With three days remaining in the 84th
Legislative Session, the House and Senate both passed the Conference Committee
Report for House Bill 1 (state budget).
Leaving $6.4 billion unspent in General Revenue ($2.9 billion of this
amount is below the spending limit) and $11.1 billion unspent from the Rainy
Day Fund, the total state budget All Funds amount is $209.43 billion for the
2016-17 biennium, a 3.6% increase. The total
General Revenue amount is $106.68 billion (including tax relief), a 12%
increase. When excluding tax relief, the
biennium to biennium increase in General Revenue was $7.63 billion, or an 8%
The Foundation School Program was
increased by $1.5 billion. This includes
$1.2 billion for the Basic Allotment increase to $5,140 for both years of the biennium,
$55 million for an additional round of IFA (2017), and $47.5 million for the
New IFA program, and $200 million for fractional funding (contingent upon the
passage of HB 7). The non-FSP portion of
the TEA budget decreased by about $233 million (mostly due to the state no
longer funding the 1.5% TRS-Care contribution for school districts).
The state, using an estimated $5.5
billion offset in GR funding due to local property value growth and increased
recapture, was also able to fund approximately $2.7 billion in student
enrollment growth and an estimated $860 million for an increase to the Austin
yield--$61.86 to $74.28 (2016) and $77.53 (2017)--without any cost to the state.
The FSP also includes $2.6
billion for franchise tax relief (25% reduction) and $1.2 billion for the
increase in the state homestead exemption from $15,000 to $25,000. The homestead exemption statutory language is
in SB 1, which has come out of conference committee. The provision that would
allow the funding of the local optional homestead exemption has been stripped
from the final bill (an estimated $400 million cost), but the provision that
does not allow local entities to repeal or reduce the local exemption for five
years (December 2019) remains in place.