SERVICES (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS Nursing Facility and Hospice Payments (Medicaid) An increase of $194.3 million in All Funds, including $154.1 EST/BUD $1,841.0 $0.0 $2,751.6 $0.0 $4,592.6 million in General Revenue Funds, for projected caseloads 2008–09 and to continue the provider rate increase approved REC $1,997.1 $0.0 $2,797.9 $0.0 $4,795.0 for 2008–09. Recommendations also adjust for a less 2010–11 favorable FMAP. BIENNIAL 8.5% 0.0% 1.7% NA 4.4% An increase of $8.1 million in All Funds, including $2.0 CHANGE million in General Revenue Funds, for SAS/CARE Consolidation information technology modiﬁ cation.

Medicaid Nursing Facility caseloads are expected to decline modestly from 56,170 in fi scal year 2008 to 55,327 in fi scal year 2011. Medicaid/Medicare Copaid Nursing Facility caseloads are expected to grow from 6,708 in fi scal year 2008 to 7,669 in fi scal year 2011; Hospice caseloads are expected to grow from 6,027 in fi scal year 2008 to 6,912 in fi scal year 2011.

Intermediate Care Facilities-Mental Retardation (Medicaid) A decrease of $15.0 million in All Funds, including an EST/BUD $225.7 $49.5 $414.1 $0.1 $689.4 increase of $1.1 million in General Revenue Funds to 2008–09 reﬂ ect lower caseloads. Recommendations also adjust REC $226.9 $53.1 $394.4 $0.1 $674.5 for a less favorable FMAP and maintain 2009 costs. The 2010–11 increase in General Revenue–Dedicated Funds represents the full appropriation of anticipated balances and collections BIENNIAL 0.5% 7.3% (4.8%) 0.0% (2.2%) for the Quality Assurance Fund. CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 67 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Mental Retardation State Schools Services (Medicaid) An increase of $55.6 million in All Funds, including an EST/BUD $377.9 $58.7 $583.7 $54.1 $1,074.3 increase of $38.2 million in General Revenue Funds and 2008–09 General Revenue–Dedicated Funds to maintain the 2009 REC $424.4 $52.0 $602.7 $53.7 $1,132.8 staffi ng and salary increase for state workers, adjust for a 2010–11 less favorable FMAP, and for a slight decline in caseloads. Caseloads are expected to decline from 4,834 in fi scal year BIENNIAL 12.3% (11.4%) 3.3% (0.8%) 5.4% 2008 to 4,735 in fi scal year 2009, and to 4,539 in 2011. CHANGE

An additional increase of $2.9 million in All Funds, including $1.3 million in General Revenue Funds, for State School Communication (telephone system upgrade) information technology project. Special Provisions, Sec. 48 provides an additional (contingency) appropriation of $487 million in All Funds, including $200 million in General Revenue, to DADS for the expansion of home and community-based programs, which waive off institutional settings for persons with mental retardation. The rider provides speciﬁ c direction related to reshaping the system of care for persons with mental retardation: a reduction in the wait time for community based services, an increase in community slots by August 2011, and a limitation on state school census.

Licensing, Certifi cation and Outreach A decrease of $0.3 million in All Funds, including a $2.0 EST/BUD $42.5 $3.8 $91.2 $3.1 $140.6 million increase in General Revenue–Related Funds for 2008–09 maintaining staffi ng and salary adjustments at fi scal year REC $44.5 $3.9 $88.9 $3.1 $140.3 2009 levels. Decrease in Federal Funds is due to less 2010–11 favorable FMAP. BIENNIAL 4.6% 0.0% (2.5%) 0.1% (0.2%) CHANGE

68 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Indirect Administration A net decrease of $10.2 million in All Funds, including a EST/BUD $55.9 $0.0 $82.1 $4.3 $142.3 decrease of $0.8 million in General Revenue Funds, for 2008–09 administrative activities: REC $55.1 $0.0 $73.1 $3.9 $132.1 2010–11 • An increase of $2.0 million in All Funds ($1.0 million in General Revenue Funds) to maintain the 2009 salary BIENNIAL (1.3%) 0.0% (11.0%) (10.1%) (7.1%) increase and stafﬁ ng levels. CHANGE

• A reduction of $5.5 million in All Funds ($2.1 million in General Revenue Funds) for a one-time capital project.

• An increase of $0.6 million in All Funds, including $0.3 million in General Revenue Funds, for Data Encryption and Security information technology project.

Capital A carry forward of unused bond authority from ﬁ scal years EST/BUD $0.3 $0.6 $0.0 $17.6 $18.5 2008–09 of $29.6 million. 2008–09 REC $0.3 $0.6 $0.0 $29.6 $30.4 2010–11 BIENNIAL 0.0% 0.0% NA 68.1% 64.9% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 69 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Enterprise Initiative: Increase capacity of HHS-Funded Community Services Funding is included at the Health and Human Service Commission in the amount of $22.4 million in All Funds, with $10.7 million in General Revenue Funds, and to serve an additional 1,927 individuals by the end of the biennium in the following strategies at the Department of Aging and Disability Services: Community Based Alternatives, Medically Dependent Children’s Program, Non-Medicaid Services, and the In-Home and Family Support program.

Enterprise Initiative: Community Care Services Rate Increase Funding is included at the Health and Human Service Commission in the amount of $269.7 million in All Funds, with $119.1 million in General Revenue, to pay for increases in Community Care attendant wages and associated payroll taxes in the following strategies at the Department of Aging and Disability Services: A.2.1, Primary Home Care, A.2.2, Community Attendant Services, A.2.3, Day Activity and Health Services, A.3.1, Community-Based Alternatives, A.3.5, Medically Dependent Children, A.3.6, Consolidated Waiver Program, and A.4.1, Non-Medicaid Services.

70 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

DEPARTMENT OF ASSISTIVE AND REHABILITATIVE SERVICES Goal A: Children With Disabilities (Strategies A.1.1 to A.3.1) Increased funding of $25.1 million in All Funds, including EST/BUD $70.7 $0.0 $217.9 $33.1 $321.8 a $11.3 million increase in General Revenue Funds 2008–09 and a $13.8 million increase in Federal Funds, primarily REC $82.0 $0.0 $231.7 $33.1 $346.9 for anticipated caseload growth in the Early Childhood 2010–11 Intervention (ECI) program and to serve additional children in the autism and blind children’s programs. It is anticipated BIENNIAL 16.0% NA 6.3% 0.0% 7.8% that the Average Monthly Number of Children Served in CHANGE ECI Comprehensive Services will increase by 3,837 from 27,693 in ﬁ scal year 2008 to 31,530 in ﬁ scal year 2011.

Article XII of this Act appropriates to DARS $39.4 million in Individuals with Disabilities Education Act (IDEA) Part C Stimulus funds for increases in the ECI provider reimbursement amounts.

Goal B: Rehabilitation Services-Blind (Strategies B.1.1 to B.1.5) Net decrease of $2.2 million in General Revenue Funds EST/BUD $18.1 $7.8 $83.4 $0.1 $109.3 and General Revenue–Dedicated Funds, for services 2008–09 for persons who are blind or visually impaired, due to REC $18.4 $5.3 $83.4 $0.0 $107.1 fi scal years 2008–09 totals including a one-time partial 2010–11 distribution of the dedicated fund to the Business Enterprises of Texas (BET) managers. The Number of BIENNIAL 1.5% (32.1%) 0.0% (33.3%) (2.1%) Consumers Served in the Vocational Rehabilitation (VR) CHANGE Blind program is expected to increase by 44 from 9,564 in fi scal year 2009 to 9,608 in fi scal year 2011.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 71 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Goal B: Rehabilitation Services-General (Strategies B.2.1 to B.3.4) Net increase of $8.4 million in All Funds, including a $7.4 EST/BUD $101.4 $22.8 $351.8 $4.0 $480.0 million increase in General Revenue Funds and General 2008–09 Revenue–Dedicated Funds, for rehabilitative Vocational REC $107.7 $23.9 $353.4 $3.4 $488.4 Rehabilitation (VR) and other services for persons with 2010–11 general disabilities. The Number of Consumers Served in the VR-General program is anticipated to increase by 5,443 BIENNIAL 6.3% 4.8% 0.4% (15.1%) 1.8% from 82,581 in ﬁ scal year 2009 to 88,024 in ﬁ scal year CHANGE 2011.

Goal C: Disability Determination (Strategy C.1.1) Increased funding of $23.5 million in Federal Funds for EST/BUD $0.0 $0.0 $230.1 $0.0 $230.1 projected caseload growth at a rate of 3 percent per fi scal 2008–09 year. It is anticipated that the Number of Disability Cases REC $0.0 $0.0 $253.6 $0.0 $253.6 Determined will increase by 17,908 from 289,612 in fi scal 2010–11 year 2009 to 307,520 in fi scal year 2011. Additionally, full- time-equivalent positions for this strategy are expected to BIENNIAL NA NA 10.2% NA 10.2% increase by 30.8 in fi scal year 2010 and 62.5 in fi scal year CHANGE 2011 above the fi scal year 2009 level to cover increased caseload. The Disability Determination function at DARS helps to determine eligibility for federal Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) benefi ts.

72 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Enterprise Initiatives: Increase capacity of HHS-Funded Community Services Funding is included at the Health and Human Service Commission in the amount of $3.3 million in General Revenue Funds and All Funds for waiting lists for Comprehensive Rehabilitation Services (CRS) and Independent Living Services (ILS) at DARS.

Enterprise Initiatives: IT Accessibility for ADA Compliance Funding is included at the Health and Human Service Commission in the amount of $3.0 million in General Revenue Funds and All Funds for IT Accessibility for Health and Human Service (HHS) agencies, which DARS will be facilitating for all HHS agencies. Of this amount, $0.4 million is for DARS.

Enterprise Initiatives: Maintain IT Services for HHS Agencies Provided by DIR Funding is included at the Health and Human Service Commission in the amount of $2.0 million in All Funds for the agency to meet current obligations for data centers.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 73 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

DEPARTMENT OF FAMILY AND PROTECTIVE SERVICES Statewide Intake Services Increased funding of $1.6 million in All Funds is due EST/BUD $5.4 $0.0 $27.2 $0.0 $32.6 primarily to annualizing 26 positions added in 2009 and 2008–09 maintaining the 2 percent employee pay raise. Most of the REC $6.5 $0.0 $27.7 $0.0 $34.2 increase is from General Revenue Funds. 2010–11 BIENNIAL 20.4% NA 1.8% NA 4.9% CHANGE

Child Protective Services Staff Increased funding of $40.0 million in All Funds is due EST/BUD $335.2 $0.0 $535.1 $10.4 $880.7 primarily to annualizing 312 caseworkers and related direct 2008–09 delivery staff added by CPS Reform Continued in 2009; REC $373.7 $0.0 $535.9 $11.1 $920.7 maintaining the 2 percent employee pay raise; and adding 2010–11 84 FTE positions to process juvenile status applications (3.0), notify relatives when children are removed from their BIENNIAL 11.5% NA 0.1% 6.7% 4.5% parents’ custody (22.0), increase family group decision CHANGE making to strengthen families (19.7) and support youth transitioning from foster care (15.8), and reduce caseloads for Preparation for Adult Living workers (23.5).

74 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Purchased Child Protective Services Increased funding of $4.7 million in All Funds is due EST/BUD $79.6 $0.0 $103.2 $0.0 $182.8 to maintaining phased-in client services added by 2008–09 CPS Reform Continued in 2009, increasing post- REC $78.0 $0.0 $109.5 $0.0 $187.5 adoption services using savings from phased-in federal 2010–11 reimbursement of adoption subsidy payments, and providing seed money for youth transition centers. Federal BIENNIAL (2.0%) NA 6.1% NA 2.6% Funds are used in lieu of General Revenue Funds ($6.2 CHANGE million) due primarily to the availability of Temporary Assistance for Needy Families (TANF) block grant funds and Adoption Incentive Payment Program formula grant funds.

Foster Care Payments Decreased funding of $10.0 million in All Funds is due to EST/BUD $286.2 $0.0 $460.2 $2.2 $748.6 a projected decline in caseloads. The Average Number 2008–09 of Children Served in Family Protective Services-paid REC $287.5 $0.0 $448.9 $2.2 $738.6 Foster Care Per Month is 16,065 for fi scal year 2010 and 2010–11 16,289 for fi scal year 2011. The fi scal year 2011 number represents a slight increase of 103 children, or 0.1 percent, BIENNIAL 0.5% NA (2.5%) 0.0% (1.3%) over fi scal year 2009. CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 75 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 21 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: HEALTH AND HUMAN SERVICES (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS Adoption Subsidy Payments Increased funding of $47.2 million in All Funds is due to EST/BUD $152.8 $0.0 $133.2 $0.0 $286.0 projected growth in caseloads. The Average Number of 2008–09 Children Provided Adoption Subsidy Per Month is 29,970 REC $178.3 $0.0 $154.9 $0.0 $333.2 for fi scal year 2010 and 32,385 for fi scal year 2011. The 2010–11 fi scal year 2011 number represents an increase of 4,908 children, or 17.9 percent, over fi scal year 2009. BIENNIAL 16.7% NA 16.3% NA 16.5% CHANGE

Prevention and Early Intervention Services Increased funding of $1.5 million in All Funds is due to EST/BUD $39.0 $14.0 $34.2 $0.2 $87.4 the expansion of community-based prevention programs 2008–09 in Strategy C.1.5, Other At-Risk Prevention Programs. REC $32.6 $15.3 $40.8 $0.2 $88.9 Rider 25 directs the expenditure of these funds. Federal 2010–11 Funds are used in lieu of General Revenue Funds ($5.1 million) due to the availability of Promoting Safe and Stable BIENNIAL (16.4%) 9.3% 19.3% 0.0% 1.7% Families grant funds (Title IVB-2). CHANGE

Adult Protective Services Increased funding of $0.8 million in All Funds is due EST/BUD $52.8 $0.0 $72.6 $0.1 $125.5 primarily to maintaining the 2 percent employee pay raise. 2008–09 General Revenue Funds are used in lieu of Federal Funds REC $62.5 $0.0 $63.7 $0.1 $126.3 ($9.0 million) due to the loss of Medicaid Targeted Case 2010–11 Management revenue ($6.4 million) and utilization of Social Services Block Grant funds in other strategies ($2.6 BIENNIAL 18.4% NA (12.3%) 0.0% 0.6% million). CHANGE

76 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Child Care Regulation Increased funding of $5.5 million in All Funds is due EST/BUD $20.3 $0.0 $44.8 $0.0 $65.1 primarily to maintaining the 2 percent employee pay raise, 2008–09 and adding legal staff (17.2 FTEs) and contract services REC $25.9 $0.0 $44.7 $0.0 $70.6 to address a backlog of pending cases for due process 2010–11 hearings related to investigative ﬁ ndings. BIENNIAL 27.6% NA (0.2%) NA 8.4% CHANGE

Indirect Administration Decreased funding of $4.1 million in All Funds is due EST/BUD $57.9 $0.0 $83.7 $0.7 $142.3 primarily to lower costs associated with the completion 2008–09 of one-time capital budget projects and lower master REC $55.7 $0.0 $81.9 $0.6 $138.2 lease purchase program costs, which are offset by higher 2010–11 costs associated with providing Tablet PCs for all CPS conservatorship workers and information technology BIENNIAL (3.8%) NA (2.2%) (14.3%) (2.9%) services and support for new FTE positions. CHANGE

Enterprise Items Funding for the following items resides at the Health and Human Services Commission: $36.4 million in All Funds for foster care rate increases, $1.6 million in All Funds for information technology services provided through the Department of Information Resources, and $0.7 million in All Funds for information technology accessibility services.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 77 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

STATE DEPARTMENT OF HEALTH SERVICES Public Health Preparedness and Coordinated Services Decreased funding of $43.1 million in All Funds primarily EST/BUD $28.6 $8.9 $194.0 $2.1 $233.7 due to the following: 2008–09 REC $26.2 $9.7 $154.6 $0.0 $190.6 • a $39.4 million decrease in Federal Funds due to 2010–11 an overall reduction in Public Preparedness and Bioterrorism funding and one-time funding for pandemic BIENNIAL (8.4%) 9.0% (20.3%) (98.7%) (18.4%) ﬂ u. CHANGE

• a decrease of $9.7 million in General Revenue Funds due to one-time funding for pandemic ﬂ u anti-virals.

• an increase of $7.3 million in General Revenue Funds for expanded disaster recovery and public health preparedness services.

Abstinence Education Decreased funding of $9.8 million in All Funds ($9.8 million EST/BUD $1.1 $0.0 $9.8 $0.0 $11.0 in Federal Funds) due to the discontinuation of Federal 2008–09 Funds for abstinence education in the 2010–11 biennium. REC $1.1 $0.0 $0.0 $0.0 $1.1 2010–11 BIENNIAL 0.0% 0.0% (100.0%) 0.0% (90.0%) CHANGE

78 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Women, Infants, and Children (WIC) Increased funding of $50.0 million in All Funds ($17.2 EST/BUD $3.1 $497.3 $1,199.5 $0.0 $1,699.9 million in General Revenue–Related Funds and $32.8 2008–09 million in Federal Funds) due to estimated growth in REC $3.0 $514.6 $1,232.3 $0.0 $1,749.9 WIC rebates and Federal Funds. WIC rebates (General 2010–11 Revenue–Dedicated Funds) are collected for infant formula and cereal. As a result of increased funding, the number BIENNIAL (3.2%) 3.5% 2.7% 0.0% 2.9% of WIC clients provided food supplements is estimated to CHANGE exceed one million in ﬁ scal year 2011.

Mental Health Services - Adults Decreased funding of $22.4 million in All Funds including a EST/BUD $413.1 $0.0 $158.6 $0.1 $571.8 decrease of $5.9 million in General Revenue Funds due to 2008–09 one-time funds for the Bexar County Detox-Triage Center, REC $407.2 $0.0 $142.1 $0.1 $549.4 and $16.5 million in Federal Funds due to the phase out 2010–11 of the Independence and Employment grant and a less favorable Medicaid FMAP. BIENNIAL (1.4%) 0.0% (10.4%) 66.7% (3.9%) CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 79 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Community Mental Health Crisis Services Increased funding of $70.1 million in All Funds ($70.1 EST/BUD $82.0 $0.0 $0.0 $0.0 $82.0 million in General Revenue Funds) due to: 2008–09 REC $152.1 $0.0 $0.0 $0.0 $152.1 • annualization of the ﬁ scal year 2009 funding level for 2010–11 the Mental Health Community Crisis program: $27.4 million in General Revenue Funds; and BIENNIAL 85.5% 0.0% 0.0% 0.0% 85.5% CHANGE • expansion of transitional and intensive on-going community mental health services: $42.7 million in General Revenue Funds.

Substance Abuse Prevention and Treatment Decreased funding of $5.5 million in All Funds ($5.2 EST/BUD $46.0 $0.0 $271.6 $0.0 $318.0 million in Federal Funds) due to the phase out of two 2008–09 federal grants (Exceptional Care for Texas Screening Brief REC $46.0 $0.0 $266.4 $0.0 $312.5 Referral Treatment and Projects of Regional and National 2010–11 Signiﬁ cance) that support substance abuse services. BIENNIAL 0.0% 0.0% (1.9%) 0.0% (1.7%) CHANGE

Mental Health State Hospitals Increased funding of $10.5 million in All Funds ($4.5 million EST/BUD $662.2 $0.0 $31.7 $44.2 $738.1 in General Revenue Funds) to maintain ﬁ scal year 2007 2008–09 bed capacity at state mental health hospitals. REC $666.7 $0.0 $35.1 $46.9 $748.6 2010–11 BIENNIAL 0.7% 0.0% 10.7% 6.1% 1.4% CHANGE

80 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Mental Health Community Hospitals Increased funding of $8.5 million in All Funds ($8.5 million EST/BUD $47.3 $0.0 $0.0 $0.0 $47.3 in General Revenue Funds) to increase the number of beds 2008–09 at Harris County Psychiatric Center by 24. REC $55.8 $0.0 $0.0 $0.0 $55.8 2010–11 BIENNIAL 18.0% 0.0% 0.0% 0.0% 18.0% CHANGE

Sex Offender Treatment/Supervision Increased funding of $1.4 million in All Funds ($1.4 EST/BUD $0.0 $0.0 $0.0 $5.9 $5.9 million in Other Funds) to serve 50 clients per year in the 2008–09 sex offender civil commitment program. DSHS provides REC $0.0 $0.0 $0.0 $7.3 $7.3 treatment and supervision services for certain sexually 2010–11 violent predators through an interagency contract with the Judiciary Section of the Comptroller’s Department. BIENNIAL 0.0% 0.0% 0.0% 23.7% 23.7% CHANGE

Information Technology Support Increased funding of $4.0 million in All Funds ($4.4 million EST/BUD $13.1 $0.0 $3.1 $0.0 $16.1 in General Revenue Funds) to maintain and enhance 2008–09 DSHS technology systems. REC $17.5 $0.0 $2.7 $0.0 $20.1 2010–11 BIENNIAL 33.6% 0.0% 0.0% 0.0% 24.8% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 81 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Capital Projects Decreased funding of $6.7 million in All Funds including a EST/BUD $16.9 $5.7 $0.0 $43.3 $66.0 $11.3 million decrease in General Revenue Funds due to 2008–09 one-time construction funds for South Texas Health Care REC $5.6 $5.8 $0.0 $47.9 $59.3 System capital projects. This decrease is offset by a $4.6 2010–11 million increase in Other Funds associated with additional General Obligation (G.O.) Bond funds for state mental BIENNIAL (66.9%) 1.8% 0.0% 10.6% (10.2%) health facility capital projects. The total bond funding CHANGE includes: (1) unexpended balances of $7.2 million for construction of Texas Center for Infectious Disease and $20.7 million for repairs and renovations of mental health facilities; and (2) $20 million in new bond funds for mental health facility repair and renovation.

Enterprise Initiative: Increase Capacity of HHS-Funded Community Services Funding is included at the Health and Human Services Commission in the amount of $10.1 million in General Revenue and All Funds for ﬁ scal year 2009 end-of-year waiting lists for Children with Special Health Care Needs and Mental Health Services for Children at DSHS.

Enterprise Initiative: IT Accessibility for ADA Compliance Funding is included at the Health and Human Services Commission in the amount of $1.2 million in General Revenue and All Funds for IT Accessibility ADA Compliance services at DSHS.

82 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Enterprise Initiative: Maintain IT Services for HHS Agencies Provided by DIR Funding is included at the Health and Human Services Commission in the amount of $5.3 million in All Funds for DSHS to meet current data center service obligations.

Enterprise Initiative: Provider Rate Increases Funding is included at the Health and Human Services Commission in the amount of $3.1 million in All Funds for increased provider rates at DSHS.

HEALTH AND HUMAN SERVICES COMMISSION Integrated Eligibility and Enrollment Decreased funding of $2.4 million in All Funds, including an EST/BUD $584.3 $0.0 $752.7 $26.6 $1,363.6 increase of $5.8 million in General Revenue, a reduction 2008–09 of $11.0 million in Federal Funds, and an increase of $2.8 REC $590.1 $0.0 $741.7 $29.4 $1,361.2 million in Other Funds primarily for the following: 2010–11 • an increase of $100.0 million in All Funds, including BIENNIAL 1.0% NA (1.5%) 10.5% (0.2%) $50.0 million in General Revenue Funds to maintain CHANGE end-of-year staffi ng levels and salaries in the Offi ce of Eligibility Services. The staffi ng levels established for Strategy A.1.2, Integrated Eligibility and Enrollment, are 9,039 full-time equivalents in each year of the biennium.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 83 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

• a reduction of $17.0 million in All Funds, including an increase of $3.0 million in General Revenue and a decrease of $20.0 million in TANF Federal Funds for the Healthy Marriages Program. • a transfer of $76.2 million in All Funds, including $37.6 million in General Revenue Funds to Strategy F.1.1, TIERS and Eligibility Supporting Technologies, for capital funding related to the agency assuming duties previously contracted. Acute Care Medicaid (and STAR+PLUS) Increased funding of $3,412.2 million in All Funds ($1,986.0 EST/BUD $11,250.9 $0.0 $16,447.1 $233.0 $27,931.0 million more in General Revenue Funds, $92.8 million 2008–09 less in Other Funds and $1,519.1 million more in Federal REC $13,236.9 $0.0 $17,966.2 $140.2 $31,343.2 Funds) to provide Medicaid acute care health services 2010–11 to eligible recipients. The increase in All Funds relates to funding for projected caseload growth, projected cost BIENNIAL 17.7% NA 9.2% (39.8%) 12.2% growth (including $750 million in General Revenue and CHANGE $1,073.3 million in Federal Funds), and maintenance of provider rates that were increased in 2008–09. Increases in provider rates and community care attendant wages are described in the Enterprise Items section. The funding includes a reduction of $107.1 million in General Revenue and $260.8 million in All Funds for anticipated cost savings, as identifi ed in rider 60, Medicaid Cost Savings. General Revenue Funds replace Other Funds (Fund 6 Match for Medicaid) in the Medical Transportation program, which now resides at HHSC (transferred from Department of Transportation). The Average Medicaid Acute Care Recipient Months per Month increases from 2,892,023 in fi scal year 2009 to 3,017,673 in fi scal year 2011.

84 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

CHIP Increased funding of $284.2 million in All Funds ($113.9 EST/BUD $643.4 $0.0 $1,404.7 $0.0 $2,048.1 million more in General Revenue Funds and $170.3 2008–09 million more in Federal Funds) to provide Children’s REC $757.3 $0.0 $1,575.0 $0.0 $2,332.3 Health Insurance Program health care services to eligible 2010–11 recipients. Funding is provided for projected caseload growth and a projected less favorable EFMAP. Funding is BIENNIAL 17.7% NA 12.1% NA 13.9% added to cover projected ﬁ scal year 2009 cost growth. CHANGE

The Average CHIP Programs Recipient Months per Month (includes all CHIP programs) increases from 522,933 in ﬁ scal year 2009 to 557,508 in ﬁ scal year 2011.

Temporary Assistance for Needy Families (TANF) Cash Assistance Grants Decreased funding of $11.3 million in All Funds ($0.1 EST/BUD $131.3 $0.0 $78.3 $1.4 $211.0 million more in General Revenue Funds, $10.0 million less 2008–09 in Federal Funds and $1.4 million less in Other Funds) due REC $131.4 $0.0 $68.3 $0.0 $199.7 to projected caseload decline. 2010–11 Caseloads for the TANF and State Cash Assistance BIENNIAL 0.1% NA (12.8%) (100.0%) (5.4%) Programs are projected to decline from 111,655 in fi scal CHANGE year 2009 to 108,327 in fi scal year 2011 due to the continuing impact of full family sanction policies. The state two-parent cash assistance caseloads are excluded from the maintenance of effort calculations for this program, due to new work requirements of the federal Defi cit Reduction Act.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 85 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Family Violence Services Increased funding of $7.3 million in All Funds, including EST/BUD $21.8 $0.0 $26.7 $0.0 $48.4 $1.2 million in General Revenue Funds and $6.0 million in 2008–09 Federal Funds, for expanding Family Violence services. REC $23.0 $0.0 $32.7 $0.0 $55.7 The increased funding is estimated to serve an additional 2010–11 12,308 persons per ﬁ scal year. BIENNIAL 5.5% NA 22.5% NA 15.1% CHANGE

TIERS and Eligibility Technologies Increased funding of $51.0 million in All Funds ($37.6 EST/BUD $28.1 $0.0 $33.2 $12.7 $74.0 million more in General Revenue Funds, $26.1 million 2008–09 more in Federal Funds, $12.7 million less in Other Funds) REC $65.7 $0.0 $59.3 $0.0 $125.0 for the Texas Integrated Eligibility Redesign System 2010–11 (TIERS) project. Funding was transferred from Strategy A.1.2, Integrated Eligibility and Enrollment, in the agency’s BIENNIAL 133.8% NA 78.6% (100.0%) 68.9% base request, so this reﬂ ects a realignment and not an CHANGE overall increase.

Disaster Assistance Decreased funding of $279.1 million in All Funds ($53.5 EST/BUD $53.5 $0.0 $225.6 $0.0 $279.1 million less in General Revenue Funds and $225.6 million 2008–09 less in Federal Funds) for Disaster Assistance. Disaster REC $0.0 $0.0 $0.0 $0.0 $0.0 Assistance is not funded, and the full-time equivalents are 2010–11 not continued. These 2008–09 expenditures are for one- time needs arising from Hurricanes Katrina, Rita, Dolly, BIENNIAL (100.0%) NA (100.0%) NA (100.0%) Gustav and Ike. CHANGE

86 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD EDUCATION 2010–11 BIENNIAL RECOMMENDATIONS

All Funds recommendations for Education For General Revenue Funds and Selected performance measures for agencies total $74.8 billion for the 2010–11 General Revenue–Dedicated Funds, the in the Education function are depicted in biennium, which is an increase of $647.7 recommendations total $50.5 billion, Table 24. million, or 0.9 percent, from the 2008–09 which is a decrease of $41.6 million, or biennium (Table 22). 0.1 percent, from the 2008–09 biennium (Table 23). TABLE 22 ALL FUNDS: EDUCATION IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Public Education Texas Education Agency $49,472.9 $48,493.8 ($979.1) (2.0%) School for the Blind and Visually Impaired 140.1 76.1 (64.0) (45.7) School for the Deaf 47.4 49.9 2.4 5.1 Subtotal, Public Education $49,660.5 $48,619.8 ($1,040.7) (2.1%)

Public Higher Education General Academic Institutions $6,072.3 $6,244.8 $172.5 2.8% Health-related Institutions 7,363.0 7,959.1 596.1 8.1 Texas A&M Service Agencies 835.5 875.0 39.5 4.7 Higher Education Fund 525.0 525.0 0.0 NA Available University Fund 1,024.0 1,070.2 46.3 4.5 Other Higher Education 1,284.0 1,580.5 296.5 23.1

Two-Year Institutions Public Community/Junior Colleges $1,719.2 $1,901.3 $182.1 10.6% Lamar Lower-level Institutions 64.8 67.0 2.1 3.3

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 87 EDUCATION 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 22 ALL FUNDS: EDUCATION (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Texas State Technical Colleges $163.5 $167.8 $4.3 2.6% Subtotal, Two-year Institutions $1,947.6 $2,136.1 $188.5 9.7% Subtotal, Higher Education $19,051.4 $20,390.8 $1,339.4 7.0%

Teacher Retirement System $3,761.9 $4,005.1 $243.2 6.5% Optional Retirement Program 285.5 294.7 9.1 3.2 Higher Education Employees Group Insurance Contributions 952.3 1,003.8 51.5 5.4 Retirement and Group Insurance 52.1 58.9 6.8 13.1 Socal Security and Beneﬁ ts Replacement Pay 518.9 554.9 36.0 6.9 Subtotal, Employee Beneﬁ ts $5,570.7 $5,917.4 $346.7 6.2%

Bond Debt Service Payments $5.3 $13.6 $8.4 158.1% Lease Payments 12.6 5.9 (6.7) (53.2) Subtotal, Debt Service $17.9 $19.5 $1.6 9.1%

Less Interagency Contracts $148.6 $147.9 ($0.7) (0.5%)

Total Article III – Agencies of Education $74,151.9 $74,799.6 $647.7 0.9%

*Estimated/budgeted amounts in the 2008–09 biennium include $1,487.6 million to cover the cost of a 25th month of Foundation School Program payments, reversing the deferral of the August payment into the following ﬁ scal year.This is a one-time cost, so no appropriation for this purpose is necessary in the 2010–11 biennium. NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

88 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD EDUCATION 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 23 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: EDUCATION IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Public Education Texas Education Agency $32,607.2 $31,348.6 ($1,258.6) (3.9%) School for the Blind and Visually Impaired 27.9 30.6 2.8 9.9 School for the Deaf 35.7 38.0 2.3 6.4 Subtotal, Public Education $32,670.8 $31,417.2 ($1,253.6) (3.8%)

Public Higher Education General Academic Institutions $6,060.1 $6,232.3 $172.2 2.8% Health-related Institutions 2,482.4 2,645.4 163.0 6.6 Texas A&M Service Agencies 345.2 378.8 33.7 9.8 Higher Education Fund 525.0 525.0 0.0 NA Available University Fund 0.0 0.0 0.0 NA Other Higher Education 1,079.8 1,388.2 308.4 28.6

Two-Year Institutions Public Community/Junior Colleges $1,719.2 $1,901.3 $182.1 10.6% Lamar Lower-level Institutions 64.8 67.0 2.1 3.3 Texas State Technical Colleges 163.5 167.8 4.3 2.6 Subtotal, Two-year Institutions $1,947.6 $2,136.1 $188.5 9.7% Subtotal, Higher Education $12,440.1 $13,305.8 $865.7 7.0%

Teacher Retirement System $3,641.0 $3,884.3 $243.3 6.7% Optional Retirement Program 285.5 294.7 9.1 3.2

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 89 EDUCATION 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 23 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: EDUCATION (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Higher Education Employees Group Insurance Contributions $951.2 $1,002.6 $51.5 5.4% Retirement and Group Insurance 42.8 48.5 5.8 13.4 Socal Security and Beneﬁ ts Replacement Pay 499.2 534.2 35.0 7.0 Subtotal, Employee Beneﬁ ts $5,419.7 $5,764.3 $344.6 6.4%

Bond Debt Service Payments $5.3 $13.6 $8.4 158.5% Lease Payments 12.6 5.9 (6.7) (53.2) Subtotal, Debt Service $17.9 $19.5 $1.6 9.2%

Total Article III – Agencies of Education $50,548.5 $50,506.9 ($41.6) (0.1%)

*Estimated/budgeted amounts in the 2008–09 biennium include $1,487.6 million to cover the cost of a 25th month of Foundation School Program payments, reversing the deferral of the August payment into the following ﬁ scal year.This is a one-time cost, so no appropriation for this purpose is necessary in the 2010–11 biennium. Note: Biennial change and percentage change are calculated on actual amounts before rounding.Therefore, table amounts may not add because of rounding.

90 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 24 SELECTED PERFORMANCE MEASURES: EDUCATION ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011 PUBLIC EDUCATION TEXAS EDUCATION AGENCY Total Average Daily Attendance 4,316,833 4,398,692 4,474,218 4,557,004 Percent of Students Passing All Tests Taken 69.3% 72.0% 74.0% 75.0% Percent of African-American Students Passing All Tests 55.1% 56.0% 58.0% 59.0% Taken Percent of Hispanic Students Passing All Tests Taken 62.5% 64.0% 66.0% 68.0% Percent of Economically Disadvantaged Students 59.9% 62.0% 64.0% 65.0% Passing All Tests Taken Percent of Students Completing High School 88.6% 85.1% 83.9% 84.0% Percent of Districts Rated Exemplary or Recognized 30.0% 18.0% 15.0% 15.0% Percent of Campuses That Meet Adequate Yearly 75.0% 70.0% 60.0% 50.0% Progress Percent of Students Exiting Bilingual/English as a 82.2% 76.0% 82.0% 82.0% Second Language Programs Successfully HIGHER EDUCATION HIGHER EDUCATION COORDINATING BOARD Number of Students Receiving TEXAS Grants 53,467 60,303 63,971 56,507

GENERAL ACADEMIC INSTITUTIONS AND LAMAR STATE COLLEGES Percent of First-time, Full-time Freshmen Who Earn a 38.75% 40.57% 42.75% 43.46% Degree Within Six Years1 Retention Rate of First-time, Full-time Freshmen After 67.43% 69.90% 73.86% 74.67% One Year

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 91 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 24 SELECTED PERFORMANCE MEASURES: EDUCATION (CONTINUED) ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

Percent of Lower-Division Courses Taught By Tenured or 39.47% 40.37% 46.83% 46.93% Tenure-track Faculty Percent of Courses Completed at Lamar State Colleges 90.77% 90.77% 91.80% 91.80%

HEALTH-RELATED INSTITUTIONS Percent of Medical School Graduates Practicing Primary 34.9% 35.1% 34.0% 34.0% Care in Texas2 Percent of Bachelor of Science in Nursing Graduates 93.1% 94.5% 93.3% 93.3% Who Are Licensed in Texas3

1Only including students who graduated at the same institution they initially enrolled as a freshman. 2Composed of the average performance of each institution with a medical school program, which includes UT Southwestern Medical Center at Dallas, UT Medical Branch at Galveston, UT Health Science Center at Houston, UT Health Science Center at San Antonio, Texas A&M University System Health Science Center, University of North Texas Health Science Center at Fort Worth, and Texas Tech University Health Sciences Center. 3Composed of the average performance of each institution with a nursing program, which includes UT Medical Branch at Galveston, UT Health Science Center at Houston, UT Health Science Center at San Antonio, and Texas Tech University Health Sciences Center.

92 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 25 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: EDUCATION IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS AGENCY ISSUES: PUBLIC EDUCATION TEXAS EDUCATION AGENCY Foundation School Program (FSP) - Reversal of the August FSP Payment Deferral For the 2008–09 biennium, the agency was appropriated EST/BUD $1,487.6 $0.0 $0.0 $0.0 $1,487.6 $1,487.6 million to pay for the August 2009 FSP payment 2008–09 pursuant to House Bill 1, 79th Legislature, Third Called REC $0.0 $0.0 $0.0 $0.0 $0.0 Session. August FSP payments prior to ﬁ scal year 2009 2010–11 had been deferred one month and thus into the subsequent ﬁ scal year. The reversal of this deferral pulled this additional BIENNIAL (100.0%) 0.0% 0.0% 0.0% (100.0%) month into the 2008–09 biennium, requiring appropriations CHANGE for 25 months of Foundation School Program payments instead of the normal 24. This is a one-time cost in the 2008–09 biennium, and so no appropriation is necessary for this purpose in the 2010–11 biennium.

Foundation School Program (FSP) - Operations and Facilities Funding The 2010–11 biennial funding level fully funds current EST/BUD $28,508.3 $0.0 $0.0 $8,333.1 $36,841.4 law obligations, including the cost of student growth, and 2008–09 includes $68.9 million to roll forward eligibility in the Existing REC $28,929.5 $0.0 $0.0 $8,055.8 $36,985.3 Debt Allotment Program and $75 million to provide $25 2010–11 million in new Instructional Facilities Allotment grants in each year of the biennium. An additional $1,866 million is BIENNIAL 1.5% 0.0% 0.0% (3.3%) 0.4% directed by rider to be spent to support a formula-driven CHANGE school ﬁ nance system that improves equity and reduces recapture.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 93 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Educator Incentive Pay Funding includes an increase of $147.8 million to maintain EST/BUD $342.8 $0.0 $0.0 $0.0 $342.8 baseline funding for the Texas Educator Excellence Grant 2008–09 and provides two years of baseline funding for the District REC $490.6 $0.0 $0.0 $0.0 $490.6 Awards for Teacher Excellence programs. 2010–11 BIENNIAL 43.1% 0.0% 0.0% 0.0% 43.1% CHANGE

Prekindergarten Grants Funding includes $32.5 million in increased funding for the EST/BUD $165.2 $0.0 $18.4 $0.0 $183.6 Prekindergarten Expansion Grants program to serve an 2008–09 estimated 22,500 additional students. REC $216.1 $0.0 $0.0 $0.0 $216.1 2010–11 BIENNIAL 30.8% 0.0% (100.0%) 0.0% 17.7% CHANGE

Educator Professional Development Funding includes $32.1 for educator professional EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 development regarding on-going revisions to the Texas 2008–09 Essential Knowledge and Skills. REC $32.1 $0.0 $0.0 $0.0 $32.1 2010–11 BIENNIAL NA 0.0% 0.0% 0.0% NA CHANGE

94 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 25 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: EDUCATION (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS School Bus Seat Belt Program Funding includes $31 million to provide funding to install EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 seat belts in school buses purchased beginning in ﬁ scal 2008–09 year 2011. REC $31.0 $0.0 $0.0 $0.0 $31.0 2010–11 BIENNIAL NA 0.0% 0.0% 0.0% NA CHANGE

Other Major General Revenue Programs Funding includes a net increase in funding for General EST/BUD $1,199.3 $0.0 $0.0 $0.0 $1,199.3 Revenue programs of $17 million. Included in this 2008–09 increase is $9 million for Windham School District salaries REC $1,215.8 $0.0 $0.0 $0.0 $1,215.8 and instructional programs, $8 million to maintain the 2010–11 distribution of $23.63 per student in weighted average daily attendance for educator salary funding, a $7 million BIENNIAL 1.4% 0.0% 0.0% 0.0% 1.4% increase for Teach for America, a $4 million increase for CHANGE criminal history background checks for certiﬁ ed educators, $4 million to comply with federal requirements for end of course assessments for students with disabilities, $3 million to fund technology-based supplemental mathematics instruction in middle schools, $2 million for Humanities Texas, and a $0.3 million increase for Dyslexia Coordinators. One-time 2008–09 funds totaling $14 million are eliminated: the High School Completion and Success Initiative is reduced by $4 million; and funds transferred to the Texas Youth Commission are reduced by $2 million to align with projected enrollment.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 95 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Administrative Operations Funding includes a net increase of $2.1 million in All EST/BUD $143.2 $0.0 $79.0 $24.0 $246.2 Funds ($2.9 million in General Revenue Funds) for agency 2008–09 administration which reﬂ ects a $3 million increase to REC $146.1 $0.0 $78.5 $23.7 $248.3 provide administrative support for educator background 2010–11 checks, a $0.2 million increase to augment administrative funding for Communities in Schools, and an increase BIENNIAL 2.0% 0.0% (0.6%) (1.3%) 0.9% associated with funding two years of the ﬁ scal year 2009 CHANGE statewide salary increase. Increases are offset by the net impact to administrative funding from changes in federal grants described below and a decrease in the agency’s capital budget.

Federal Funds Federal Funds are increased by $553 million. The increase EST/BUD $0.0 $0.0 $8,413.0 $0.0 $8,413.0 includes $384 million for the Child Nutrition Program, $240 2008–09 million in Title I grants to school districts, $79 million in REC $0.0 $0.0 $8,965.7 $0.0 $8,965.7 the Individuals with Disabilities Education Act grant, $28 2010–11 million for Math Science Partnerships, and $13 million in the English Language Acquisition grant. The increase is offset BIENNIAL 0.0% 0.0% 6.6% 0.0% 6.6% by decreases of $135 million reﬂ ecting termination of the CHANGE Reading First program, $16 million reﬂ ecting termination of the Innovative Education Programs grant, a $30 million reduction to the 21st Century Community Learning Center program, and reductions to Even Start and other federal programs. Increases in Federal Funding from the American Recovery and Reinvestment Act of 2009 are appropriated in Article XII.

96 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TEXAS SCHOOL FOR THE BLIND AND VISUALLY IMPAIRED Residential Instructor Compensation $596,000 is included to provide for salary increases for EST/BUD $5.3 $0.0 $0.0 $0.2 $5.5 residential instructors. The increases would provide an 2008–09 average $200 per month per employee for the school’s 128 REC $5.9 $0.0 $0.0 $0.2 $6.1 resident instructors and will allow the school to attract a 2010–11 larger and more qualiﬁ ed applicant pool. BIENNIAL 11.3% 0.0% 0.0% 0.0% 10.9% CHANGE

Teacher Preparation Programs. Funding includes $800,000 to address the shortage of EST/BUD $0.0 $0.0 $1.8 $0.0 $1.8 certiﬁ ed teachers to serve blind and visually impaired 2008–09 students. The teacher preparation program is in partnership REC $0.8 $0.0 $1.8 $0.0 $2.6 with Texas Tech University and Stephen F. Austin 2010–11 University. BIENNIAL NA 0.0% 0.0% 0.0% 44.4% CHANGE

Campus Renovations Funding includes $35.2 million in unexpended general EST/BUD $0.0 $0.0 $0.0 $68.3 $68.3 obligation bond proceeds for campus renovations out of 2008–09 $68.3 million authorized by the Eightieth Legislature. The REC $0.0 $0.0 $0.0 $35.2 $35.2 agency expended or encumbered $33.1 million in LBB 2010–11 approved bond proceeds in the 2008–09 biennium. BIENNIAL 0.0% 0.0% 0.0% (48.5%) (48.5%) CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 97 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Salary Increases General Revenue is increased by $0.3 million to annualize EST/BUD $26.8 $0.0 $3.0 $0.0 $29.8 salaries at the 2009 level for a 2.0 percent state employee 2008–09 pay raise and a 3.0 percent professional salary increase. REC $27.5 $0.0 $2.9 $0.0 $30.4 Appropriations also include $0.4 million in General Revenue 2010–11 Funds to fund a 3.0 percent professional salary increase in each year of the 2010–11 biennium as required under BIENNIAL 2.6% 0.0% 0.0% 0.0% 2.0% statute to pay teachers on the Austin Independent School CHANGE District salary schedule.

TEXAS SCHOOL FOR THE DEAF 18+ Transition Services Funding includes $442,000 in General Revenue Funds EST/BUD $6.2 $0.0 $0.8 $8.2 $15.2 and 6.4 new FTE positions to provide services to students 2008–09 who have transferred to TSD for additional transition REC $6.6 $0.0 $0.8 $8.2 $15.6 services such as guidance and instruction on employment 2010–11 preparation, independent living skills, and community integration. BIENNIAL 6.5% 0.0% 0.0% 0.0% 2.6% CHANGE

Transportation Vehicle Replacement and Fuel Costs Funding is increased by $270,000 in General Revenue to EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 add two school buses, two Drivers’ Education cars, and two 2008–09 passenger vans to School’s current ﬂ eet of 33 vehicles. REC $0.3 $0.0 $0.0 $0.0 $0.3 2010–11 BIENNIAL NA 0.0% 0.0% 0.0% NA CHANGE

98 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Salary Increases Funding is increased by $0.4 million in General Revenue EST/BUD $33.0 $0.0 $0.5 $1.0 $34.5 Funds to annualize salaries at the 2009 level for a 2.0 2008–09 percent state employee pay raise and a 3.0 percent REC $34.0 $0.0 $0.4 $1.1 $35.5 professional salary increase. Appropriations also include 2010–11 $0.6 million in General Revenue Funds to fund a 3.0 percent professional salary increase in each year of BIENNIAL 3.0% 0.0% 0.0% 0.0% 2.9% the 2010–11 biennium as required under statute to pay CHANGE teachers on the Austin Independent School District salary schedule.

TEACHER RETIREMENT SYSTEM

State Retirement Contribution Rate at 6.4 Percent

Funding is increased by $190.2 million in All Funds to EST/BUD $2,992.1 $171.2 $0.0 $3.6 $3,166.9 provide a 6.4 percent state retirement contribution rate to 2008–09 refl ect assumed payroll growth in public education of 5.0 REC $3,157.2 $196.2 $0.0 $3.8 $3,357.2 percent annually in fi scal years 2010 and 2011 and payroll 2010–11 growth of 7.0 percent annually in higher education in fi scal years 2010 and 2011. Current law prohibits the state BIENNIAL 5.5% 14.6% 0.0% 5.6% 6.0% contribution rate for retirement from being less than that of CHANGE active members, which is currently 6.4 percent.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 99 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Statutorily Required State Contribution to TRS-Care Retired Employee Group Insurance Program Funding is increased by $45.8 million in General Revenue EST/BUD $477.7 $0.0 $0.0 $0.0 $477.7 Funds for required state contribution of 1.0 percent of 2008–09 payroll to refl ect assumed 5.0 percent annual payroll growth REC $523.4 $0.0 $0.0 $0.0 $523.4 in public education. Agency projections indicate that funding 2010–11 provided through the state statutory 1.0 percent contribution together with the fund balance projected for fi scal year 2009 BIENNIAL 9.6% 0.0% 0.0% 0.0% 9.6% will be suffi cient to fund plan costs under the current benefi t CHANGE structure for the 2010–11 biennium.

Administrative Operations Funding includes an increase of $3.9 million from the EST/BUD $0.0 $0.0 $0.0 $117.3 $117.3 Pension Trust Fund for salaries for existing investment staff, 2008–09 $3.3 million and 20 full-time equivalent (FTE) positions REC $7.4 $0.0 $0.0 $117.1 $124.5 for restructuring the investment division and $50,000 to 2010–11 conduct a prescription drug study regarding the Medicare Part D retiree drug subsidy. Funding also includes a $7.4 BIENNIAL NA 0.0% 0.0% (0.17%) 6.14% million increase in General Revenue Funds for exempt staff CHANGE salaries offset by an equal decrease from the TRS Trust Fund Account No. 960.

100 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 25 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: EDUCATION (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS OPTIONAL RETIREMENT PROGRAM State Retirement Contribution at 6.4 Percent Increased funding of $9.1 million in All Funds assumes a EST/BUD $243.6 $41.9 $0.0 $0.0 $285.5 6.4 percent state contribution rate and reﬂ ects assumed 2008–09 growth in covered payroll of 3.0 percent. REC $251.4 $43.3 $0.0 $0.0 $294.7 2010–11 BIENNIAL 3.2% 3.3% 0.0% 0.0% 3.2% CHANGE

MULTI-AGENCY ISSUES: HIGHER EDUCATION HIGHER EDUCATION EMPLOYEES GROUP INSURANCE Provided an additional $51.4 million in General Revenue EST/BUD $951.2 $0.0 $0.0 $1.1 $952.3 Funds to fund rate increases of 6.5 percent in ﬁ scal year 2008–09 2010 and 6.8 percent in ﬁ scal year 2011. REC $1,002.6 $0.0 $0.0 $1.2 $1,003.8 2010–11 BIENNIAL 5.4% NA NA 5.5% 5.4% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 101 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 25 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: EDUCATION (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS AGENCY ISSUES: HIGHER EDUCATION HIGHER EDUCATION COORDINATING BOARD Funding was increased $254.9 million in General Revenue EST/BUD $1,036.8 $43.0 $113.1 $91.1 $1,284.0 Funds, primarily due to increased funding for the Higher 2008–09 Education Performance Incentive Initiative ($100.0 million), REC $1,291.7 $96.5 $102.8 $89.5 $1,580.5 TEXAS grants ($85.9 million), B-on-Time Program ($18.6 2010–11 million), Family Practice Residency Program ($7.5 million), Professional Nursing Shortage Residency Program ($5.0 BIENNIAL 24.6% 124.4% (9.1%) (1.2%) 23.1% million), Joint Admission Medical Program ($5.0 million), CHANGE Hospital-Based Nursing Grant Program ($5.0 million), Developmental Education Program ($5.0 million), Teach for Texas Loan Repayment Program ($5.0 million), Advanced Research Program ($4.0 million), New Campus Funding ($3.5 million), Baylor College of Medicine ($3.2 million), Alzheimer’s Disease Centers ($2.9 million), and Baylor College of Medicine Graduate Medical Education formula allocation ($1.9 million). These increases were offset by decreases in the OAG Loan Repayment Program ($0.5 million) and the Doctoral Incentive Program ($0.9 million). Previously these programs were funded by General Revenue Funds and tuition set-asides. The recommended amounts only include the tuition set-asides. Funding recommendations total $901.8 million for the Student Financial Aid strategy (TEXAS Grants, Tuition Equalization Grants, B-on-Time Program, Texas College Work Study, and Texas Educational Opportunity Grants) in the 2010–11 biennium, an increase of $106.2 million in General Revenue Funds over the 2008–09 funding level primarily due to increases in TEXAS grants and the B-on-Time Program.

102 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

General Revenue–Dedicated Funds increased $53.5 million primarily due to $28.0 million in unexpended balances for the B-on-Time Program and $20.0 million in increased designated tuition set-asides coming in for ﬁ scal year 2010–11 for the program. Federal Funds decreased a total of $10.3 million due to an across-the-board reduction in Perkins funds by Congress as well as some funds being administered directly by Texas Workforce Commission instead of being passed through the Higher Education Coordinating Board.

HIGHER EDUCATION FUND Funding for the Higher Education Fund was sustained EST/BUD $525.0 $0.0 $0.0 $0.0 $525.0 at the levels required by House Bill 3001, Seventy-ninth 2008–09 Legislature, Regular Session, 2005. REC $525.0 $0.0 $0.0 $0.0 $525.0 2010–11 BIENNIAL 0.0% NA NA NA 0.0% CHANGE

AVAILABLE UNIVERSITY FUND Estimated earnings on the Available University Fund EST/BUD $0.0 $0.0 $0.0 $1,024.0 $1,024.0 increased by $46.2 million. 2008–09 REC $0.0 $0.0 $0.0 $1,070.2 $1,070.2 2010–11 BIENNIAL NA NA NA 4.5% 4.5% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 103 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

GENERAL ACADEMIC INSTITUTIONS, SYSTEM OFFICES, LAMAR STATE COLLEGES, TEXAS STATE TECHNICAL COLLEGE General Academic Institutions General Revenue Funds increased $187.6 million overall, EST/BUD $4,603.1 $1,685.4 $0.0 $12.2 $6,300.7 including an increase in formula funding that includes: 2008–09 • $81 million to fund 2.35 percent growth in formula REC $4,799.5 $1,667.6 $0.0 $12.5 $6,479.6 enrollment 2010–11 • an additional increase of $96 million for formula enrichment BIENNIAL 4.27% (1.1%) NA 2.9% (2.84%) • $29.5 million in formula hold harmless CHANGE Non-formula General Revenue Fund decreases include: • $31.0 million for tuition revenue bond debt service reimbursement • $45.3 million in one time funding in 2008–09, such as hurricane emergency appropriations and deferred maintenance. Non-formula General Revenue Fund increases include: • $1.9 million for small business development centers • $8 million for Texas Competitive Knowledge Fund • $18.7 million for system center operations • $9.9 million for debt service for system centers • $4 million for the engineering program at Texas A&M - Corpus Christi • $1 million for business incubator at Texas A&M - Corpus Christi • $14.6 for system ofﬁ ce operations

104 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

In addition, $65.9 million in General Revenue Funds moves from special items to the Instruction and Operations Formula. An amount equal to each institution’s resulting formula increase was then deducted from its Excellence strategy ﬁ rst and then its Institutional Enhancement strategy. General Revenue–Dedicated Funds decreased $15.4 million overall, due mainly to an increase in estimated statutory tuition revenue.

Lamar State Colleges Funding increased $1.9 million in General Revenue Funds overall. The increase includes $0.4 million in the instruction formula to fund 1.4 percent contact hour growth and $1.9 million in formula enrichment, of which $95,816 is for hold harmless funding. Additionally, the Lamar State Colleges increased $0.8 million in infrastructure formula General Revenue over 2008–09. Non-formula General Revenue Fund decreased due to one-time funding in 2008–09 for Hurricane Rita emergency appropriations, but includes an increase for the small business development center at Lamar State College – Port Arthur. General Revenue–Dedicated Funds increased $0.2 million for estimated statutory tuition revenue.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 105 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 25 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: EDUCATION (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS Texas State Technical College Funding increased $6.8 million in General Revenue Funds overall. This includes an increase of $0.5 million in the instruction formula to fund 0.6 percent contact hour growth and an additional $5.6 million in formula enrichment, which includes $2.6 million in hold harmless funding. An overall increase of $0.6 million in the infrastructure formula includes $1.8 million in hold harmless funding. General Revenue–Dedicated Funds include a decrease of $2.5 million for estimated statutory tuition revenue.

TEXAS A&M SYSTEM AGENCIES General Revenue Funds decreased $13.1 million due to EST/BUD $310.8 $34.4 $195.5 $294.9 $835.5 one-time reimbursements related to wildﬁ re response made 2008–09 in 2008–09 by the Texas Forest Service. This decrease was REC $313.8 $64.9 $201.2 $294.9 $875.0 offset by an increase of $7 million for the wildlife protection 2010–11 plan at the Texas Forest Service, a $3 million increase for transportation studies at the Texas Transportation Institute BIENNIAL 1.0% 88.8% 3.0% 0.0% 4.7% and a $2.1 million across all system agencies to annualize CHANGE salaries.

The General Revenue–Dedicated Funds for the Volunteer Fire Department Assistance Program at the Texas Forest Service was increased by $30.0 million, appropriating fund balances.

106 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 25 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: EDUCATION (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS Increases in Federal Funds at the Texas Engineering Experiment Station ($5.2 million) and the Texas Transportation Institute ($1.2 million) were offset by a decrease at the Texas Forest Service ($0.6 million). Decreases in Other Funds at the Texas Forest Service ($1.0 million) and the Texas Veterinary Medical Diagnostic Laboratory ($2.6 million) were offset by increases at the Texas Engineering Experiment Station ($1.8 million) and the Texas Transportation Institute ($1.5 million).

PUBLIC COMMUNITY/JUNIOR COLLEGES Provided Community Colleges with $65.8 million to fund EST/BUD $1,719.2 $0.0 $0.0 $0.0 $1,719.2 contact hour growth. Also provided an additional $110.0 2008–09 million in formula funding contingent on sustaining REC $1,901.3 $0.0 $0.0 $0.0 $1,901.3 proportionality provisions. In addition to these formula 2010–11 contributions, $6.0 million was provided to fund the formula- based Small Institution Supplement. BIENNIAL 10.6% NA NA NA 10.6% CHANGE Reduced funding for Southwest Collegiate Institute for the Deaf by $1.0 million to reﬂ ect one-time 2008–09 appropriations. The following 2 Special Items received increased support: • $0.3 million for STARLINK at Dallas Community Colleges. • $0.7 million for the Southwest Collegiate Institute for the Deaf at Howard College to fund certain one-time items and provide an increase in operating support.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 107 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

HEALTH-RELATED INSTITUTIONS General Revenue Funds for Health-Related Institutions EST/BUD $2,288.2 $194.2 $0.0 $4,880.5 $7,362.9 increased $150.6 million, including the following: 2008–09 • an increase of $61.0 million for the Instruction and REC $2,438.8 $206.6 $0.0 $5,313.7 $7,959.1 Operation Support Formula for an 8 percent increase 2010–11 in weighted student growth and an additional $38.1 million in supplemental funding; BIENNIAL 6.6% 6.4% 0.0% 8.9% 8.1% • an increase of $9.3 million for the Infrastructure CHANGE Support Formula; • an increase of $2.6 million for the Research Formula; • an increase of $0.5 million for The University of Texas Health Science Center at Houston Public Health Austin Campus to be included in the small campus supplement; • an increase of $2.2 million for Texas Tech University Health Sciences Center School of Pharmacy Abilene Campus to be included in the small campus supplement ($2.0 million) within the Instruction and Operations Support Formula and the multicampus adjustment ($0.2 million) within the Infrastructure Support Formula; • an increase of $3.7 million to fund the Graduate Medical Education Formula for a 5.8 percent increase in medical resident growth along with an additional $8.1 million supplemental funding; • an increase of $5.5 million to fund the Cancer Center Operations Formula at The University of Texas M.D. Anderson Cancer Center; • an increase of $5.0 million to fund the Chest Disease Center Operations Formula at The University of Texas Health Science Center at Tyler;

108 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 25 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: EDUCATION (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS • a net decrease of $4.7 million in debt service for existing tuition revenue bonds; • an increase of $8.0 million to fund the College of Medicine expansion at the Texas A&M University System Health Science Center Round Rock campus; • a decrease of $4.0 million from a one-time funding of lease space for the Texas A&M University System Health Science Center Temple campus; • an increase of $17.6 million to fund the School of Medicine expansion at the Texas Tech University Health Sciences Center at El Paso; and • a decrease of $2.4 million for the Texas Tech University Health Sciences Center Cancer Research Pilot Program, transitioning the program to implementation. General Revenue–Dedicated funding for the Health- Related Institutions decreases by $12.4 million in tuition and fees and other income.

Other Funds for the Health-Related Institutions increases by $433.2 million because of an increase in patient income ($464.7 million), mostly attributable to The University of Texas M.D. Anderson Cancer Center and a decrease in Tobacco Fund Earnings ($31.6 million).

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 109 110 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD JUDICIARY 2010–11 BIENNIAL RECOMMENDATIONS

All Funds recommendations for the For General Revenue Funds and Selected performance measures for agencies Judiciary total $672.50 million for the General Revenue–Dedicated Funds, the in the Judiciary function are depicted in 2010–11 biennium, which is an increase recommendations total $501.4 million, Table 28. of $48.3 million, or 7.7 percent, from the which is an increase of $44.8 million, or 2008–09 biennium (Table 26). 9.8 percent, from the 2008–09 biennium (Table 27). TABLE 26 ALL FUNDS: JUDICIARY IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Supreme Court of Texas $38.5 $61.0 $22.5 58.3% Court of Criminal Appeals 28.9 30.5 1.6 5.5 First Court of Appeals District, Houston 7.3 8.0 0.7 10.1 Second Court of Appeals District, Fort Worth 5.6 6.1 0.5 9.6 Third Court of Appeals District, Austin 4.9 5.4 0.5 10.1 Fourth Court of Appeals District, San Antonio 5.5 6.1 0.5 9.6 Fifth Court of Appeals District, Dallas 9.9 10.9 1.1 10.8 Sixth Court of Appeals District, Texarkana 2.6 2.9 0.3 11.8 Seventh Court of Appeals District, Amarillo 3.3 3.6 0.3 10.0 Eighth Court of Appeals District, El Paso 2.7 3.0 0.3 11.5 Ninth Court of Appeals District, Beaumont 3.3 3.6 0.3 9.5 Tenth Court of Appeals District, Waco 2.5 2.9 0.4 14.5 Eleventh Court of Appeals District, Eastland 2.6 2.9 0.3 11.8 Twelfth Court of Appeals District, Tyler 2.6 2.9 0.3 11.6 Thirteenth Court of Appeals District, Corpus Christi-Edinburg 4.9 5.4 0.5 10.2 Fourteenth Court of Appeals District, Houston 7.3 8.0 0.7 9.7

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 111 JUDICIARY 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 26 ALL FUNDS: JUDICIARY (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Ofﬁ ce of Court Administration, Texas Judicial Council $88.1 $93.7 $5.6 6.4% Ofﬁ ce of the State Prosecuting Attorney 0.9 0.9 0.0 1.3 State Law Library 2.0 2.3 0.3 14.2 State Commission on Judicial Conduct 1.8 2.0 0.2 10.6 Judiciary Section, Comptroller’s Department 281.2 288.3 7.2 2.5 Subtotal, Courts and Agencies $506.2 $550.3 $44.1 8.7%

Retirement and Group Insurance $110.1 $113.9 $3.8 3.4% Social Security and Beneﬁ t Replacement Pay 18.9 19.4 0.5 2.6 Subtotal, Employee Beneﬁ ts $129.0 $133.3 $4.3 3.3%

Lease Payments $4.9 $4.9 $0.0 0.1% Less Interagency Contracts 16.0 16.1 0.1 0.6

Total Article IV – The Judiciary $624.2 $672.5 $48.3 7.7%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

112 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD JUDICIARY 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 27 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: JUDICIARY IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Supreme Court of Texas $13.9 $35.6 $21.7 156.6% Court of Criminal Appeals 8.8 9.7 1.0 11.2 First Court of Appeals District, Houston 6.6 7.3 0.8 11.5 Second Court of Appeals District, Fort Worth 5.0 5.6 0.5 10.7 Third Court of Appeals District, Austin 4.4 4.9 0.5 11.1 Fourth Court of Appeals District, San Antonio 5.0 5.5 0.5 10.7 Fifth Court of Appeals District, Dallas 9.0 10.1 1.1 11.8 Sixth Court of Appeals District, Texarkana 2.4 2.7 0.3 13.0 Seventh Court of Appeals District, Amarillo 3.0 3.3 0.3 10.9 Eighth Court of Appeals District, El Paso 2.4 2.7 0.3 12.7 Ninth Court of Appeals District, Beaumont 3.0 3.3 0.3 10.3 Tenth Court of Appeals District, Waco 2.3 2.7 0.4 15.8 Eleventh Court of Appeals District, Eastland 2.4 2.7 0.3 12.8 Twelfth Court of Appeals District, Tyler 2.4 2.7 0.3 12.6 Thirteenth Court of Appeals District, Corpus Christi-Edinburg 4.4 4.9 0.5 11.3 Fourteenth Court of Appeals District, Houston 6.6 7.4 0.7 10.9 Ofﬁ ce of Court Administration, Texas Judicial Council 78.1 83.7 5.6 7.2 Ofﬁ ce of the State Prosecuting Attorney 0.9 0.9 0.0 NA State Law Library 1.9 2.2 0.3 14.9 State Commission on Judicial Conduct 1.8 2.0 0.2 10.6 Judiciary Section, Comptroller’s Department 171.8 177.3 5.5 3.2 Subtotal, Courts and Agencies $336.2 $377.3 $41.1 12.2%

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 113 JUDICIARY 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 27 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: JUDICIARY (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Retirement and Group Insurance $101.1 $104.3 $3.3 3.2% Social Security and Beneﬁ t Replacement Pay 14.5 14.8 0.3 2.4 Subtotal, Employee Beneﬁ ts $115.6 $119.2 $3.6 3.1%

Lease Payments $4.9 $4.9 $0.0 0.1%

Total Article IV – The Judiciary $456.7 $501.4 $44.8 9.8%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

114 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 28 SELECTED PERFORMANCE MEASURES: JUDICIARY ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

SUPREME COURT OF TEXAS Disposition Rate 104.7% 105.0% 105.0% 105.0%

COURT OF CRIMINAL APPEALS Disposition Rate for Petitions for Discretionary Review 140.0% 144.0% 100.0% 100.0% Which are Granted

14 COURTS OF APPEALS Clearance Rate 95.9% 100.0% 100.0% 100.0%

OFFICE OF COURT ADMINISTRATION Number of Children who have Received a Final Order 5,429 4,967 4,816 4,909

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 115 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 29 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: JUDICIARY IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS AGENCY ISSUES SUPREME COURT OF TEXAS Appellate Court Operations A $0.5 million increase in General Revenue Funds due to EST/BUD $9.6 $0.0 $0.0 $1.0 $10.6 targeted pay increases for staff attorneys, administrative 2008–09 staff, and law clerks and funding for an Electronic REC $10.1 $0.0 $0.0 $1.0 $11.1 Document Management Project ($0.1 million). 2010–11 BIENNIAL 5.2% NA NA 0.0% 4.7% CHANGE

Basic Civil Legal Services for the Indigent Increased funding of $21.0 million in All Funds caused EST/BUD $3.0 $0.3 $0.0 $20.1 $23.4 by a $22.0 million increase in General Revenue Funds to 2008–09 provide one-time funding to offset the revenue loss in the REC $25.0 $0.0 $0.0 $19.4 $44.4 Interest on Lawyers Trust Account (IOLTA) Program.The 2010–11 revenue loss, which compared to IOLTA funds in ﬁ scal year 2008 represents an annual loss of $10.7 million, is due to BIENNIAL 733.3% (100.0%) NA (3.5%) 89.7% declining interest rates. CHANGE

Multi-District Litigation Decreased funding of $0.5 million in General Revenue EST/BUD $1.0 $0.0 $0.0 $0.0 $1.0 Funds for grants to trial level or appellate courts to handle 2008–09 multi-district litigation cases. To date, only one trial court REC $0.5 $0.0 $0.0 $0.0 $0.5 has required grant funding. 2010–11 BIENNIAL (50.0%) NA NA NA (50.0%) CHANGE

116 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

COURT OF CRIMINAL APPEALS Appellate Court Operations An increase of $1.0 million in General Revenue Funds to EST/BUD $8.8 $0.0 $0.0 $0.7 $9.5 fund targeted pay raises for Court staff, the addition of a 2008–09 Special Counsel position, and imaging system maintenance REC $9.8 $0.0 $0.0 $0.7 $10.5 replacement. 2010–11 BIENNIAL 11.4% NA NA NA 10.5% CHANGE

Judicial Education A net increase of $0.6 million in Judicial and Court EST/BUD $0.0 $0.0 $0.0 $19.4 $19.4 Personnel Training Fund No. 540 (Other Funds) due to 2008–09 $1.0 million increase in training programs for cost increases REC $0.0 $0.0 $0.0 $20.0 $20.0 and a new training program for public defenders, and a 2010–11 reduction from 2008–09 levels of $0.4 million in refunds of unexpended balances from training entities BIENNIAL NA NA NA 3.1% 3.1% CHANGE

14 COURTS OF APPEALS Appellate Court Operations An increase of $6.8 million in General Revenue Funds to EST/BUD $59.1 $0.0 $0.0 $5.8 $64.9 provide a block grant to the 14 Courts of Appeals to provide 2008–09 similar funding for same-sized courts.Block grant funds will REC $65.9 $0.0 $0.0 $5.8 $71.7 be used to reclassify law clerks to staff attorneys, increase 2010–11 staff (14.5 FTEs) and provide targeted pay raises of no more than 10% for both attorney and non-attorney staff. BIENNIAL 11.5% NA NA 0.0% 10.5% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 117 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

OFFICE OF COURT ADMINISTRATION Information Technology Net funding decrease of $1.2 million in General Revenue EST/BUD $10.6 $0.0 $0.0 $1.1 $11.7 Funds due to start up costs of $1.4 million in the 2008–09 2008–09 biennium for two information technology projects, REC $9.4 $0.0 $0.0 $1.1 $10.5 the Automated Registry project and enabling e-ﬁ ling of 2010–11 appellate court cases (Texas Appeals Management and E-Filing System), offset by an increase of $0.1 million to BIENNIAL (11.3%) NA NA 0.0% (10.3%) provide targeted pay raises for IT staff and other increases CHANGE for training, supply and telecommunication costs.

Indigent Defense Funding increase of $6.0 million in General Revenue- EST/BUD $0.0 $53.2 $0.0 $0.0 $53.2 Dedicated funds to annualize transfers to the General 2008–09 Revenue-Dedicated Fair Defense Account No. 5073 from REC $0.0 $59.2 $0.0 $0.0 $59.2 juror pay collections. Funds will be used to increase grants 2010–11 to counties for costs of indigent defense. BIENNIAL NA 11.3% NA NA 11.3% CHANGE

Child Protection Courts Program An increase in General Revenue Funds of $0.5 million EST/BUD $4.6 $0.0 $0.0 $0.0 $4.6 to continue a child protection court established by the 2008–09 presiding judges of the administrative judicial regions REC $5.2 $0.0 $0.0 $0.0 $5.2 ($0.3 million and 2.0 FTEs), and funding for lump sum 2010–11 termination payments for retiring employees, training and mileage reimbursement ($0.2 million). BIENNIAL 13.0% NA NA NA 13.0% CHANGE

118 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 29 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: JUDICIARY (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS JUDICIARY SECTION, COMPTROLLER’S DEPARTMENT District Judge Salaries Funding reﬂ ects salaries for 449 district judges. (This is EST/BUD $64.1 $0.0 $0.0 $46.5 $110.6 an estimated appropriation.) District courts serve as the 2008–09 primary trial courts in the state, handling both civil and REC $64.2 $0.0 $0.0 $46.3 $110.5 criminal cases. The state salary for a district court judge is 2010–11 $125,000. BIENNIAL 0.2% NA NA (0.4%) (0.1%) CHANGE

Prosecutor Salaries and Supplements Funding reﬂ ects salaries and salary supplements for 148 EST/BUD $31.3 $0.0 $0.0 $7.4 $38.8 professional prosecutors, which includes district attorneys, 2008–09 criminal district attorneys and county attorneys prohibited REC $31.3 $0.0 $0.0 $7.4 $38.8 from the private practice of law; district attorneys permitted 2010–11 to engage in private practice; felony prosecutors; and, the Harris County District Attorney. The state salary for a BIENNIAL 0.0% NA NA 0.0% 0.0% professional prosecutor is $125,000; $100,000 for a district CHANGE attorney; $71,500 or $100,000 for a felony prosecutor; and, $136,023 for the Harris County District Attorney.

Visiting Judges - Regions An increase of $1.9 million in General Revenue Funds, EST/BUD $8.6 $0.0 $0.0 $0.4 $9.0 which includes $1.3 million to fund a pay raise for visiting 2008–09 judges serving in district courts, and $0.6 million for a 7 REC $10.4 $0.0 $0.0 $0.4 $10.9 percent increase in assignments. The Eightieth Legislature 2010–11 enacted legislation to increase the compensation of a visiting judge serving in district court from 85 percent to 100 BIENNIAL 20.9% NA NA 0.0% 20.0% percent of that of an active judge. CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 119 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Statutory County Judge Salary Supplements An increase of $1.4 million from the Judicial Fund No. EST/BUD $0.0 $0.0 $0.0 $32.4 $32.4 573 to annualize an increase in the salary supplement 2008–09 paid to statutory county judges. The Eightieth Legislature REC $0.0 $0.0 $0.0 $33.8 $33.8 enacted legislation which increased the annual state salary 2010–11 supplement from $35,000 to $75,000, an amount equal to 60 percent of a district judge’s salary. BIENNIAL NA NA NA 4.3% 4.3% CHANGE

Public Integrity Unit An increase of $0.5 million in All Funds to maintain 40.0 EST/BUD $5.3 $0.0 $0.0 $1.9 $7.2 FTEs, a portion of which would otherwise be reduced to 2008–09 fund forecasted increases in Travis County compensation REC $5.6 $0.0 $0.0 $2.1 $7.7 and beneﬁ ts costs, which includes an increase from the 2010–11 General Revenue – Insurance Companies Maintenance Tax for the Insurance Fraud Division ($0.2 million), a BIENNIAL 5.7% NA NA 10.5% 6.9% General Revenue Funds increase for the General State CHANGE Government Division ($0.1 million), and an increase from State Highway Fund No. 6 for the Motor Fuel Tax Fraud Division ($0.2 million).

120 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Special Prosecution Unit - Walker County A net increase of $1.5 million in All Funds, which includes: EST/BUD $6.8 $0.0 $0.0 $2.8 $9.6 (1) an increase of $1.8 million in General Revenue Funds 2008–09 for expert witnesses, court reporter and other operating REC $8.2 $0.0 $0.0 $3.0 $11.2 costs related to bringing 50 civil commitment cases to 2010–11 trial, and provide pay raises for the Civil Division; (2) an increase of $0.2 million in General Revenue Funds for BIENNIAL 20.6% NA NA 7.1% 16.7% compensatory leave and fuel and travel cost increases CHANGE for Criminal Division employees; 3) an increase of $0.2 million from Criminal Justice Division Grants to provide pay raises for the Criminal Division; and 4) an increase in General Revenue of $0.1 million to provide pay raises and fuel cost increases for the Juvenile Division, offset by a decrease in General Revenue of $0.7 million due to cost savings and one-time start up costs related to the phase-in of the newly created Juvenile Division during the 2008–09 biennium. The Special Prosecution Unit reports that 4.0 of the positions authorized for the new Division were not ﬁ lled in the 2008–09 Biennium and will not be needed in the 2010–11 Biennium.

Sex Offender Treatment and Supervision An increase of $1.4 million from General Revenue Funds EST/BUD $5.9 $0.0 $0.0 $0.0 $5.9 for costs to treat and supervise an additional 25 offenders 2008–09 per year and to maintain a ratio of 1 monitoring FTE to 10 REC $7.3 $0.0 $0.0 $0.0 $7.3 offenders. 2010–11 BIENNIAL 23.7% NA NA NA 23.7% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 121 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Montgomery Court - 435th District Court staff An increase of $0.4 million in General Revenue Funds to EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 fund a court coordinator, court reporter and other operating 2008–09 costs for the 435th District Court in Montgomery County, REC $0.4 $0.0 $0.0 $0.0 $0.4 which has special jurisdiction over civil commitment 2010–11 proceedings of sexually violent predators. BIENNIAL NA NA NA NA NA CHANGE

122 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD PUBLIC SAFETY AND CRIMINAL JUSTICE 2010–11 BIENNIAL RECOMMENDATIONS

All Funds recommendations for Public For General Revenue Funds and Selected Performance measures for agencies Safety and Criminal Justice total $10.8 General Revenue–Dedicated Funds, the in the Public Safety and Criminal Justice billion for the 2010–11 biennium, which recommendations total $8.6 billion, which function are depicted in Table 32. is an increase of $217.8 million, or 2.1 is an increase of $566.9 million, or 7.0 percent, from the 2008–09 biennium percent, from the 2008–09 biennium (Table 30). (Table 31).

TABLE 30 ALL FUNDS: PUBLIC SAFETY AND CRIMINAL JUSTICE IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Adjutant General’s Department $242.2 $180.0 ($62.2) (25.7%) Alcoholic Beverage Commission 81.9 88.8 7.0 8.5 Department of Criminal Justice 5,850.5 6,275.2 424.7 7.3 Commission on Fire Protection 5.9 6.7 0.8 14.3 Commission on Jail Standards 1.9 2.2 0.2 12.6 Juvenile Probation Commission 302.5 346.1 43.6 14.4 Commission on Law Enforcement Ofﬁ cer 6.0 7.7 1.6 27.3 Standards and Education Department of Public Safety 1,888.1 1,725.7 (162.4) (8.6) Youth Commission 561.9 430.0 (131.9) (23.5) Subtotal, Public Safety and Criminal Justice $8,940.8 $9,062.3 $121.5 1.4%

Retirement and Group Insurance $971.0 $1,095.8 $124.8 12.8% Social Security and Beneﬁ t Replacement Pay 322.8 332.3 9.5 2.9 Subtotal, Employee Beneﬁ ts $1,293.8 $1,428.1 $134.3 10.4%

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 123 PUBLIC SAFETY AND CRIMINAL JUSTICE 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 30 ALL FUNDS: PUBLIC SAFETY AND CRIMINAL JUSTICE (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Bond Debt Service Payments $528.0 $489.1 ($38.9) (7.4%) Lease Payments 4.4 4.0 (0.4) (9.6) Subtotal, Debt Service $532.4 $493.1 ($39.4) (7.4%)

Less Interagency Contracts $141.7 $140.3 ($1.4) (1.0%)

Total Article V – Public Safety and Criminal Justice $10,625.4 $10,843.2 $217.8 2.1%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

124 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD PUBLIC SAFETY AND CRIMINAL JUSTICE 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 31 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: PUBLIC SAFETY AND CRIMINAL JUSTICE IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Adjutant General’s Department $30.6 $31.5 $1.0 3.2% Alcoholic Beverage Commission 80.4 87.8 7.4 9.2 Department of Criminal Justice 5,557.4 6,009.3 451.9 8.1 Commission on Fire Protection 5.8 6.6 0.8 14.4 Commission on Jail Standards 1.9 2.1 0.2 12.9 Juvenile Probation Commission 246.9 282.0 35.0 14.2 Commission on Law Enforcement Ofﬁ cer 5.3 6.9 1.6 29.8 Standards and Education Department of Public Safety 107.3 190.6 83.3 77.7 Youth Commission 461.7 376.6 (85.1) (18.4) Subtotal, Public Safety and Criminal Justice $6,497.3 $6,993.5 $496.3 7.6%

Retirement and Group Insurance $788.4 $890.1 $101.7 12.9% Social Security and Beneﬁ t Replacement Pay 255.1 262.8 7.7 3.0 Subtotal, Employee Beneﬁ ts $1,043.5 $1,152.9 $109.4 10.5%

Bond Debt Service Payments $527.4 $489.1 ($38.3) (7.3%) Lease Payments 4.4 4.0 (0.4) (9.6) Subtotal, Debt Service $531.9 $493.1 ($38.8) (7.3%)

Total Article V – Public Safety and Criminal Justice $8,072.7 $8,639.5 $566.9 7.0%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 125 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 32 SELECTED PERFORMANCE MEASURES: PUBLIC SAFETY AND CRIMINAL JUSTICE ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011 ADJUTANT GENERAL’S DEPARTMENT Assigned Texas National Guard Strength 22,223 23,789 24,100 24,360 Number of Facilities Maintained 615 610 605 581

ALCOHOLIC BEVERAGE COMMISSION Number of Inspections Conducted by Enforcement 126,444 128,000 130,000 130,000 Agents Number of Licenses/Permits Issued 107,783 106,800 74,700 60,300

DEPARTMENT OF CRIMINAL JUSTICE Average Number of Felony Offenders Under Direct 168,925 170,065 172,895 175,075 Supervision (Adult Probation) Average Number of Offenders Incarcerated 139,582 142,308 140,529 140,019 Average Number of Offenders in Contractual Correctional 1,897 0 0 0 Bed Capacity Average Number of Offenders in Contract Prisons and 11,565 11,672 11,890 11,890 Privately Operated State Jails Average Number of Pre-parole Transferees in Pre-parole 2,271 2,242 2,277 2,277 Transfer Facilities Average Number of Offenders Under Active Parole 77,964 78,267 78,496 80,052 Supervision Three-year Recidivism Rate 27.2% 30.0% 28.0% 28.0%

COMMISSION ON FIRE PROTECTION Number of Fire Service Personnel Certiﬁ ed 27,613 26,750 26,750 26,750

126 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 32 SELECTED PERFORMANCE MEASURES: PUBLIC SAFETY AND CRIMINAL JUSTICE (CONTINUED) ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

COMMISSION ON JAIL STANDARDS Number of Annual Inspections Conducted 250 251 251 251

JUVENILE PROBATION COMMISSION Rate of Successful Completion of Court-ordered 84.0% 87.0% 87.0% 87.0% Probation Average Daily Population of Youth Supervised Under 10,677 10,683 11,823 11,801 Deferred Prosecution Average Daily Population of Youth Supervised Under 23,216 24,273 23,619 23,406 Court-ordered Probation Average Daily Population of Youth Supervised Prior to 7,557 7,839 7,654 7,721 Disposition Average Daily Population of Residential Placements 3,090 3,507 4,000 4,000 Mandatory Student Attendance Days in JJAEP During 126,542 141,064 138,937 139,676 the Regular School Year

COMMISSION ON LAW ENFORCEMENT OFFICER STANDARDS AND EDUCATION Number of New Licenses Issued to Individuals 14,764 12,000 12,500 12,500

DEPARTMENT OF PUBLIC SAFETY Trafﬁ c Law Violator Contacts 3,462,697 3,371,325 3,400,000 3,400,000 Commercial Trafﬁ c Law Violator Contacts 1,564,234 1,576,267 1,600,000 1,600,000 Number of Examinations Administered (Driver License) 5,688,113 5,597,084 6,000,000 6,000,000 Annual Texas Index Crime Rate 4,631 4,631 4,600 4,600 Number of Emergency Incidents Coordinated 6,206 4,860 5,000 5,000

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 127 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 32 SELECTED PERFORMANCE MEASURES: PUBLIC SAFETY AND CRIMINAL JUSTICE (CONTINUED) ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

YOUTH COMMISSION Average Daily Population: Institutional Programs 2,468 2,292 2,292 2,292 Average Daily Population: Contract Programs 252 340 47 36 Average Daily Population: Halfway House Programs 201 218 218 218 Three-year Reincarceration Rate 43.3% 48.0% 43.0% 43.0%

128 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 33 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: PUBLIC SAFETY AND CRIMINAL JUSTICE IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS MULTI-ARTICLE ISSUES Schedule C Pay Raise Increased funding of $24.0 million in All Funds ($20.2 EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 million in General Revenue Funds and $2.6 million in 2008–09 General Revenue–Dedicated Funds) for Salary Schedule REC $20.2 $2.6 $1.2 $0.0 $24.0 C pay raises for commissioned peace ofﬁ cers with the 2010–11 Alcoholic Beverage Commission, the Department of Criminal Justice, the Parks and Wildlife Department, and BIENNIAL NA NA NA NA NA the Department of Public Safety. CHANGE

AGENCY ISSUES ADJUTANT GENERAL’S DEPARTMENT Decreased funding of $62.2 million in All Funds ($1.0 million EST/BUD $30.6 $0.0 $180.9 $30.7 $242.2 increase in General Revenue Funds) for the operations of 2008–09 the state’s military forces. REC $31.5 $0.0 $142.1 $6.4 $180.0 2010–11 Recommendations for ﬁ scal years 2010–11 include General Revenue Fund increases of $2.0 million for the State BIENNIAL 2.9% NA (21.4%) (79.2%) (25.7%) Military Tuition Assistance Program and $0.5 million for CHANGE utilities. Reductions in General Revenue Funds include $0.4 million for bond debt service, $0.7 million for ﬁ scal year 2007 supplemental appropriations brought into the 2008–09 biennium, and $0.5 million for an unexpended balance in the State Military Tuition Assistance Program carried into the 2008–09 biennium.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 129 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 33 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: PUBLIC SAFETY AND CRIMINAL JUSTICE (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS

Reductions in Federal Funds total $38.9 million and include $35.1 million for new construction, $1.6 million for facilities maintenance, and $2.0 million for a communications grant in ﬁ scal years 2008–09.

Reductions in Other Funds total $24.3 million and include $3.1 million from the Current Fund Balance, $2.3 million in Interagency Contracts for hurricane training exercises and border security, and $18.9 million in Bond Proceeds for facilities maintenance.

ALCOHOLIC BEVERAGE COMMISSION Increased funding of $7.0 million in All Funds ($7.4 million EST/BUD $80.4 $0.0 $1.1 $0.3 $81.9 in General Revenue Funds) for agency operations. 2008–09 Recommendations for ﬁ scal years 2010–11 include General REC $87.8 $0.0 $0.7 $0.3 $88.8 Revenue Fund increases of $2.7 million for an employee 2010–11 retention and succession plan for non-Schedule C employees, $2.9 million for various information technology BIENNIAL 9.2% NA (36.4%) 0.0% 8.4% enhancements and data center services, $0.8 million for CHANGE ports of entry at the Mexican border (Anzalduas and Donna bridges), $0.5 million for the Wine Marketing Assistance Program, and $0.3 million for state approved salary increases in ﬁ scal year 2009.

130 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

DEPARTMENT OF CRIMINAL JUSTICE Incarceration in State Institutions Increased funding of $382.9 million in All Funds ($395.3 EST/BUD $4,481.1 $3.0 $40.1 $119.8 $4,644.0 million in General Revenue Funds) for the incarceration 2008–09 and treatment of adult offenders. The projected average REC $4,876.5 $3.0 $37.2 $110.2 $5,026.9 number of inmates incarcerated with these funds is 2010–11 155,196 in fi scal year 2010 and 154,686 in fi scal year 2011. Recommendations for fi scal years 2010–11 include BIENNIAL 8.8% 0.0% (7.2%) (8.0%) 8.2% General Revenue Fund increases of $22.2 million for state CHANGE approved salary increases in fi scal year 2009, $217.4 million for correctional offi cer salary increases including laundry and food service managers, $14.1 million for multi- year contract rate increases, $30.8 million for increased funding for initiatives provided by the Eightieth Legislature, $10.0 million for vehicle replacement, $86.8 million for rising inmate healthcare costs, and $30.4 million for food, overtime, utilities, hazardous duty pay, and adjustments to the corrections offi cer career ladder in fi scal year 2009. Recommendations for fi scal years 2010–11 include General Revenue Fund decreases of $14.8 million contingent on legislation relating to the release of certain inmates who complete a rehabilitation tier program and $2.6 million in estimated revenues from Texas Correctional Industries and Education and Recreation Program receipts. Recommendations also include a decrease of $10.4 million in General Obligation Bond Proceeds (Other Funds) for the repair of the prison hospital in Galveston in fi scal years 2008–09.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 131 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Contracted Temporary Capacity Decreased funding of $27.6 million in General Revenue EST/BUD $27.6 $0.0 $0.0 $0.0 $27.6 Funds for contracted temporary capacity. The reduction is 2008–09 based on January 2009 population projections that do not REC $0.0 $0.0 $0.0 $0.0 $0.0 support continued contracting for temporary capacity. 2010–11 BIENNIAL (100.0%) NA NA NA (100.0%) CHANGE

Basic Community Supervision Increased funding of $11.1 million in General Revenue EST/BUD $205.7 $0.0 $0.0 $7.4 $213.1 Funds for basic community supervision. Based on January 2008–09 2009 population projections, felony direct community REC $216.7 $0.0 $0.0 $7.4 $224.1 supervision (probation) populations will increase to an 2010–11 average of 172,895 in ﬁ scal year 2010 and 175,075 in ﬁ scal year 2011. BIENNIAL 5.3% NA NA 0.0% 5.2% CHANGE

132 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Community Supervision Diversion Programs Increased funding of $26.4 million in All Funds ($27.6 EST/BUD $214.5 $0.0 $0.0 $8.6 $223.1 million in General Revenue Funds) for grants to local 2008–09 community supervision and corrections departments. REC $242.0 $0.0 $0.0 $7.4 $249.4 Recommendations for fi scal years 2010–11 include General 2010–11 Revenue Fund increases of $3.8 million for probation residential treatment beds and $25 million for salary BIENNIAL 12.8% NA NA (14.0%) 11.8% increases for community supervision offi cers and direct CHANGE care staff, and a General Revenue Fund decrease of $1.2 million based on increased refunds from local community supervision and corrections departments during fi scal years 2008–09.

Construction and Repair of Facilities Decreased funding of $13.4 million in Other Funds (General EST/BUD $0.0 $0.0 $0.0 $103.4 $103.4 Obligation Bond Proceeds) for the repair and rehabilitation 2008–09 of facilities. Recommendations for ﬁ scal years 2010–11 REC $0.0 $0.0 $0.0 $90.0 $90.0 include $10.0 million in General Obligation Bond Proceeds 2010–11 for renovations at the Marlin Correctional Mental Health Facility and $80.0 million in General Obligation Bond BIENNIAL NA NA NA (13.0%) (13.0%) Proceeds for the repair and rehabilitation of facilities. CHANGE Reductions include $23.4 million from an unexpended balance of prior appropriations and $80.0 million appropriated in ﬁ scal years 2008–09 for the repair and rehabilitation of facilities.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 133 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Parole Supervision Increased funding of $11.5 million in General Revenue EST/BUD $189.5 $0.0 $0.0 $0.1 $189.7 Funds for parole supervision. Recommendations for 2008–09 ﬁ scal years 2010–11 include a decrease of $0.9 million REC $201.0 $0.0 $0.0 $0.1 $201.1 for projected decreases in parole supervision populations 2010–11 and an increase of $11.2 million for parole ofﬁ cer salary increases. Recommendations also include an increase BIENNIAL 6.1% NA NA 0.0% 6.0% of $1.2 million in General Revenue Funds contingent on CHANGE legislation relating to the release of certain inmates who complete a rehabilitation tier program.

Parole Residential Facilities Increased funding of $17.9 million in General Revenue EST/BUD $89.5 $0.0 $0.0 $0.3 $89.8 Funds for multi-year contract rate increases and to provide 2008–09 increased funding for initiatives by the Eightieth Legislature. REC $107.4 $0.0 $0.0 $0.3 $107.7 2010–11 BIENNIAL 20.0% NA NA 0.0% 19.9% CHANGE

Information Resources Increased funding of $11.9 million in General Revenue EST/BUD $54.6 $0.0 $0.0 $0.6 $55.3 Funds for data center services. 2008–09 REC $66.5 $0.0 $0.0 $0.6 $67.1 2010–11 BIENNIAL 21.8% NA NA 0.0% 21.3% CHANGE

134 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

JUVENILE PROBATION COMMISSION Increased funding of $43.6 million in All Funds ($35.0 EST/BUD $246.9 $0.0 $29.9 $25.7 $302.5 million in General Revenue Funds and $8.5 million in 2008–09 Federal Funds) for agency grants to local juvenile probation REC $282.0 $0.0 $38.4 $25.7 $346.1 departments. Recommendations for ﬁ scal years 2010–11 2010–11 include an increase of $35 million in General Revenue Funds for diversion pilot programs in Dallas and Travis BIENNIAL 14.2% NA 28.4% 0.0% 14.4% counties and an increase of $8.5 million in Federal Funds CHANGE for agency anticipated increases in Title IV-E Foster Care funding.

COMMISSION ON LAW ENFORCEMENT OFFICER STANDARDS AND EDUCATION Technology Performance Review Increased funding of $1.6 million in All Funds ($1.0 million EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 in General Revenue Funds and $0.5 million in General 2008–09 Revenue-Dedicated Funds) for the implementation of REC $1.0 $0.5 $0.0 $0.0 $1.6 Technology Performance Review Recommendations to 2010–11 develop an enhanced data distribution system. BIENNIAL NA NA NA NA NA CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 135 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

DEPARTMENT OF PUBLIC SAFETY Border Security Reduced funding of $21.1 million in State Highway Funds EST/BUD $63.7 $0.0 $0.0 $44.4 $108.1 (Other Funds) for one-time appropriations associated with 2008–09 DPS Rider 50, Border Security. In addition, $63.7 million REC $0.0 $63.7 $0.0 $23.4 $87.1 in General Revenue Funds were replaced with General 2010–11 Revenue-Dedicated Funds. Recommendations for ﬁ scal years 2010–11 include 66 additional full-time equivalent BIENNIAL (100.0%) NA NA (47.3%) (19.4%) positions at the Department of Public Safety (DPS) and CHANGE $13.4 million in transfers to other state agencies for enhanced border security.

Restructure of the Driver License Division Increased funding of $32.7 million in General Revenue EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 Funds for the transition of commissioned employees to a 2008–09 civilian management model, including 223 additional staff. REC $32.7 $0.0 $0.0 $0.0 $32.7 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Additional Patrol Vehicles Increased funding of $27.1 million in General Revenue EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 Funds for 450 additional patrol vehicles. 2008–09 REC $27.1 $0.0 $0.0 $0.0 $27.1 2010–11 BIENNIAL NA NA NA NA NA CHANGE

136 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Additional Personnel Increased funding of $11.2 million in General Revenue EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 Funds for narcotics ofﬁ cers, crime lab personnel, regulatory 2008–09 personnel, information management, and staff services, REC $11.2 $0.0 $0.0 $0.0 $11.2 totaling 95 additional staff. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Physical Plant Increased funding of $64.7 million in Other Funds for a EST/BUD $0.0 $0.0 $0.0 $101.3 $101.3 new regional offi ce and crime lab in Lubbock, new offi ces 2008–09 in McAllen and Rio Grande City, crime lab expansions, REC $0.0 $0.0 $0.0 $166.0 $166.0 an emergency vehicle operations course, and deferred 2010–11 maintenance. Recommendations for fi scal years 2010–11 include an increase of $70.4 million in General Obligation BIENNIAL NA NA NA 63.9% 63.9% Bond Proceeds (Other Funds) caused by an increase of CHANGE $10.0 million for deferred maintenance and an unexpended balance of $131.6 million for construction projects funded during fi scal years 2008–09. Recommendations also include a reduction of $5.6 million in State Highway Funds (Other Funds) primarily caused by increased agency utility costs in fi scal year 2008.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 137 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Non-Schedule C Salary Increases Increased funding of $8.9 million in General Revenue EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 Funds for salary increases for Driver License Examiners/ 2008–09 Technicians, Crime Analysts, and Information Management REC $8.9 $0.0 $0.0 $0.0 $8.9 Services. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Operational Costs for the Emergency Vehicle Operations Course Increased funding of $2.5 million in General Revenue EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 Funds for personnel and operating costs for the emergency 2008–09 vehicle operations course, including 11 additional staff. REC $2.5 $0.0 $0.0 $0.0 $2.5 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Driver License Reengineering Reduced funding of $23.4 million in State Highway Funds EST/BUD $0.0 $0.0 $0.0 $32.0 $32.0 (Other Funds) caused by unexpended balances from 2008–09 appropriations for driver license reengineering during ﬁ scal REC $0.0 $0.0 $0.0 $8.6 $8.6 years 2008–09. 2010–11 BIENNIAL NA NA NA (73.1%) (73.1%) CHANGE

138 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Federal Funds Reduced funding of $244.3 million in Federal Funds EST/BUD $0.0 $0.0 $604.0 $0.0 $604.0 primarily caused by increased disaster-related assistance 2008–09 and homeland security funding received in ﬁ scal year 2008. REC $0.0 $0.0 $359.7 $0.0 $359.7 This represents an agency total. 2010–11 BIENNIAL NA NA (40.4%) NA (40.4%) CHANGE

YOUTH COMMISSION Residential Services Reduced funding of $81.1 million in All Funds ($78.9 EST/BUD $407.7 $0.0 $23.0 $17.6 $448.3 million in General Revenue Funds) primarily caused by an 2008–09 institutional capacity reduction of 1,496 beds; a reduction REC $328.8 $0.0 $22.0 $16.4 $367.2 in contracted capacity based on January 2009 population 2010–11 projections; a reduction of 717 full-time-equivalents (FTE); and one-time appropriations made by the Eightieth BIENNIAL (19.4%) NA (4.3%) (6.8%) (18.1%) Legislature for video surveillance equipment and an CHANGE electronic medical records system. Recommendations for fi scal years 2010–11 include an increase of $15.7 million in General Revenue Funds for juvenile correctional offi cer pay increases. The projected average daily population in residential services is 2,557 in fi scal year 2010 and 2,546 in fi scal year 2011.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 139 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Facilities Construction and Renovation Reduced funding of $44.6 million in All Funds ($43.5 EST/BUD $0.0 $0.0 $1.1 $58.5 $59.6 million in Other Funds) for the construction and renovation 2008–09 of facilities. The reduction is caused by one-time REC $0.0 $0.0 $0.0 $15.0 $15.0 appropriations of General Obligation Bonds Proceeds 2010–11 (Other Funds) for construction, renovation, and repair projects in ﬁ scal years 2008–09. Recommendations for BIENNIAL NA NA (100.0%) (74.4%) (74.8%) ﬁ scal years 2010–11 include $15.0 million in General CHANGE Obligation Bond Proceeds for repair and rehabilitation of existing facilities.

Central Administration Reduced funding of $4.3 million in General Revenue Funds EST/BUD $16.8 $0.0 $0.0 $0.0 $16.8 caused by a reduction of 24.8 FTEs. 2008–09 REC $12.5 $0.0 $0.0 $0.0 $12.5 2010–11 BIENNIAL (25.6%) NA NA NA (25.6%) CHANGE

140 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD NATURAL RESOURCES 2010–11 BIENNIAL RECOMMENDATIONS

All Funds recommendations for Natural For General Revenue Funds and Selected performance measures for agencies Resources total $3.6 billion for the General Revenue–Dedicated Funds, the in the Natural Resources function are 2010–11 biennium, which is an increase recommendations total $2.3 billion, which depicted in Table 36. of $247.3 million, or 7.4 percent, from is an increase of $187.9 million, or 8.8 the 2008–09 biennium (Table 34). percent, from the 2008–09 biennium (Table 35).

TABLE 34 ALL FUNDS: NATURAL RESOURCES IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Department of Agriculture $777.6 $876.8 $99.2 12.8% Animal Health Commission 29.5 34.6 5.2 17.5 Commission on Environmental Quality 1,091.4 1,073.8 (17.7) (1.6) General Land Ofﬁ ce and Veterans’ Land Board 155.2 157.8 2.5 1.6 Parks and Wildlife Department 686.9 653.5 (33.4) (4.9) Railroad Commission 155.4 140.3 (15.1) (9.7) Soil and Water Conservation Board 37.0 59.2 22.2 60.1 Water Development Board 109.7 101.7 (7.9) (7.2) Debt Service Payments - Non-Self Supporting 102.1 246.0 143.9 141.0 G.O. Water Bonds Subtotal, Natural Resources $3,144.7 $3,343.6 $198.9 6.3%

Retirement and Group Insurance $171.1 $190.8 $19.8 11.6% Social Security and Beneﬁ t Replacement Pay 67.4 68.8 1.4 2.1 Subtotal, Employee Beneﬁ ts $238.5 $259.7 $21.2 8.9%

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 141 NATURAL RESOURCES 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 34 ALL FUNDS: NATURAL RESOURCES (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Bond Debt Service Payments $15.8 $23.1 $7.3 46.1% Lease Payments 8.4 7.8 (0.6) (7.0) Subtotal, Debt Service $24.2 $30.9 $6.7 27.6%

Less Interagency Contracts $63.4 $42.9 ($20.5) (32.3%)

Article VI – Natural Resources $3,344.0 $3,591.3 $247.3 7.4%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding.Therefore, table amounts may not add because of rounding.

142 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD NATURAL RESOURCES 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 35 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: NATURAL RESOURCES IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Department of Agriculture $127.6 $139.7 $12.2 9.6% Animal Health Commission 19.8 25.5 5.7 28.7 Commission on Environmental Quality 980.6 976.1 (4.5) (0.5) General Land Ofﬁ ce and Veterans’ Land Board 29.3 25.2 (4.0) (13.8) Parks and Wildlife Department 490.4 499.9 9.5 1.9 Railroad Commission 119.3 122.3 3.0 2.5 Soil and Water Conservation Board 24.4 47.1 22.7 93.1 Water Development Board 56.3 62.0 5.8 10.3 Debt Service Payments - Non-Self Supporting 81.4 189.4 108.1 132.8 G.O. Water Bonds Subtotal, Natural Resources $1,929.0 $2,087.4 $158.5 8.2%

Retirement and Group Insurance $142.7 $160.5 $17.8 12.5% Social Security and Beneﬁ t Replacement Pay 53.6 55.1 1.5 2.8 Subtotal, Employee Beneﬁ ts $196.3 $215.6 $19.3 9.8%

Bond Debt Service Payments $10.9 $21.6 $10.7 97.6% Lease Payments 8.4 7.8 (0.6) (7.0) Subtotal, Debt Service $19.4 $29.5 $10.1 52.1%

Article VI – Natural Resources $2,144.6 $2,332.5 $187.9 8.8%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 143 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 36 SELECTED PERFORMANCE MEASURES: NATURAL RESOURCES ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011 DEPARTMENT OF AGRICULTURE Average Number of Children and Adults Served Meals 258,359 273,765 287,178 292,921 through Child and Adult Care Food Programs Per Day Number of Hours Spent at Inspections of Plant 7,215 9,100 9,900 9,900 Shipments and Regulated Articles Number of Weights and Measures Device Inspections 122,462 100,000 132,462 132,462 Conducted

COMMISSION ON ENVIRONMENTAL QUALITY Number of Dam Safety Assessments 430 430 730 1,030 Number of Federal Air Quality Permits Reviewed 1,100 800 800 800 Number of Mobile Source On-road Air Quality 1,268 1,250 1,500 1,500 Assessments Number of Petroleum Storage Tank Reimbursement 3,500 2,800 1,400 900 Applications Processed

PARKS AND WILDLIFE DEPARTMENT Number of State Parks in Operation 90 91 91 91 Number of Major Repair/Construction Projects 76 47 45 40 Completed

RAILROAD COMMISSION Number of Rebate and Incentive Applications Handled 4,310 3,351 3,351 3,351

WATER DEVELOPMENT BOARD Number of Commitments to State Water Plan Projects 15 20 19 17 Number of Completed Economically Distressed Areas 70 76 81 85 Projects

144 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 37 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: NATURAL RESOURCES IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS

DEPARTMENT OF AGRICULTURE Food and Nutrition Increased funding of $83.0 million in All Funds, including EST/BUD $6.9 $0.0 $633.8 $0.0 $640.7 an increase of $84.1 million in Federal Funds offset by a 2008–09 decrease of $0.9 million in General Revenue Funds, in the REC $5.8 $0.0 $717.9 $0.0 $723.7 food and nutrition programs due to anticipated increases in 2010–11 participation rates. BIENNIAL (15.9%) NA 13.3% NA 13.0% CHANGE

Specialty Crop Block Grant Program Increased funding of $2.0 million in Federal Funds for the EST/BUD $0.0 $0.0 $2.0 $0.0 $2.0 Specialty Crop Block Grant Program due to an anticipated 2008–09 increase in federal appropriations for specialty crops in the REC $0.0 $0.0 $4.0 $0.0 $4.0 2008 Farm Bill. 2010–11 BIENNIAL NA NA 100.0% NA 100.0% CHANGE

Weights and Measures Increased funding of $2.5 million in All Funds, including EST/BUD $7.0 $0.0 $0.0 $0.0 $7.0 a $0.9 million increase in General Revenue Funds and 2008–09 a $1.7 million increase in Other Funds, for the Weights REC $7.9 $0.0 $0.0 $1.7 $9.6 and Measures Program to increase inspections, conduct 2010–11 blitz operations based upon trend analysis, and to begin conducting fuel quality testing and enforcement. BIENNIAL 12.9% NA NA NA 37.1% ($1.0 million in Other Funds for fuel quality testing and CHANGE enforcement is contingent upon passage of legislation.)

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 145 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 37 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: NATURAL RESOURCES (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS Biosecurity Inspection Initiative Increased funding of $1.6 million in General Revenue EST/BUD $5.0 $0.0 $0.1 $0.1 $5.2 Funds to increase the number of road station inspections, 2008–09 expand the number of market blitz operations, and conduct REC $6.5 $0.0 $0.1 $0.1 $6.7 pathway analysis and risk assessments to enhance 2010–11 quarantine enforcement activities to prevent possible threats from plant pests. BIENNIAL 30.0% NA 0.0% 0.0% 28.8% CHANGE

Boll Weevil Eradication Increased funding of $10.0 million in General Revenue EST/BUD $29.0 $0.0 $0.0 $0.0 $29.0 Funds for the Boll Weevil Eradication program for 2008–09 assistance to speciﬁ c boll weevil eradication zones affected REC $39.0 $0.0 $0.0 $0.0 $39.0 by hurricanes, tropical storms, and re-infestation from 2010–11 neighboring areas. BIENNIAL 34.5% NA NA NA 34.5% CHANGE

146 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

ANIMAL HEALTH COMMISSION Field Operations An All Funds Increase of $5.1 million, which includes $5.5 EST/BUD $12.8 $0.0 $8.4 $0.0 $21.2 million in General Revenue for fever tick inspections, 2008–09 treatment and control in South Texas ($1.0 million and 5 REC $18.3 $0.0 $8.0 $0.0 $26.3 FTEs), a $2 per head increase in payments to livestock 2010–11 markets for fi rst point testing of brucellosis in test eligible cattle that are sold at livestock markets ($4.0 million), and BIENNIAL 42.9% NA (4.3%) NA 24.1% funding that allows the agency to reimburse its fi eld staff CHANGE for mileage at the maximum allowable reimbursement rate ($0.2 million). Funding for the fi rst point testing payment increase is contingent upon the collection of suffi cient revenue from a new $2 per head fee. A $0.4 million decrease in Federal Funds due to one-time expenditures in 2008–09 (e.g., hand-held devices and interfaces for remote electronic collection of animal identifi cation information; fever tick disease prevention equipment) slightly offsets the General Revenue increase.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 147 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Cross-Agency Issues Petroleum Storage Tank Reimbursement Program A decrease in General Revenue–Dedicated Funds of $48.5 EST/BUD $0.0 $133.9 $4.4 $0.0 $138.3 million for the Petroleum Storage Tank (PST) Remediation 2008–09 program because of an expected decline in the number REC $0.0 $85.3 $3.0 $0.0 $88.3 of reimbursement payments the agency expects to make, 2010–11 as a result of the PST Remediation program ending on September 1, 2011. Although such reimbursement costs BIENNIAL NA (56.9%) (33.2%) (NA) (36.2%) were paid in 2008–09 out of the PST Remediation Account CHANGE No. 655, 2010–11 funding includes a $22.1 million decrease out of the Waste Management Account No. 549 and a $26.4 million decrease out of the PST Remediation Account because of $15.3 million in administrative costs and $7.3 million in costs associated with the PST regulatory program that were moved from the Waste Management Account to the PST Remediation Account as a result of changes regarding the use of such funds from passage of House Bill 3544, Eightieth Legislature, 2007.

Data Services Center An increase of $5.4 million in General Revenue for cost increases in the state Data Center Consolidation contract.

148 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Information Technology – Application Maintenance and Microsoft Enterprise A $2.9 million increase in General Revenue–Dedicated Funds to provide application maintenance for information systems, including some which were put in place prior to 2004.

Indirect Cost Reallocations As a result of an analysis of the agency’s indirect cost allocations, appropriations out of the following General Revenue–Dedicated accounts were made to better reﬂ ect indirect costs in relation to program expenditures: an increase of $8.0 million out of the Water Resource Management Account No. 153; an increase of $0.5 million out of the Occupational Licensing Account No. 468; a decrease of $6.0 million out of the Clean Air Account No. 151; and a decrease of $2.0 million out of the Hazardous and Solid Waste Remediation Account No. 550.

Strategy Level Changes Air Quality Assessment and Planning An All Funds increase of $11.2 million in this strategy, EST/BUD $0.0 $498.5 $17.4 $0.3 $516.2 consisting of the following funding changes. 2008–09 REC $0.2 $512.5 $14.8 $0.0 $527.4 2010–11 BIENNIAL NA 2.8% (15.1%) (100.0%) 2.2% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 149 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

(1) A $7.3 million increase in General Revenue–Dedicated Funds ($5.8 million out of the Clean Air Account No. 151 and $1.5 million out of the Operating Permits Account No. 5094) and 22.0 FTEs in 2010 and 30.0 FTEs in 2011 to handle increased duties associated with the U.S. Environmental Protection Agency’s (US EPA) recent eight-hour ozone regulations for air quality standards. It is expected that four additional areas in Texas will be classiﬁ ed as nonattainment for national ambient air quality standards, and the funds would be used for additional modeling, data analysis, and the development of state implementation plans for the newly added areas. (2) A $3.0 million increase out of the Clean Air Account No. 151 (General Revenue–Dedicated Funds) for air quality planning in three additional areas that are being made eligible for funding: El Paso, Waco, and Beaumont. The funds would be used by local governments in attempts to maintain the areas’ attainment status for national ambient air quality standards. (3) A $1.4 million increase out of the General Revenue– Dedicated Clean Air Account No. 151 for Particulate Matter 2.5 and Texas/Mexico Border Activities to replace Federal Funds that have been used on the activity in past biennia. (4) A $1.3 million increase out of the General Revenue– Dedicated Clean Air Account No. 151 and 1.0 FTE to establish an air permits allowables database. (5) A $1.0 million out of the General Revenue–Dedicated Clean Air Account No. 151 for the agency to contract with the Mickey Leland National Urban Air Toxics Research Center for a study on air pollution risks and the health effects of air toxins.

150 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

(6) A $2.6 million decrease in Federal Funds from the U.S. EPA because of a $1.0 million one-time Core Air Performance Partnership Grant (PPG); an anticipated change in the match ratio for Particulate Matter 2.5 Air Monitoring grants from 100% to 60% federal resulting in a decrease of $0.6 million; an anticipated decrease in BioWatch funding of $0.5 million; and a PPG Special Projects grant of $0.5 million not anticipated to be received in 2010–11.

Water Resource Assessment and Planning A decrease in All Funds of $1.2 million consisting of the EST/BUD $11.6 $28.8 $23.5 $0.0 $63.9 following changes: an increase of $2.5 million in General 2008–09 Revenue (including 12.0 FTEs in 2010 and 24.0 FTEs in REC $14.7 $29.7 $18.2 $0.0 $62.7 2011) for the expansion of the Dam Safety program and to 2010–11 meet existing and emerging infrastructure inspection needs; a $0.9 million increase in General Revenue-Dedicated BIENNIAL 27.5% 3.1% (22.3%) NA (1.8%) Funds (Water Resource Management Account No. 153) to CHANGE accommodate salary cost increases for federally-funded FTEs under ﬁ xed grant amounts; and, a $5.2 million decrease in Federal Funds from the US EPA reﬂ ecting the closure of the one-time 2004–08 and 2005–10 Section 319(h) Non-Point Source Categorical grants.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 151 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Hazardous Materials Cleanup An All Funds increase of $5.5 million, consisting of the EST/BUD $0.0 $57.0 $9.0 $0.8 $66.9 following changes: an $8.0 million increase in General 2008–09 Revenue–Dedicated Funds (Solid Waste Disposal Account REC $0.1 $63.5 $8.7 $0.0 $72.3 No. 5000) for the cleanup of additional priority Superfund 2010–11 hazardous waste sites and cost increases related to hazardous waste cleanups; a decrease of $1.5 million in BIENNIAL NA 11.4% (3.7%) (100.0%) 8.2% General Revenue–Dedicated Funds (Waste Management CHANGE Account No. 549) because of a one-time appropriation in House Bill 15, Eightieth Legislature, 2007, for a cleanup at the Walker Branch Facility in Fort Worth; a $0.8 million decrease in Appropriated Receipts for non-recurring cost recovery for the Ballard Pits cleanup project near Corpus Christi; and a $0.3 million decrease in Federal Funds for environmental restoration.

GENERAL LAND OFFICE AND VETERANS’ LAND BOARD Coastal Management and Coastal Erosion Control Response An All Funds increase of $10.4 million, consisting primarily EST/BUD $1.2 $1.5 $15.9 $28.9 $47.4 of: an $8.3 million increase in Federal Funds owing to a 2008–09 delay in the receipt of Coastal Impact Assistance from the REC $1.2 $1.4 $24.2 $30.9 $57.8 US Mineral Management Service from Federal Appropriation 2010–11 Year 2007 (total of $25 million), resulting in a portion of the funds being carried forward into 2010–11; and a net increase BIENNIAL 6.3% (4.0%) 52.1% 7.3% 22.0% of $2.2 million in Appropriated Receipts (Other Funds) CHANGE reﬂ ecting an expected increase in local matching funds for shared project costs for the Coastal Erosion Planning and Response Act (CEPRA) program.

152 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Oil Spill Response and Oil Spill Prevention An All Funds decrease of $2.2 million, primarily due to a one- EST/BUD $0.0 $23.2 $0.8 $0.0 $24.0 time appropriation in House Bill 15, Eightieth Legislature, 2008–09 Regular Session from the General Revenue–Dedicated REC $0.0 $21.1 $0.7 $0.0 $21.8 Coastal Protection Account No. 027 for the removal of an 2010–11 offshore derelict oil structure; and one-time relocation costs for the Interstate Oil and Gas Compact Commission in the BIENNIAL NA (9.1%) (8.0%) NA (9.1%) 2008–09 Biennium. The relocation costs were also funded CHANGE out of the General Revenue–Dedicated Coastal Protection Account No. 027.

State Veterans’ Homes An All Funds decrease of $2.2 million due to a $2.0 million EST/BUD $2.0 $0.0 $0.0 $5.7 $7.7 one-time grant from the General Revenue Fund for the 2008–09 Hearts Veterans’ Museum in 2008–09. REC $0.0 $0.0 $0.0 $5.5 $5.5 2010–11 BIENNIAL (100%) NA NA (3.1%) (28.2%) CHANGE

State Veterans’ Cemeteries An All Funds decrease of $2.7 million, which includes a $4.7 EST/BUD $0.0 $0.0 $12.7 $6.9 $19.6 million decrease in Federal Funds due to the anticipated 2008–09 completion of construction on the Abilene Veterans Cemetery REC $0.0 $0.0 $8.0 $8.8 $16.8 in May 2009, and a $1.7 million increase in Other Funds 2010–11 (Veterans Homes Administration Fund No. 374) to reﬂ ect two full years of operating costs for the Abilene Veterans BIENNIAL NA NA (37.2%) 28.9% (14.0%) Cemetery in 2010–11. CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 153 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TEXAS PARKS AND WILDLIFE DEPARTMENT Cross-Agency Issue An increase of $10.7 million above the Biennial Revenue Estimate from the General Revenue–Dedicated Game, Fish and Water Safety Account No. 9 to address salary and equity compensation issues for staff in wildlife, ﬁ shery, law enforcement, and support divisions. (Contingent upon Comptroller’s certiﬁ cation.)

Wildlife Conservation An All Funds decrease of $23.9 million comprised of the EST/BUD $0.0 $20.2 $44.1 $0.6 $64.9 following: a $20.6 million decrease in Federal Funds, 2008–09 primarily for one-time pass through grants to Travis County REC $0.0 $17.5 $23.5 $0.0 $41.0 and the City of San Marcos for acquisition of endangered 2010–11 species habitat; a net decrease of $2.7 million in the General Revenue–Dedicated Game, Fish and Water BIENNIAL NA (13.4%) (46.7%) (99.3%) (36.8%) Safety Account No. 9 for funds reallocated to the Technical CHANGE Guidance and Hunting and Wildlife Recreation strategies ($5.4 million) offset by an increase of $3.8 million to address salary and equity compensation issues for wildlife staff; and a decrease of $0.6 million in Appropriated Receipts (Other Funds), which are budgeted as they are received.

154 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Coastal and Inland Fisheries Management Decreased funding of $7.8 million in Federal Funds, EST/BUD $0.0 $26.6 $26.7 $6.9 $60.2 primarily for one-time boat ramp repairs, oyster habitat 2008–09 restoration, and assistance to fi sherman for bycatch REC $0.0 $29.4 $18.9 $1.0 $49.3 reduction devices ($2.4 million); completed construction 2010–11 projects, including a new building at Sea Center Texas ($2.1 million), and a completed coastal wetlands restoration BIENNIAL NA 10.5% (29.2%) (86.2%) (18.2%) project in Galveston County ($1.0 million); and, one-time CHANGE capital purchases ($0.3 million). Also, a decrease of $5.7 million in donations (Appropriated Receipts) received for the Artifi cial Reef Program for projects such as the sinking of the Texas Clipper. A net increase of $2.8 million in General Revenue-Dedicated accounts, including an increase in the Game, Fish and Water Safety Account No. 9 to address salary and equity compensation issues for coastal and inland fi sheries staff ($3.8 million) offset by a $1.1 million decrease in General Revenue–Dedicated accounts, primarily due to the reallocation of $0.7 million in Game, Fish and Water Safety Account No. 9 funds to the Inland Hatcheries Operations strategy.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 155 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

State Park Operations Increased funding of $6.4 million in All Funds, which EST/BUD $65.2 $66.6 $0.7 $1.7 $134.1 includes an agency reallocation of funds and 12 FTEs from 2008–09 the Parks Support strategy of certain functions, including REC $115.8 $24.1 $0.6 $0.0 $140.5 the reservations call center and concessions to more 2010–11 accurately reﬂ ect all state park activities ($5.7 million from General Revenue and the General Revenue–Dedicated BIENNIAL 77.6% (63.8%) (14.3%) (100.0%) 4.8% State Parks Account No. 64). Also includes an increase of CHANGE $2.4 million from the General Revenue–Dedicated State Parks Account No. 64 and 17.2 FTEs for state park ﬁ scal controls and other audit requirements, and an increase of $1.1 million and 6.0 FTEs in 2010 and 10.5 FTEs in 2011 from General Revenue to develop, operate, and maintain an off-road vehicle recreation site in the Canadian River Corridor. These amounts are offset by a decrease of $2.0 million in General Revenue for one-time matching funds in 2008–09 for the transfer of the Texas State Railroad and a decrease of $0.6 million from the General Revenue–Dedicated Texas Parks and Wildlife Capital and Conservation Account No. 5004 for the use of one-time balances in license plate receipts.

156 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Local Park Grants Decreased funding of $16.7 million for the use of one- EST/BUD $29.1 $16.7 $2.7 $0.0 $48.5 time balances in the General Revenue–Dedicated Texas 2008–09 Recreation and Parks Account No. 467 for designated local REC $23.0 $5.4 $2.4 $0.0 $30.7 park grants in the 2008–09 biennium; and a decrease of 2010–11 $0.8 million in the Sporting Goods Sales Tax transfer to the Texas Recreation and Parks Account No. 467 (General BIENNIAL (21.0%) (67.7%) (11.1%) NA (36.7%) Revenue) which was reallocated to the Boating Access and CHANGE Other Grants strategy for the Community Outdoor Outreach program.

Law Enforcement Programs and Warden Training Decreased funding of $0.7 million in All Funds, which EST/BUD $4.1 $81.2 $10.0 $0.6 $95.9 includes a decrease of $1.8 million in Federal Funds for 2008–09 joint border security operations ($1.1 million) and enhanced REC $4.1 $82.4 $8.1 $0.5 $95.2 enforcement of federal law for commercial, recreational, 2010–11 and charter vessels ﬁ shing in the Gulf of Mexico; offset by an increase of $1.3 million to annualize the 2009 statewide BIENNIAL 0.0% 1.5% (19.0%) (16.7%) (0.7%) employee pay raise ($0.7 million) and to address salary CHANGE and equity compensation issues for law enforcement administrative staff ($0.6 million) from the General Revenue–Dedicated Game, Fish and Water Safety Account No. 9. [Also added but not reﬂ ected in the law enforcement strategies was $2.9 million for Schedule C pay increases ($2.6 million from the Game, Fish and Water Safety Account No. 9 and $0.3 million from Federal Funds) and $3.4 million in All Funds for Border Security.]

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 157 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Improvements and Major Repairs Increased funding of $14.9 million in All Funds, which EST/BUD $25.2 $21.7 $5.4 $49.7 $101.9 includes an increase of $28.0 million in General Obligation 2008–09 (GO) bonds for ongoing repairs to the agency’s facility REC $25.7 $23.2 $5.9 $62.0 $116.8 infrastructure, including headquarters, fi eld offi ces, state 2010–11 parks, natural areas, historic sites, wildlife management areas and hatcheries ($18.0 million) and state park (SP) BIENNIAL 2.0% 6.9% 9.3% 24.7% 14.6% weather-related repairs at Mother Neff SP, Palo Duro CHANGE SP, and Government Canyon State Natural Area ($10.0 million). Also, an increase of $11.9 million for unexpended balances carried forward from fi scal year 2009 to fi scal year 2010 for ongoing repairs at facilities statewide ($10.2 million in General Obligation Bonds and $1.7 million in the General Revenue–Dedicated Game, Fish and Water Safety Account No. 9), offset by a decrease of $15.0 million in Revenue Bonds for the East Texas Fish Hatchery, and a decrease of $10.1 million in donations (Appropriated Receipts) received for the Game Warden Academy, the Battleship TEXAS and other capital projects statewide.

RAILROAD COMMISSION Promote LP Gas Usage A decrease in All Funds of $16.1 million due to a $16 EST/BUD $0.9 $4.2 $0.2 $17.7 $23.0 million decrease in Interagency Contracts (Other Funds) 2008–09 for a one-time Texas Emissions Reduction Plan (TERP) REC $0.9 $4.2 $0.0 $1.7 $6.8 grant from the Texas Commission on Environmental 2010–11 Quality in 2008–09 which is not expected to continue in 2010–11. BIENNIAL 0.0% 0.0% (100.0%) (90.2%) (70.3%) CHANGE

158 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Ensure Pipeline and LPG/CNG/LNG Safety An All Funds increase of $2.3 million, consisting of $1.6 EST/BUD $7.5 $0.0 $3.2 $0.1 $10.9 million in General Revenue and $0.7 million in Federal 2008–09 Funds, for 13.5 additional FTEs to handle a greater level REC $9.1 $0.0 $4.0 $0.1 $13.2 of reporting of pipeline safety issues than expected. The 2010–11 appropriations include $1.2 million in General Revenue and $0.6 million in Federal Funds that are contingent upon BIENNIAL 21.4% NA 22.0% 0.0% 21.4% passage of legislation, increasing the maximum allowable CHANGE pipeline safety fee from $0.50 to $1.0 per service line.

Oil and Gas Monitoring and Inspections An All Funds Increase of $1.0 million, consisting of a $1.7 EST/BUD $24.0 $1.6 $0.4 $1.0 $26.9 million increase ($1.4 million in General Revenue and a 2008–09 $0.4 million increase in the General Revenue–Dedicated REC $25.3 $2.0 $0.4 $0.3 $27.5 Oil Field Cleanup Account No. 145) to annualize the 2009 2010–11 pay raise and ﬁ ll vacant FTE positions, and a decrease of $0.7 million in Other Funds primarily due to the completion BIENNIAL 5.6% 20.7% 2.7% (74.6%) 2.2% of several water quality projects funded by the U.S. EPA CHANGE through the TCEQ.

Surface Mining Reclamation An All Funds decrease of $1.7 million because of a one- EST/BUD $0.3 $0.0 $8.0 $0.0 $8.3 time distribution of Federal Funds from the Surface Mining 2008–09 Control and Reclamation Act which occurred in 2008-09, REC $0.2 $0.0 $6.4 $0.0 $6.6 but is not expected in 2010–11. 2010–11 BIENNIAL (7.9%) NA (20.7%) NA (20.3%) CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 159 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

SOIL AND WATER CONSERVATION BOARD Water Supply Enhancement Increase funding by $6.8 million in General Revenue EST/BUD $4.3 $0.0 $0.0 $0.0 $4.3 Funds, including $4.8 million in General Revenue for the 2008–09 Water Supply Enhancement Program to remove water- REC $11.1 $0.0 $0.0 $0.0 $11.1 depleting brush and trees, such as juniper, mesquite, and 2010–11 salt cedar from various watersheds, and $2.0 million in General Revenue for a Water Supply Enhancement project BIENNIAL 158.1% NA NA NA 158.1% for the Guadalupe River Basin. CHANGE

Flood Control Dam Operation, Maintenance, and Structural Repair A $15.0 million increase in General Revenue to provide EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 operations and maintenance, structural repair, and 2008–09 rehabilitation needs for ﬂ ood control dams across the REC $15.0 $0.0 $0.0 $0.0 $15.0 State. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

WATER DEVELOPMENT BOARD One-time Expenditures An All Funds decrease of $8.2 million ($6.9 million in EST/BUD $6.9 $0.0 $0.0 $1.4 $8.3 General Revenue Funds and $1.4 million in Other Funds), 2008–09 related to funding for one-time expenditures in 2008–09 REC $0.0 $0.0 $0.0 $0.0 $0.0 including $6.2 million for the La Joya Special Utility District 2010–11 Water Infrastructure Project and $2.0 million for the Boeye Reservoir. BIENNIAL (100.0%) NA NA NA (100.0%) CHANGE

160 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Economically Distressed Areas Program An Other Funds decrease of $2.0 million for Economically EST/BUD $0.0 $0.0 $0.0 $2.0 $2.0 Distressed Areas Program projects funded through the 2008–09 Water Assistance Fund. REC $0.0 $0.0 $0.0 $0.0 $0.0 2010–11 BIENNIAL NA NA NA (100.0%) (100.0%) CHANGE

Administration of State Financial Assistance Programs Increase General Revenue Funds by $3.4 million for the EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 administration of state ﬁ nancial assistance programs 2008–09 currently being funded out of the Water Development Fund. REC $3.4 $0.0 $0.0 $0.0 $3.4 (Replaces funding previously provided by bond proceeds 2010–11 and loan repayments that are off-budget.) BIENNIAL NA NA NA NA NA CHANGE

Groundwater Science for Groundwater Management Increase General Revenue Funds by $3.7 million to study EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 the brackish groundwater resources of the state, study 2008–09 the minor aquifers of Texas, to aggressively update the REC $3.7 $0.0 $0.0 $0.0 $3.7 groundwater availability models, to increase salaries to 2010–11 retain and recruit groundwater modelers, to develop the capability of developing three-dimensional visual tools BIENNIAL NA NA NA NA NA of the state’s aquifers, and to study the effects of natural CHANGE and anthropogenic-inﬂ uenced water quality on fresh groundwater quantity.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 161 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Bexar-Medina-Atascosa Water Control and Improvement District #1 Increase General Revenue Funds by $4.0 million to EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 provide grant funding for repairs to the Medina Lake Dam. 2008–09 REC $4.0 $0.0 $0.0 $0.0 $4.0 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Edwards Aquifer Recovery Implementation Program Increase Other Funds by $1.7 million to provide funding EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 for grants and studies related to the Edwards Aquifer 2008–09 Recovery Implementation Program. REC $0.0 $0.0 $0.0 $1.7 $1.7 2010–11 BIENNIAL NA NA NA NA NA CHANGE

DEBT SERVICE PAYMENTS – NON-SELF SUPPORTING G.O. WATER BONDS EDAP Debt Service An All Funds increase of $10.7 million, including an EST/BUD $32.7 $0.0 $0.0 $6.3 $39.0 increase of $10.2 million in General Revenue Funds and 2008–09 $0.5 million in Other Funds, to primarily fund 2010–11 REC $42.9 $0.0 $0.0 $6.8 $49.7 debt service requirements for $85.0 million in new 2010–11 General Obligation (GO) Bond issues for the Economically Distressed Areas Program. Of this amount, $35.0 million BIENNIAL 31.2% NA NA 7.9% 27.4% represents bonds to implement the State Water Plan. CHANGE

162 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

State Participation Program An All Funds increase of $23.9 million, including an EST/BUD $10.6 $0.0 $0.0 $14.4 $25.0 increase of $21.2 million in General Revenue Funds and 2008–09 $2.7 million in Other Funds, to primarily fund 2010–11 debt REC $31.8 $0.0 $0.0 $17.1 $48.9 service requirements for $150.0 million in new GO Bond 2010–11 issues for the State Participation Program. Of this amount, $100.0 million represents bonds to implement the State BIENNIAL 200.0% NA NA 18.8% 95.6% Water Plan. CHANGE

Agricultural Water Conservation A $5.4 million decrease in General Revenue due to the EST/BUD $5.4 $0.0 $0.0 $0.0 $5.4 Agricultural Water Conservation bonds (originally issued 2008–09 in ﬁ scal year 2003) being completely paid off in ﬁ scal year REC $0.0 $0.0 $0.0 $0.0 $0.0 2009. 2010–11 BIENNIAL (100.0%) NA NA NA (100.0%) CHANGE

Water Infrastructure Fund An All Funds increase of $114.7 million, including an EST/BUD $32.6 $0.0 $0.0 $0.0 $32.6 increase of $82.1 million in General Revenue Funds and 2008–09 $32.6 million in Other Funds, to primarily fund 2010–11 REC $114.7 $0.0 $0.0 $32.6 $147.3 debt service requirements for $755.0 million in new GO 2010–11 Bond issues in the Water Infrastructure Fund to implement the State Water Plan. BIENNIAL 251.8% NA NA 100.0% 351.8% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 163 164 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUSINESS AND ECONOMIC DEVELOPMENT 2010–11 BIENNIAL RECOMMENDATIONS

All Funds recommendations for Business For General Revenue Funds and Selected performance measures for and Economic Development total $20.7 General Revenue–Dedicated Funds, the agencies in the Business and Economic billion for the 2010–11 biennium, which recommendations total $895.7 million, Development function are depicted in is a decrease of $848.9 million, or 3.9 which is a decrease of $176.3 million, or Table 40. percent, from the 2008–09 biennium 16.4 percent from the 2008–09 biennium (Table 38). (Table 39). TABLE 38 ALL FUNDS: BUSINESS AND ECONOMIC DEVELOPMENT IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE Department of Housing and Community Affairs $751.2 $318.1 ($433.1) (57.7%) Texas Lottery Commission 418.8 393.9 (24.9) (5.9) Ofﬁ ce of Rural Community Affairs 221.4 172.0 (49.4) (22.3) Department of Transportation 17,452.4 17,105.9 (346.5) (2.0) Texas Workforce Commission 2,124.2 2,080.7 (43.5) (2.0) Reimbursements to the Unemployment Compensation 30.3 33.9 3.6 11.8 Beneﬁ t Account Subtotal, Business and Economic Development $20,998.4 $20,104.6 ($893.7) (4.3%)

Retirement and Group Insurance $433.4 $490.2 $56.8 13.1% Social Security and Beneﬁ t Replacement Pay 132.9 135.2 2.4 1.8 Subtotal, Employee Beneﬁ ts $566.3 $625.5 $59.2 10.4%

Bond Debt Service Payments $39.9 $21.4 ($18.5) (46.4%) Lease Payments 1.6 2.3 0.7 42.1 Subtotal, Debt Service $41.5 $23.6 ($17.8) (43.0%)

Less Interagency Contracts $95.9 $92.3 ($3.6) (3.7%)

Total Article VII – Business and Economic Development $21,510.3 $20,661.4 ($848.9) (3.9%)

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 165 BUSINESS AND ECONOMIC DEVELOPMENT 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 39 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: BUSINESS AND ECONOMIC DEVELOPMENT IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Department of Housing and Community Affairs $14.7 $19.8 $5.0 34.1% Texas Lottery Commission 418.8 393.9 (24.9) (5.9) Ofﬁ ce of Rural Community Affairs 17.0 14.9 (2.1) (12.2) Department of Transportation 312.2 156.1 (156.1) (50.0) Texas Workforce Commission 239.0 255.3 16.3 6.8 Reimbursements to the Unemployment Compensation 8.7 9.8 1.0 11.8 Beneﬁ t Account Subtotal, Business and Economic Development $1,010.5 $849.8 ($160.7) (15.9%)

Retirement and Group Insurance $14.8 $16.9 $2.1 14.2% Social Security and Beneﬁ t Replacement Pay 5.3 5.4 0.1 2.1 Subtotal, Employee Beneﬁ ts $20.1 $22.3 $2.2 11.0%

Bond Debt Service Payments $39.9 $21.4 ($18.5) (46.4%) Lease Payments 1.6 2.3 0.7 42.1 Subtotal, Debt Service $41.5 $23.6 ($17.8) (43.0%)

Total Article VII – Business and Economic Development $1,072.1 $895.7 ($176.3) (16.4%)

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

166 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 40 SELECTED PERFORMANCE MEASURES: BUSINESS AND ECONOMIC DEVELOPMENT ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS Percentage of Households/Individuals of Very Low, 0.70% 0.76% 0.74% 0.74% Low, and Moderate Income Needing Affordable Housing That Subsequently Receive Housing or Housing-related Assistance

TEXAS LOTTERY COMMISSION Number of Retail Business Locations Licensed 16,431 16,500 16,500 16,500

OFFICE OF RURAL COMMUNITY AFFAIRS Percentage of Small Communities’ Population Beneﬁ ting 39.6% 36.0% 39.0% 39.0% from Public Facility, Economic Development, Housing Assistance, and Planning Projects

Number of New Community/Economic Development 356 266 300 300 Contracts Awarded

DEPARTMENT OF TRANSPORTATION Percentage of Construction Projects Completed on 98.8% 99.9% 97.0% 97.0% Budget

Percentage of Construction Projects Completed on Time 69.5% 85.0% 74.0% 75.0%

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 167 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 40 SELECTED PERFORMANCE MEASURES: BUSINESS AND ECONOMIC DEVELOPMENT (CONTINUED) ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

TEXAS WORKFORCE COMMISSION Entered Employment Rate 80% 79% 79% 79%

Temporary Assistance for Needy Families (TANF) 38% 30% 30% 30% Choices Participation Rate: Single-Parent Families

Average Number of Children Served Per Day, 107,044 106,296 106,319 106,320 Transitional and At-Risk Services

Skills Development Customers Served 20,289 19,786 19,791 19,805

168 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 41 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: BUSINESS AND ECONOMIC DEVELOPMENT IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS AGENCY ISSUES TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS Disaster Related Federal Funds Decreased Federal Funds by $448.2 million for disaster EST/BUD $0.0 $0.0 $448.2 $0.0 $448.2 relief money related to Hurricanes Katrina and Rita no 2008–09 longer anticipated to be available. REC $0.0 $0.0 $0.0 $0.0 $0.0 2010–11 BIENNIAL NA NA (100.0%) NA (100.0%) CHANGE

Non-Disaster Related Federal Funds Increased standard Federal Funds by $7.9 million for EST/BUD $0.0 $0.0 $257.4 $0.0 $257.4 expected increases in federal disbursements, including the 2008–09 Low-Income Home Energy Assistance Program and the REC $0.0 $0.0 $265.3 $0.0 $265.3 HOME Investment Partnership Program. 2010–11 BIENNIAL NA NA 3.1% NA 3.1% CHANGE

Increased Appropriated Receipts Increased Appropriated Receipts funding from fee EST/BUD $0.0 $0.0 $0.0 $30.8 $30.8 generated revenue by $2.1 million, to provide funding for 2008–09 the First-Time Homebuyer program, Colonia Field Ofﬁ ces REC $0.0 $0.0 $0.0 $32.9 $32.9 and Self-Help Centers, Manufactured Housing operations 2010–11 and agency administration. BIENNIAL NA NA NA 6.8% 6.8% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 169 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 41 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: BUSINESS AND ECONOMIC DEVELOPMENT (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS Housing Trust Fund Increased General Revenue funding by $5.0 million to EST/BUD $11.3 $0.0 $0.0 $0.0 $11.3 expand the Texas Bootstrap Loan Program and funding 2008–09 programs for veterans and persons with disabilities, rural REC $16.3 $0.0 $0.0 $0.0 $16.3 rental housing, homeownership activities and activities to 2010–11 enhance the ability of nonproﬁ ts offer affordable housing options. BIENNIAL 44.2% NA NA NA 44.2% CHANGE

TEXAS LOTTERY COMMISSION Lottery Operator Contract Decreased General Revenue–Dedicated Lottery Account EST/BUD $0.0 $214.3 $0.0 $0.0 $214.3 No. 5025 funding by $23.6 million for the Lottery Operator 2008–09 Contract due to an anticipated decline in lottery ticket sales. REC $0.0 $190.7 $0.0 $0.0 $190.7 2010–11 BIENNIAL NA (11.0%) NA NA (11.0%) CHANGE

Mass Media Advertising Contract Decreased General Revenue–Dedicated Lottery Account EST/BUD $0.0 $61.0 $0.0 $0.0 $61.0 No. 5025 funding by $1.0 million for the Mass Media 2008–09 Advertising Contract due to agency estimates that prize REC $0.0 $60.0 $0.0 $0.0 $60.0 payouts will equal 62 percent of gross ticket revenue in 2010–11 both ﬁ scal years. BIENNIAL NA (1.6%) NA NA (1.6%) CHANGE

170 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 41 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: BUSINESS AND ECONOMIC DEVELOPMENT (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS OFFICE OF RURAL COMMUNITY AFFAIRS Rural Technology Centers Decreased General Revenue funding by $5.0 million for EST/BUD $5.0 $0.0 $0.0 $0.0 $5.0 one-time expenditures to establish rural technology centers 2008–09 in Starr and Zapata counties. REC $0.0 $0.0 $0.0 $0.0 $0.0 2010–11 BIENNIAL (100.0%) NA NA NA (100.0%) CHANGE

Disaster Related Federal Funds Decreased Federal Funds by $37.0 million for disaster EST/BUD $0.0 $0.0 $37.0 $0.0 $37.0 relief money related to Hurricanes Katrina and Rita no 2008–09 longer anticipated to be available. REC $0.0 $0.0 $0.0 $0.0 $0.0 2010–11 BIENNIAL NA NA (100.0%) NA (100.0%) CHANGE

Non-Disaster Related Federal Funds Decreased Federal Funds by $8.2 million, including $2.6 EST/BUD $0.0 $0.0 $161.1 $0.0 $161.1 million in Community Development Block Grant funds and 2008–09 $5.6 million in other federal disbursement carryforwards, REC $0.0 $0.0 $152.9 $0.0 $152.9 which are not anticipated to be available and are not 2010–11 associated with disaster relief. BIENNIAL NA NA (5.1%) NA (5.1%) CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 171 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Health Care Access Programs Decreased Federal Funds by $1.8 million for the State EST/BUD $0.0 $0.0 $5.3 $0.0 $5.3 Rural Hospital Program due to an estimated reduction in 2008–09 the state’s federal apportionment for this program. REC $0.0 $0.0 $3.5 $0.0 $3.5 2010–11 BIENNIAL NA NA (34.0%) NA (34.0%) CHANGE

Rural Fire Department Assistance Program Increased General Revenue funding by $0.1 million EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 for 1 FTE for the Rural Fire Department Assistance 2008–09 program which assists with the recruitment and retention REC $0.1 $0.0 $0.0 $0.0 $0.1 of volunteer fi re fi ghters and implements a master fi re 2010–11 protection program. BIENNIAL NA NA NA NA NA CHANGE

Water Desalination with Renewable Energy Program Increased General Revenue funding by $3 million to EST/BUD $0.0 $0.0 $0.5 $0.0 $0.5 fund renewable energy and wind/power/groundwater 2008–09 desalination projects in rural communities. REC $3.0 $0.0 ($0.5) $0.0 $2.5 2010–11 BIENNIAL NA NA (100.0%) NA 400.0% CHANGE

172 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

DEPARTMENT OF TRANSPORTATION Transportation Planning, Design, and Management Decreased All Funds by $622.9 million for transportation EST/BUD $0.0 $0.0 $614.8 $1,112.6 $1,727.4 planning, design, and management, which includes 2008–09 decreases of $400.4 million in State Highway Fund Bond REC $0.0 $0.0 $638.0 $466.5 $1,104.5 Proceeds, $202.1 million in Texas Mobility Funds, $22.2 2010–11 million in State Highway Fund Toll Revenues, and $21.4 million in State Highway Funds; and an increase of $23.2 BIENNIAL 0.0% 0.0% 3.8% (58.1%) (36.1%) million in Federal Funds. CHANGE

Right of Way Acquisition Decreased All Funds by $894.3 million for acquiring right of EST/BUD $0.0 $0.0 $138.2 $1,258.1 $1,396.3 way, which includes decreases of $419.2 million in Texas 2008–09 Mobility Funds, $309.5 million in State Highway Fund REC $0.0 $0.0 $147.2 $354.8 $502.0 Bond Proceeds, $156.6 million in State Highway Fund Toll 2010–11 Revenues, and $17.9 million in State Highway Funds; and an increase of $8.9 million in Federal Funds. BIENNIAL 0.0% 0.0% 6.5% (71.8%) (64.0%) CHANGE

Transportation Construction Increased All Funds by $1,490.4 million for transportation EST/BUD $0.0 $0.0 $1,721.4 $3,400.8 $5,122.2 construction, which includes increases of $2,000.0 2008–09 million in Proposition 12 (2007) General Obligation Bond REC $0.0 $0.0 $2,282.9 $4,329.7 $6,612.6 Proceeds, $223.3 million in State Highway Funds, $139.6 2010–11 million in State Highway Fund Toll Revenues, $561.5 million in Federal Funds, $16.7 million in General Obligation BIENNIAL 0.0% 0.0% 32.6% 27.3% 29.1% Bond Proceeds, and $1.0 million in State Highway Fund CHANGE Concession Fees; and decreases of $1,196.2 million in Texas Mobility Fund Bond Proceeds, $255.6 million in State Highway Fund Bond Proceeds.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 173 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Aviation Grants and Services Increased All Funds by $14.1 million for general aviation EST/BUD $0.0 $0.0 $94.1 $69.3 $163.4 grants and state ﬂ ight services and maintenance 2008–09 operations, which includes increases of $23.4 million in REC $0.0 $0.0 $84.0 $93.6 $177.6 State Highway Funds and $0.9 million in Interagency 2010–11 Contracts and a decrease of $10.2 million in Federal Funds. BIENNIAL 0.0% 0.0% (10.7%) 35.1% 8.7% CHANGE

Transportation System Maintenance and Preservation Decreased All Funds by $794.8 million for maintaining EST/BUD $2.3 $1.3 $3,551.7 $3,100.8 $6,656.1 and operating the transportation system, which includes 2008–09 decreases of $1,284.6 million in Federal Funds, $76.8 REC $2.3 $1.3 $2,267.1 $3,590.6 $5,861.3 million in State Highway Fund Bond Proceeds, and $8.0 2010–11 million in State Highway Fund Concession Fees; and increases of $488.6 million in State Highway Funds and BIENNIAL 0.0% 0.0% (36.2%) 15.8% (11.9%) $85.9 million in State Highway Fund Toll Revenues. CHANGE

Public Transportation Increased All Funds by $3.0 million to support and promote EST/BUD $0.0 $0.0 $114.3 $61.3 $175.6 public transportation, which includes an increase of $3.7 2008–09 million in anticipated Federal Funds and a decrease of $0.7 REC $0.0 $0.0 $118.0 $60.6 $178.6 million in State Highway Funds. 2010–11 BIENNIAL 0.0% 0.0% 3.2% (1.1%) 1.7% CHANGE

174 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Vehicle Registration and Titling Increased State Highway Funds by $94.3 million for EST/BUD $0.0 $0.0 $0.0 $177.6 $177.6 enhancements to the agency’s vehicle registration titling 2008–09 system, the marketing of specialty license plates, and other REC $0.0 $0.0 $0.0 $271.9 $271.9 personnel and operating expenses. 2010–11 BIENNIAL 0.0% 0.0% 0.0% 53.1% 53.1% CHANGE

Trafﬁ c Safety Increased All Funds by $2.1 million for operating the EST/BUD $1.5 $0.0 $78.4 $14.8 $94.7 statewide trafﬁ c safety program, which includes an increase 2008–09 of $2.6 million in State Highway Funds and a decrease of REC $1.5 $0.0 $77.9 $17.4 $96.8 $0.5 million in Federal Funds. 2010–11 BIENNIAL 0.0% 0.0% (0.6%) 17.6% 2.2% CHANGE

Automobile Theft Prevention Increased All Funds by $0.4 million for automobile burglary EST/BUD $2.6 $0.0 $0.0 $27.4 $30.0 and theft prevention grants and administrative costs, which 2008–09 includes decreases of $24.4 million in State Highway Funds REC $30.4 $0.0 $0.0 $0.0 $30.4 and $3.0 million in Appropriated Receipts offset by an 2010–11 increase of $27.8 million in General Revenue Funds. BIENNIAL 1,069.2% 0.0% 0.0% (100.0%) 1.3% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 175 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Indirect Administration Increased State Highway Funds by $88.2 million for central EST/BUD $0.0 $0.0 $0.0 $380.4 $380.4 administration, information resources support, and regional 2008–09 support services for deferred facilities maintenance costs, REC $0.0 $0.0 $0.0 $468.1 $468.1 information technology replacements and upgrades, and to 2010–11 annualize staff salaries at the ﬁ scal year 2009 level. BIENNIAL 0.0% 0.0% 0.0% 23.2% 23.2% CHANGE

Bond Debt Service Payments Increased All Funds by $271.0 million for bond debt service EST/BUD $300.0 $0.0 $0.0 $1,067.4 $1,367.4 payments, which includes increases of $274.6 million in 2008–09 State Highway Funds and $180.7 in Texas Mobility Funds REC $115.7 $0.0 $0.0 $1,522.7 $1,638.4 offset by a decrease of 184.3 million in General Revenue 2010–11 Funds. BIENNIAL (61.4%) 0.0% 0.0% 42.7% 19.8% CHANGE

TEXAS WORKFORCE COMMISSION Workforce Client Transportation Services Increased General Revenue MOE for Temporary EST/BUD $0.0 $0.0 $0.0 $13.7 $13.7 Assistance for Needy Families by $13.7 million which 2008–09 reﬂ ects a method of ﬁ nance swap in 2010–11 of State REC $13.7 $0.0 $0.0 $0.0 $13.7 Highway Fund No. 006 - Workforce Client Transportation 2010–11 Services for General Revenue Funding. BIENNIAL NA NA NA (100.0%) 0.0% CHANGE

176 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Workforce Investment Act (WIA) Funds Decreased WIA Funds for Adult/Dislocated Workers EST/BUD $0.0 $0.0 $442.9 $0.0 $442.9 and Youth by approximately $63.3 million due to a lower 2008–09 allotment of WIA Federal Funds to Texas beginning in ﬁ scal REC $0.0 $0.0 $379.6 $0.0 $379.6 year 2009. 2010–11 BIENNIAL NA NA (14.3%) NA (14.3%) CHANGE

Child Care and Development Block Grant (CCDF) Increased CCDF funding by $23.8 million and increased EST/BUD $0.0 $0.0 $799.9 $0.0 $799.9 Child Care Mandatory and Matching Funds by 2008–09 approximately $10.0 million due to an anticipated growth in REC $0.0 $0.0 $833.7 $0.0 $833.7 these federal funding sources in ﬁ scal years 2010–11. 2010–11 BIENNIAL NA NA 4.2% NA 4.2% CHANGE

Temporary Assistance for Needy Families (TANF) Decreased TANF Federal Funds by $12.8 million due to EST/BUD $0.0 $0.0 $195.9 $0.0 $195.9 statewide initiatives in TANF Choices in fi scal years 2008–09 2008–09 that are not continued in fi scal years 2010–11 REC $0.0 $0.0 $183.1 $0.0 $183.1 biennium. This includes $2.6 million to provide stipends 2010–11 to exempt individuals to gain employment and achieve continued employment, and capacity-building for non- BIENNIAL NA NA (6.5%) NA (6.5%) profi ts. Also includes reductions for the Non-Custodial CHANGE Parent Initiatives and Foster Youth Expansion.

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 177 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Employment Services Decreased Federal Funds by $1.8 million due to the EST/BUD $0.0 $0.0 $87.0 $0.0 $87.0 Employment Services re-employment federal grant not 2008–09 being renewed after ﬁ scal year 2008 as well as reductions REC $0.0 $0.0 $85.2 $0.0 $85.2 in the Employment and Training Assessment grant and 2010–11 reductions in state level expenditures. BIENNIAL NA NA (2.1%) NA (2.1%) CHANGE

Project Reintegration of Offenders Increased General Revenue funding by $2.6 million. EST/BUD $18.9 $0.0 $0.0 $0.0 $18.9 Additional funding will allow the Texas Department of 2008–09 Criminal Justice/Windham School District to hire 42 REC $21.5 $0.0 $0.0 $0.0 $21.5 additional staff, which will allow for an additional 13,165 2010–11 offenders to be served. BIENNIAL 13.8% NA NA NA 13.8% CHANGE

178 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD REGULATORY 2010–11 BIENNIAL RECOMMENDATIONS

All Funds recommendations for Regulatory For General Revenue Funds and Selected performance measures for agencies total $931.9 million, which is an increase General Revenue–Dedicated Funds, the in the Regulatory function are depicted in of $164.6 million, or 21.5 percent, from recommendations total $913.9 million, Table 44. the 2008–09 biennium (Table 42). which is an increase of $166.9 million, or 22.3 percent, from the 2008–09 biennium (Table 43). TABLE 42 ALL FUNDS: REGULATORY IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE State Offi ce of Administrative Hearings $18.7 $21.1 $2.4 13.0% Department of Banking 29.9 47.5 17.6 58.9 Board of Chiropractic Examiners 0.9 1.3 0.3 35.7 Offi ce of Consumer Credit Commissioner 9.4 11.2 1.8 18.9 Credit Union Department 3.6 5.1 1.4 39.8 Texas State Board of Dental Examiners 3.8 4.9 1.2 30.8 Funeral Service Commission 1.3 1.5 0.2 12.0 Board of Professional Geoscientists 0.9 1.4 0.6 61.9 Health Professions Council 0.3 3.3 3.0 922.1 Offi ce of Injured Employee Counsel 14.7 15.5 0.9 5.9 Department of Insurance 201.1 205.8 4.8 2.4 Offi ce of Public Insurance Counsel 2.1 2.3 0.2 9.7 Board of Professional Land Surveying 0.8 0.9 0.1 11.7 Department of Licensing and Regulation 42.2 45.8 3.6 8.5 Texas Medical Board 19.0 22.5 3.5 18.5 Texas Board of Nursing 14.2 18.1 3.9 27.3 Optometry Board 0.9 1.0 0.1 15.9 Board of Pharmacy 8.4 11.1 2.8 32.9

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 179 REGULATORY 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 42 ALL FUNDS: REGULATORY (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Executive Council of Physical Therapy & Occupational $2.2 $2.3 $0.1 3.7% Therapy Examiners Board of Plumbing Examiners 3.8 4.7 0.9 23.1 Board of Podiatric Medical Examiners 0.5 0.5 0.0 1.9 Board of Examiners of Psychologists 1.6 1.9 0.3 16.9 Racing Commission 19.6 21.6 2.0 10.0 Real Estate Commission 13.2 16.8 3.5 26.6 Residential Construction Commission 19.2 18.0 (1.2) (6.2) Department of Savings and Mortgage Lending 9.5 13.7 4.2 43.8 Securities Board 11.7 17.0 5.2 44.8 Board of Tax Professional Examiners 0.4 0.4 0.0 9.6 Public Utility Commission of Texas 212.5 317.1 104.6 49.2 Ofﬁ ce of Public Utility Counsel 3.5 3.5 0.0 0.6 Board of Veterinary Medical Examiners 1.7 2.0 0.3 19.6 Subtotal, Regulatory $671.7 $840.0 $168.2 25.0%

Retirement and Group Insurance $64.6 $71.9 $7.3 11.3% Social Security and Beneﬁ t Replacement Pay 27.1 27.7 0.6 2.1 Subtotal, Employee Beneﬁ ts $91.7 $99.6 $7.9 8.6%

Lease Payments $9.7 $3.8 ($5.9) (60.5%) Subtotal, Debt Service $9.7 $3.8 ($5.9) (60.5%)

Less Interagency Contracts $5.9 $11.5 $5.6 95.4%

Total Article VIII – Regulatory $767.3 $931.9 $164.6 21.5%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

180 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD REGULATORY 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 43 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: REGULATORY IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

State Offi ce of Administrative Hearings $6.8 $7.0 $0.2 2.7% Department of Banking 29.9 47.5 17.6 58.9 Board of Chiropractic Examiners 0.9 1.2 0.3 38.2 Offi ce of Consumer Credit Commissioner 9.4 11.2 1.8 18.9 Credit Union Department 3.6 5.1 1.5 40.2 Texas State Board of Dental Examiners 3.6 4.8 1.2 33.2 Funeral Service Commission 1.2 1.4 0.2 13.1 Board of Professional Geoscientists 0.9 1.4 0.6 61.9 Health Professions Council 0.0 0.0 (0.0) (100.0) Offi ce of Injured Employee Counsel 14.7 15.5 0.9 5.9 Department of Insurance 192.9 199.8 6.9 3.6 Offi ce of Public Insurance Counsel 2.0 2.2 0.2 10.2 Board of Professional Land Surveying 0.8 0.9 0.1 11.7 Department of Licensing and Regulation 41.1 44.7 3.6 8.8 Texas Medical Board 18.8 22.4 3.6 19.0 Texas Board of Nursing 12.6 16.0 3.4 27.1 Optometry Board 0.8 0.9 0.1 17.9 Board of Pharmacy 8.4 11.1 2.8 33.0 Executive Council of Physical Therapy & Occupational 2.0 2.1 0.1 4.0 Therapy Examiners Board of Plumbing Examiners 3.7 4.6 0.9 23.9 Board of Podiatric Medical Examiners 0.5 0.5 0.0 3.3 Board of Examiners of Psychologists 1.4 1.7 0.3 18.8 Racing Commission 19.6 21.6 2.0 10.0

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 181 REGULATORY 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 43 GENERAL REVENUE AND GENERAL REVENUE–DEDICATED FUNDS: REGULATORY (CONTINUED) IN MILLIONS ESTIMATED/ BUDGETED RECOMMENDED BIENNIAL PERCENTAGE AGENCY 2008–09 2010–11 CHANGE CHANGE

Real Estate Commission $12.9 $16.4 $3.5 27.4% Residential Construction Commission 19.2 18.0 (1.2) (6.2) Department of Savings and Mortgage Lending 9.5 13.7 4.2 44.0 Securities Board 11.7 17.0 5.2 44.8 Board of Tax Professional Examiners 0.4 0.4 0.0 9.6 Public Utility Commission of Texas 211.4 316.2 104.8 49.6 Ofﬁ ce of Public Utility Counsel 3.5 3.5 0.0 0.6 Board of Veterinary Medical Examiners 1.7 2.0 0.3 19.6 Subtotal, Regulatory $646.0 $810.9 $165.0 25.5%

Retirement and Group Insurance $64.6 $71.9 $7.3 11.3% Social Security and Beneﬁ t Replacement Pay 26.7 27.3 0.6 2.1 Subtotal, Employee Beneﬁ ts $91.3 $99.1 $7.9 8.6%

Lease Payments $9.7 $3.8 ($5.9) (60.5%) Subtotal, Debt Service $9.7 $3.8 ($5.9) (60.5%)

Total Article VIII – Regulatory $747.0 $913.9 $166.9 22.3%

NOTE: Biennial change and percentage change are calculated on actual amounts before rounding. Therefore, table amounts may not add because of rounding.

182 SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 44 SELECTED PERFORMANCE MEASURES: REGULATORY ACTUAL BUDGETED RECOMMENDED RECOMMENDED MEASURE 2008 2009 2010 2011

ALL AGENCIES Total Number of Individuals Licensed 1,455,103 1,477,644 1,522,944 1,538,718

OFFICE OF INJURED EMPLOYEE COUNSEL Percentage of Scheduled Proceedings at the Division of 40% 41% 41% 41% Workers’ Compensation with Ombudsman Assistance

DEPARTMENT OF INSURANCE Number of Complaints Resolved 23,064 23,350 23,350 23,350 Number of Consultations and Inspections Provided to 2,813 3,360 3,058 3,058 Employers Average Number of Days to Resolve Indemnity Disputes 113 116 115 115 through Dispute Resolution Proceedings Percentage of Medical Fee Disputes Resolved by Agency 80.5% 80% 90% 90% Decision

PUBLIC UTILITY COMMISSION Percentage of Texas Cities Served by Three or More 83% 83% 82% 81% Certiﬁ ed Telecommunications Providers Average Annual Residential Telephone Bill in Texas as a 77.3% 72.4% 73% 73% Percentage of the National Average Average Annual Residential Electric Bill from Competitive 164.2% 154.1% 150% 148% Suppliers as a Percentage of the National Average Average Price of Electricity per kWh in Texas for 129.4% 124.4% 121% 119% Residential Customers from Competitive Suppliers as a Percentage of the National Residential Average Percentage of Eligible Low-Income Customers Provided 93% 93% 93% 93% a Discount for Electric Service

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 183 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 45 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: REGULATORY IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS AGENCY ISSUES STATE OFFICE OF ADMINISTRATIVE HEARINGS Increase in Workload Increased interagency contract funding by $2.0 million for EST/BUD $0.0 $0.0 $0.0 $5.1 $5.1 8 FTEs for new administrative law judge and 3 FTEs for 2008–09 administrative hearing support staff to handle the additional REC $0.0 $0.0 $0.0 $7.1 $7.1 workload estimated at 13,000 hours each year. 2010–11 BIENNIAL NA NA NA 33.3% 33.3% CHANGE

DEPARTMENT OF BANKING Regulatory Response Increased contingency funding for bank examinations EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $6.5 million in General Revenue Funds to maintain 2008–09 regulatory standards if signiﬁ cant changes in the industry REC $11.1 $0.0 $0.0 $0.0 $11.1 occur. This recommendation continues a legislative policy 2010–11 established in 1996. BIENNIAL NA NA NA NA NA CHANGE

Additional Bank Examiner Positions amd Salary Adjustments Increased General Revenue funding by $6.3 million for 14.0 EST/BUD $20.4 $0.0 $0.0 $0.0 $20.4 new senior bank examiner FTEs and for bank examiner 2008–09 retention and competitive salaries. REC $26.7 $0.0 $0.0 $0.0 $26.7 2010–11 BIENNIAL 30.9% NA NA NA 30.9% CHANGE

184 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

BOARD OF CHIROPRACTIC EXAMINERS Increase in Staff for Licensing and Enforcement Increased General Revenue Funding by $0.3 million for an EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 additional 2.5 FTEs in Licensing and Enforcement. 2008–09 REC $0.3 $0.0 $0.0 $0.0 $0.3 2010–11 BIENNIAL NA NA NA NA NA CHANGE

OFFICE OF CONSUMER CREDIT COMMISSIONER Regulatory Response Increased contingency funding for regulation of the Texas EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 motor vehicle sales ﬁ nance or payday lending industries 2008–09 by $1.0 million in General Revenue Funds to maintain REC $1.0 $0.0 $0.0 $0.0 $1.0 regulatory standards if signiﬁ cant changes in the industry 2010–11 occur. This recommendation continues a legislative policy established in 2006. BIENNIAL NA NA NA NA NA CHANGE

Financial Examiner Salary Adjustments Increased General Revenue funding by $0.7 million for EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 ﬁ nancial examiner retention and competitive salaries. 2008–09 REC $0.7 $0.0 $0.0 $0.0 $0.7 2010–11 BIENNIAL NA NA NA NA NA CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 185 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TABLE 45 SIGNIFICANT BUDGET ISSUES/RECOMMENDATIONS: REGULATORY (CONTINUED) IN MILLIONS GENERAL GENERAL REVENUE– REVENUE DEDICATED FEDERAL OTHER ALL BUDGET RECOMMENDATION AND DESCRIPTION FUNDS FUNDS FUNDS FUNDS FUNDS CREDIT UNION DEPARTMENT Regulatory Response Increased contingency funding for credit union EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 examinations by $0.8 in General Revenue Funds to 2008–09 maintain regulatory standards if signiﬁ cant changes in the REC $0.8 $0.0 $0.0 $0.0 $0.8 industry occur. This recommendation continues a legislative 2010–11 policy established in 1996. BIENNIAL NA NA NA NA NA CHANGE

Financial Examiner Salary Adjustments Increased General Revenue funding by $0.6 million for EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 ﬁ nancial examiner retention and competitive salaries. 2008–09 REC $0.6 $0.0 $0.0 $0.0 $0.6 2010–11 BIENNIAL NA NA NA NA NA CHANGE

BOARD OF DENTAL EXAMINERS Health Professions Council Shared Regulatory Database Migration Project Increased General Revenue funding by $0.7 million to EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 fund the Board of Dental Examiner’s portion of the Health 2008–09 Professions Council Shared Database Migration Project. REC $0.7 $0.0 $0.0 $0.0 $0.7 2010–11 BIENNIAL NA NA NA NA NA CHANGE

186 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Salary Increases and Adjustments Increased General Revenue funding by $0.3 million to EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 provide staff salary adjustments and merit raises across the 2008–09 licensing, enforcement and legal divisions of the agency. REC $0.3 $0.0 $0.0 $0.0 $0.3 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Additional FTEs in the Legal Department Increased General Revenue funding by $0.2 million for 2 EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 additional FTEs in the legal department to increase the rate 2008–09 of complaint resolution. REC $0.2 $0.0 $0.0 $0.0 $0.2 2010–11 BIENNIAL NA NA NA NA NA CHANGE

BOARD OF PROFESSIONAL GEOSCIENTISTS Licensing and Enforcement Increased General Revenue funding by $0.5 million for 4 EST/BUD $0.8 $0.0 $0.0 $0.0 $0.8 FTEs and operating costs in licensing and enforcement. 2008–09 This also includes ofﬁ ce relocation costs, computer REC $1.3 $0.0 $0.0 $0.0 $1.3 software updgrades, and the replacement of computers. 2010–11 BIENNIAL 62.5% NA NA NA 62.5% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 187 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

HEALTH PROFESSIONS COUNCIL Shared Regulatory Database Migration Project Increased Other Funds by $3.0 million in interagency EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 contracts for 3 new FTEs and to fund a database project 2008–09 to be used by six agencies. The six agencies include REC $0.0 $0.0 $0.0 $3.0 $3.0 the Board of Dental Examiners, the Board of Plumbing 2010–11 Examiners, the Board of Examiners of Psychologists, the Optometry Board, and the Board of Professional Land BIENNIAL NA NA NA NA NA Surveying. CHANGE

OFFICE OF INJURED EMPLOYEE COUNSEL Outreach Expenses Increased General Revenue–Dedicated Fund 36 funding EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $0.6 million to fund public service announcements and 2008–09 additional outreach expenses. REC $0.0 $0.6 $0.0 $0.0 $0.6 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Internal Auditor Increased General Revenue–Dedicated Fund 36 funding by EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 $0.1 million to fund 1 new FTE to be the agency’s internal 2008–09 auditor. REC $0.0 $0.1 $0.0 $0.0 $0.1 2010–11 BIENNIAL NA NA NA NA NA CHANGE

188 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TEXAS DEPARTMENT OF INSURANCE Annualize Salaries Increased General Revenue–Dedicated Fund 36 funding EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $0.9 million and General Revenue Account 8042 2008–09 - Insurance Maintenance Tax funding by $0.6 million to REC $0.6 $0.9 $0.0 $0.0 $1.5 annualize salaries at the 2009 level. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Open Records Processing Costs Decreased Other Funds by $2.3 million in Appropriated EST/BUD $0.0 $0.0 $0.0 $3.8 $3.8 Receipts due to a policy change in open records 2008–09 processing to more accurately capture the cost recovery REC $0.0 $0.0 $0.0 $1.5 $1.5 methods and a decrease in grant funding to the Division of 2010–11 Workers’ Compensation. BIENNIAL NA NA NA (60.5%) (60.5%) CHANGE

New Phone System One Time Expenditure Decreased General Revenue–Dedicated Fund 36 funding EST/BUD $0.0 $1.0 $0.0 $0.0 $1.0 by $1 million due to a one-time expenditure in 2008 2008–09 for a new phone system for the Division of Workers’ REC $0.0 $0.0 $0.0 $0.0 $0.0 Compensation. 2010–11 BIENNIAL NA (100.0%) NA NA (100.0%) CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 189 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Workers Compensation Medical Quality Review Increased General Revenue–Dedicated Fund 36 funding EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $0.9 million to fund 4 new FTEs to expand the agency’s 2008–09 functions for Workers’ Compensation Medical Quality REC $0.0 $0.9 $0.0 $0.0 $0.9 Review. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Education to Health Care Providers Increased General Revenue–Dedicated Fund 36 funding EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $1.0 million to fund 8 new FTEs to increase education to 2008–09 health care providers regarding disability management and REC $0.0 $1.0 $0.0 $0.0 $1.0 the return-to-work program. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Financial Examiners Increased General Revenue–Dedicated Fund 36 funding EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $0.8 million and General Revenue funding by $1.6 2008–09 million to fund 30 FTEs (additional ﬁ nancial examiners, REC $1.6 $0.8 $0.0 $0.0 $2.4 attorneys and investigators) to regulate the insurance 2010–11 industry. BIENNIAL NA NA NA NA NA CHANGE

190 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Data Center Services Contract Increased General Revenue–Dedicated Fund 36 funding EST/BUD $0.8 $5.3 $0.0 $0.0 $6.1 by $1.4 million and General Revenue by $0.9 million to 2008–09 fund increased expenses for the Data Center Services REC $1.7 $6.7 $0.0 $0.0 $8.4 contract. 2010–11 BIENNIAL 112.5% 26.4% NA NA 37.7% CHANGE

OFFICE OF PUBLIC INSURANCE COUNSEL Expert Witnesses Increased General Revenue funding by $0.2 million to EST/BUD $0.1 $0.0 $0.0 $0.0 $0.1 provide expert witnesses to testify in rate and rulemaking 2008–09 hearings. REC $0.3 $0.0 $0.0 $0.0 $0.3 2010–11 BIENNIAL 76.9% NA NA NA 76.9% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 191 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TEXAS DEPARTMENT OF LICENSING AND REGULATION Fully Integrating New Programs Increased General Revenue funding by $1.6 million to EST/BUD $7.4 $0.0 $0.0 $0.0 $7.4 fully fund operations and FTEs for four new programs 2008–09 incorporated into TDLR during the 2008–09 biennium. REC $9.0 $0.0 $0.0 $0.0 $9.0 These programs include the regulation of air conditioning 2010–11 and refrigeration contracting, the licensing and regulation of tow trucks, tow truck operators, and vehicle storage BIENNIAL 21.6% NA NA NA 21.6% facilities, the licensing and regulation of appliance installers CHANGE and appliance installation contractors, and the registration and regulation of certain discount health plans.

Additional FTEs and Operating costs for Conducting Inspections Increased General Revenue funding by $0.7 million for EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 6.0 additional FTEs, increased rent and travel costs, and 2008–09 operating costs in enforcement for conducting inspections. REC $0.7 $0.0 $0.0 $0.0 $0.7 2010–11 BIENNIAL NA NA NA NA NA CHANGE

192 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Increased Operating Costs for Investigations Increased General Revenue funding by $0.7 million for EST/BUD $1.9 $0.0 $0.0 $0.0 $1.9 additional ofﬁ ce space and for increased travel costs for 2008–09 enforcement divisions. REC $2.6 $0.0 $0.0 $0.0 $2.6 2010–11 BIENNIAL 36.8% NA NA NA 36.8% CHANGE

Increased Data Center Consolidation Services Cost Increased General Revenue funding by $0.3 million to fund EST/BUD $0.3 $0.0 $0.0 $0.0 $0.3 increased consumption costs for Data Center Consolidation 2008–09 Services. REC $0.6 $0.0 $0.0 $0.0 $0.6 2010–11 BIENNIAL 100.0% NA NA NA 100.0% CHANGE

TEXAS MEDICAL BOARD Funding for Enforcement Division Increased General Revenue funding by $2.3 million for EST/BUD $6.9 $5.2 $0.0 $0.0 $12.1 11.0 FTEs to provide additional support and address the 2008–09 increased workload in the enforcement division. REC $9.1 $5.3 $0.0 $0.0 $14.4 2010–11 BIENNIAL 31.9% 1.9% NA NA 19.0% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 193 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Agency Outreach Program and Public Education Increased General Revenue funding by $0.2 million and 2 EST/BUD $0.7 $0.0 $0.0 $0.0 $0.7 FTEs to develop an outreach program which will provide 2008–09 information to physicians related to the agency’s role, REC $0.9 $0.0 $0.0 $0.0 $0.9 changes to statutes and rules made by the Board. 2010–11 BIENNIAL 28.6% NA NA NA 28.6% CHANGE

Timekeeping System and Upgrades to Software and Hardware Increased General Revenue funding by $0.3 million and 1 EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 FTE to upgrade agency’s timekeeping system, computer 2008–09 software and add capabilities to data network hardware, REC $0.3 $0.0 $0.0 $0.0 $0.3 software and data network security and management 2010–11 components. BIENNIAL NA NA NA NA NA CHANGE

Salary Increases Increased General Revenue funding by $0.7 for salary EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 increases for staff. 2008–09 REC $0.7 $0.0 $0.0 $0.0 $0.7 2010–11 BIENNIAL NA NA NA NA NA CHANGE

194 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

BOARD OF NURSING Increase in Staff for Licensing and Enforcement Increased General Revenue funding by $1.2 million for an EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 additional 12.0 FTEs and operating costs in Licensing and 2008–09 Enforcement. REC $1.2 $0.0 $0.0 $0.0 $1.2 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Increase for Staff salary adjustments and merit raises Increased General Revenue funding by $0.4 million for EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 staff salary adjustments and merit raises in the licensing, 2008–09 accreditation, and adjudicate violation strategies. REC $0.4 $0.0 $0.0 $0.0 $0.4 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Peer Assistance Program Funding Increased General Revenue funding by $0.2 million to fully EST/BUD $1.2 $0.0 $0.0 $0.0 $1.2 fund the Peer Assistance Program and increase the cap on 2008–09 the number of RN and LVN participants. REC $1.4 $0.0 $0.0 $0.0 $1.4 2010–11 BIENNIAL 16.7% NA NA NA 16.7% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 195 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Interagency Contract with the Department of State Health Services Increased General Revenue funding by $0.7 million to EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 help fund the Center for Nursing Workforce Studies at 2008–09 the Department of State Health Services through an REC $0.7 $0.0 $0.0 $0.0 $0.7 interagency contract. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Increase funding for incorporating the regulation of Certifi ed Nurse Aides into the responsibilities of the Board of Nursing Increased General Revenue funding by $0.9 million and by EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 $0.5 million in interagency contracts from the Department 2008–09 of Aging and Disability Services for the regulation of REC $0.9 $0.0 $0.0 $0.5 $1.4 Certifi ed Nurse Aides, contingent on legislation transferring 2010–11 the regulation of Certifi ed Nurse Aides to the Board of Nursing BIENNIAL NA NA NA NA NA CHANGE

196 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TEXAS STATE BOARD OF PHARMACY Health Professions Council Shared Regulatory Database Migration Project Increased General Revenue funding by $1.0 million to fund EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 the Texas State Board of Pharmacy’s portion of the Health 2008–09 Professions Council Shared Database Migration Project. REC $1.0 $0.0 $0.0 $0.0 $1.0 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Salary Increases and Adjustments and Additional FTEs in Licensing and Enforcement Increased General Revenue funding by $1.5 million for EST/BUD $4.6 $0.0 $0.0 $0.0 $4.6 9 additional FTEs in the licensing and enforcement to 2008–09 address increases in licensee populations, and to provide REC $6.1 $0.0 $0.0 $0.0 $6.1 staff salary adjustments and merit raises in the licensing 2010–11 and enforcement divisions. BIENNIAL 32.6% NA NA NA 32.6% CHANGE

Increase funding for Compound Pharmaceutical testing Increased General Revenue funding by $0.1 million EST/BUD $0.1 $0.0 $0.0 $0.0 $0.1 to conduct an additional 100 tests on compounded 2008–09 pharmaceutical products. REC $0.2 $0.0 $0.0 $0.0 $0.2 2010–11 BIENNIAL 100.0% NA NA NA 100.0% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 197 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

BOARD OF PLUMBING EXAMINERS Health Professions Council Shared Regulatory Database Migration Project Increased General Revenue funding by $0.6 million to fund EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 the Board of Plumbing Examiners portion of the Health 2008–09 Professions Council Shared Database Migration Project. REC $0.6 $0.0 $0.0 $0.0 $0.6 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Additional FTEs Increased General Revenue funding by $0.2 million to fund EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 2 new FTEs for licensing and investigating plumbers. 2008–09 REC $0.2 $0.0 $0.0 $0.0 $0.2 2010–11 BIENNIAL NA NA NA NA NA CHANGE

198 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

BOARD OF EXAMINERS OF PSYCHOLOGISTS Health Professions Council Shared Regulatory Database Migration Increased General Revenue funding by $0.1 million to fund EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 the Board of Examiners of Psychologists portion of the 2008–09 Health Professions Council Shared Database Migration REC $0.1 $0.0 $0.0 $0.0 $0.1 Project. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

RACING COMMISSION New Horse Racetracks Increased General Revenue–Dedicated Account No. 597 EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $1.3 million for Contingency Appropriations to allow the 2008–09 agency to regulate any new horse racetrack that begins REC $0.0 $1.3 $0.0 $0.0 $1.3 operations during the biennium and to increase funding for 2010–11 the Texas Bred Program with revenue collected from the opening of each new horse racetrack. Newly generated BIENNIAL NA NA NA NA NA revenues would offset these appropriations. This continues CHANGE a legislative policy initially established in 1992.

Reopening of Greyhound Track Increased General Revenue–Dedicated Account No. 597 EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $0.6 million to fund necessary regulation functions of 2008–09 a greyhound track expected to reopen that was closed in REC $0.0 $0.6 $0.0 $0.0 $0.6 2008–09. The increase provided funding for 3.2 new FTEs. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 199 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

REAL ESTATE COMMISSION Criminal History Background Checks Increased General Revenue funding by $1.9 million to EST/BUD $0.3 $0.0 $0.0 $0.0 $0.3 perform federal criminal history background checks on 2008–09 applicants for original licensure and applicants for renewal REC $2.2 $0.0 $0.0 $0.0 $2.2 of broker and salesperson licenses, as required by House 2010–11 Bill 1530, Eightieth Legislature, Regular Session, 2007. BIENNIAL 633.3% NA NA NA 633.3% CHANGE

Salary Increases and Enforcement Support Increased General Revenue funding by $0.8 million EST/BUD $13.1 $0.0 $0.0 $0.0 $13.1 for salary increases for staff and to provide additional 2008–09 resources to the enforcement division. REC $13.9 $0.0 $0.0 $0.0 $13.9 2010–11 BIENNIAL 6.1% NA NA NA 6.1% CHANGE

Document Scanning and Security Testing for Information System Increased General Revenue funding by $0.4 million for EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 document scanning and security testing for the agency’s 2008–09 licening and enforcement databases. REC $0.4 $0.0 $0.0 $0.0 $0.4 2010–11 BIENNIAL NA NA NA NA NA CHANGE

200 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

TEXAS RESIDENTIAL CONSTRUCTION COMMISSION Reduced Program Costs Decreased General Revenue funding by $1.2 million EST/BUD $17.3 $0.0 $0.0 $0.0 $17.3 for reduced one-time registration, complaint resolution, 2008–09 compliance and administrative program costs. REC $16.1 $0.0 $0.0 $0.0 $16.1 2010–11 BIENNIAL (6.9%) NA NA NA (6.9%) CHANGE

DEPARTMENT OF SAVINGS AND MORTGAGE LENDING Regulatory Response Increased contingency funding for thrift examinations EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $1.6 million in General Revenue Funds to maintain 2008–09 regulatory standards if signiﬁ cant changes in the industry REC $1.6 $0.0 $0.0 $0.0 $1.6 occur. This recommendation continues legislative policy 2010–11 established in 2004. BIENNIAL NA NA NA NA NA CHANGE

Financial Examiner Salary Adjustments Increased General Revenue funding by $0.5 million for EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 ﬁ nancial examiner retention and competitive salaries. 2008–09 REC $0.5 $0.0 $0.0 $0.0 $0.5 2010–11 BIENNIAL NA NA NA NA NA CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 201 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

SECURITIES BOARD Regulatory Response Increased contingency funding for securities regulation EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 by $1.7 million in General Revenue Funds to maintain 2008–09 regulatory standards if signiﬁ cant changes in the industry REC $1.7 $0.0 $0.0 $0.0 $1.7 occur. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Financial Examiner Salary Adjustments Increased General Revenue funding by $2.8 million for EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 ﬁ nancial examiner retention and competitive salaries. 2008–09 REC $2.8 $0.0 $0.0 $0.0 $2.8 2010–11 BIENNIAL NA NA NA NA NA CHANGE

Inspection FTEs Increased General Revenue funding by $0.3 million for EST/BUD $0.0 $0.0 $0.0 $0.0 $0.0 4 new ﬁ nancial examiner FTEs to reduce dealer and 2008–09 investment advisor inspection cycles from ﬁ ve to three REC $0.3 $0.0 $0.0 $0.0 $0.3 years. 2010–11 BIENNIAL NA NA NA NA NA CHANGE

202 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Travel Increased General Revenue funding by $0.1 for inspection, EST/BUD $0.3 $0.0 $0.0 $0.0 $0.3 investigation, and legal travel. 2008–09 REC $0.4 $0.0 $0.0 $0.0 $0.4 2010–11 BIENNIAL 33.3% NA NA NA 33.3% CHANGE

PUBLIC UTILITY COMMISSION Low-Income Discount Program - Decrease Decreased General Revenue–Dedicated System Beneﬁ t EST/BUD $0.0 $184.2 $0.0 $0.0 $184.2 Account No. 5100 funding by $3.2 million to provide a 17 2008–09 percent Low-Income Discount to eligible electric customers. REC $0.0 $181.0 $0.0 $0.0 $181.0 2010–11 BIENNIAL NA (1.7%) NA NA (1.7%) CHANGE

Low-Income Discount Program - Increase Increased System Beneﬁ t Fund 5100 funding for the Low EST/BUD $0.0 $181.0 $0.0 $0.0 $181.0 Income Discount Program by $107.6 million to provide 2008–09 up to a 20 percent discount for eligible customers for 5 REC $0.0 $288.6 $0.0 $0.0 $288.6 months. 2010–11 BIENNIAL NA 59.4% NA NA 59.4% CHANGE

LEGISLATIVE BUDGET BOARD SUMMARY OF SENATE COMMITTEE SUBSTITUTE FOR SENATE BILL 1 203 BUDGET ISSUES AND RECOMMENDATIONS 2010–11 BIENNIAL RECOMMENDATIONS

Increase funding for Data Center Consolidation Services Costs Increased General Revenue funding by $0.2 million EST/BUD $0.7 $0.0 $0.0 $0.0 $0.7 for increased operating costs for the Data Center 2008–09 Consolidation Services. REC $0.9 $0.0 $0.0 $0.0 $0.9 2010–11 BIENNIAL 28.6% NA NA NA 28.6% CHANGE

204 SUMMARY OF SENATE COMMITEE SUBSTITUTE FOR SENATE BILL 1 LEGISLATIVE BUDGET BOARD