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Fiscal Size up 2020 LEGISLATIVELEGISLATIVE BBUDGETUDGET BBOARDOARD Fiscal Size-up 2020–21 Biennium SUBMITTED TO THE 86TH TEXAS LEGISLATURE PREPARED BY LEGISLATIVE BUDGET BOARD STAFF WWW.LBB.STATE.TX.US MAY 2020 Legislative Budget Board Fiscal Size-up 2020–21 Biennium SUBMITTED TO THE 86TH TEXAS LEGISLATURE PREPARED BY LEGISLATIVE BUDGET BOARD STAFF WWW.LBB.STATE.TX.US MAY 2020 LEGISLATIVE BUDGET BOARD DAN PATRICK, JOINT CHAIR Lieutenant Governor DENNIS BONNEN, JOINT CHAIR Representative District 25, Angleton Speaker of the House of Representatives KELLY HANCOCK Senatorial District 9, North Richland Hills JOAN HUFFMAN Senatorial District 17, Houston JANE NELSON Senatorial District 12, Flower Mound Chair, Senate Committee on Finance LARRY TAYLOR Senatorial District 11, Friendswood DUSTIN BURROWS Representative District 83, Lubbock Chair, House Committee on Ways and Means GIOVANNI CAPRIGLIONE Representative District 98, Southlake Chair, House Committee on Appropriations MARY E. GONZÁLEZ Representative District 75, El Paso OSCAR LONGORIA Representative District 35, Mission FISCAL SIZE-UP: 2020–21 BIENNIUM May 2020 Th is publication of Fiscal Size-up continues the tradition fi rst instituted in 1952 to report on the budget and other fi scal actions of each Legislature, and to provide contextual information about the structure, operation, and fi scal condition of Texas state government. While Fiscal Size-up serves to inform members of the Legislature, state entities, and Texas taxpayers with a comprehensive review of how tax dollars were directed by the Eighty-sixth Legislature, 2019, this publication was developed before the impacts of the COVID-19 virus and sharp decrease in oil prices slowed economic activity. Th ese events will have a profound eff ect on state and local budgets going forward. Th e fi rst three chapters of Fiscal Size-up summarize the overall fi scal condition of the state as it was when the Eighty-sixth Legislature deliberated the current budget. Th ese opening chapters provide a high-level overview of the 2020–21 biennial state budget, a description of the major revenue sources and funds, economic indicators for Texas and the U.S., and highlight legislation passed by the Eighty-sixth Legislature, 2019, that will have a signifi cant fi scal impact. Following this summary, the subsequent chapters of Fiscal Size-up focus in turn on each function of state government, providing comprehensive descriptions of programs and services within the state budget. We approach this discussion from the point of view of placing signifi cant budget issues within the context of programs, activities, and services of the agencies and institutions that support each function. We continue with this edition to include a stand-alone summary extracted from the broader publication that provides greater portability and access to key information. Furthermore, certain information also is available in an interactive format online at www.lbb.state.tx.us/interactive_graphics.aspx. Th is format enables quick extraction of detail by article, agency, and method of fi nance. Tabular and graphic reports are available, and the data are downloadable into spreadsheets in Microsoft Excel. Along with other Legislative Budget Board publications, the 2020–21 Fiscal Size-up is available on the Legislative Budget Board’s website at www.lbb.state.tx.us. Th e Legislative Budget Board is committed to producing work that is accurate, useful, and accessible. I am grateful for the work of the Legislative Budget Board staff and also to the many state offi cials and staff that provided the information necessary to compile this publication. Th e presentation of this information and its associated analysis is solely the responsibility of this offi ce. Jerry McGinty Director CONTENTS State Facilities .................................................. 15 Judicial Compensation Increase ...................... 16 1. STATE BUDGET OVERVIEW .............................1 State Employee Retirement, Health Benefi ts, Social Security, and Full-time-equivalent FUNDING BY ARTICLE ........................................ 2 Positions ........................................................ 16 Figure 1. Funding by Article, All Funds ...........................2 Figure 2. Funding by Article, All Funds ...........................2 Debt Service ..................................................... 17 Figure 3. Funding by Article, General Revenue Funds ................................................3 Economic Stabilization Fund ...........................17 Figure 4. Funding by Article, Strategic Fiscal Review ....................................17 General Revenue Funds ................................................3 Figure 5. Funding by Article, BIENNIAL COMPARISON BY FUND SOURCE ....19 General Revenue–Dedicated Funds ...........................4 Figure 15. Biennial Comparison by Source Figure 6. Funding by Article, of 2018–19 Expended/Budgeted Funds General Revenue–Dedicated Funds ...........................4 and 2020–21 Appropriated Funds .........................19 Figure 7. Funding by Article, General Revenue Funds and General Revenue–Dedicated Funds ..................5 APPROPRIATED, ESTIMATED, AND BUDGETED Figure 8. Funding by Article, General Revenue Funds FUNDS COMPARISON ...................................20 and General Revenue–Dedicated Funds ..................5 Figure 16. Reconciliation of Initial 2018–19 Biennial Figure 9. Funding by Article, Federal Funds .................6 Appropriations to 2018–19 Expended and Figure 10. Funding by Article, Federal Funds ...............6 Budgeted Amounts .......................................................20 Figure 11. Funding by Article, Other Funds ..................7 Figure 12. Funding by Article, Other Funds ..................7 APPROPRIATIONS FOR ITEMS Figure 13. Funding by Article, WITH 2020–21 BASELINE FUNDING General Revenue Funds, General Revenue–Dedicated EXCEPTIONS .................................................. 24 Funds, and Other Funds ................................................8 Figure 17. Programmatic Exceptions Figure 14. Funding by Article, to the Baseline Funding, General Revenue Funds General Revenue Funds, General Revenue–Dedicated and General Revenue–Dedicated Funds Only, Funds, and Other Funds ................................................8 2020–21 Biennium ......................................................24 HIGHLIGHTS OF THE STATE BUDGET .................. 9 FACTORS AFFECTING THE STATE BUDGET ....... 26 School Finance and Property Tax Reform ......... 9 Figure 18. Population-based Indicators, Fiscal Years 2008 to 2020 ........................................26 Medicaid ............................................................ 9 TRENDS IN STATE GOVERNMENT Transportation ................................................. 10 EXPENDITURES .............................................. 28 Disaster Recovery, Infrastructure Resiliency, Figure 19. Trends in State Government Expenditures, and Flood infrastructure ................................10 2020–21 Biennial Appropriations ...........................28 Figure 20. Biennial Population and Infl ation Growth Behavioral Health ............................................ 11 from the 2014–15 to 2020–21 Biennia .................29 Child Protective Services ................................. 11 RESTRICTED APPROPRIATIONS ........................30 School Safety ...................................................12 Figure 21. Restricted Appropriations from General Revenue Funds and General Revenue–Dedicated Higher Education Formula Funding .................12 Funds, 2020–21 Biennium ..........................................30 Teacher Retirement and Health Benefi ts ..........13 LIMITS ON APPROPRIATIONS .......................... 32 Figure 22. Remaining General Revenue Funds Spending Adult Incarceration ..........................................13 Authority, 2020–21 Biennium ....................................32 Human Traffi cking Prevention Article III, §49a, Pay-as-you-go Limit ..............32 and Law Enforcement ................................... 14 Figure 23. Components of the Pay-as-you-go Limit, Border Security ................................................ 14 2020–21 Biennium ......................................................33 Driver License Services ....................................14 Article VIII, §22, Limitation on the Growth of Certain Appropriations .............................32 Trusteed Programs Figure 24. Spending Limit Compared to the Summary within the Offi ce of the Governor .................15 of Appropriations, 2020–21 Biennium ....................33 LEGISLATIVE BUDGET BOARD STAFF – ID: 5944 FISCAL SIZE-UP 2020–21 BIENNIUM – MAY 2020 i CONTENTS Figure 25. General Revenue Funds Pursuant to the POPULATION .................................................... 40 Spending Limit Compared to the Summary of Figure 30. Resident Population Ranking, Appropriations, 2020–21 Biennium .........................33 Calendar Years 2008 and 2018 .............................42 Article III, §49-j, Debt Limit ..............................32 PERSONAL INCOME.......................................... 40 Article III, §51-a, Welfare Spending Limit ........33 Figure 31. 15 Most Populous States per Capita Personal Income, Calendar Year 2018 ...................42 2. REVENUE SOURCES AND ECONOMIC Figure 32. 15 Most Populous States Cost of Living INDICATORS ...........................................35 as Percentage of National Average, Calendar Year 2019, Second Quarter
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