Texas Legislative Guide

Despite thousands of other bills filed, House Bill 1 and Senate Bill 2 probably drew the most attention this session. Through the two budget bills, the House and Senate crafted competing visions for what state government should look like over the next two years.

After the House and Senate approved their respective plans, House Speaker Joe Straus and Lt. Gov. Dan Patrick appointed members to a conference committee to work out the chambers' differences to get a single bill to Gov. Greg Abbott.

After the conference committee’s negotiations, Texas lawmakers in both chambers overwhelmingly approved a $209.4 billion two-year budget, a 3.6 percent increase over the current one. The budget leaves $6.4 billion unspent, including $2.9 billion under the state’s constitutional spending cap, according to the Legislative Budget Board. It includes property tax cuts favored by the Senate. It includes funding to keep the Texas Army National Guard on the border until the Department of Public Safety is considered fully staffed in the region, which the Senate had also sought.

The budget plan favored the House’s approach to shoring up the Employees Retirement System and boosting research funding for higher education institutions.

There was an extra $1.5 billion allotted to public education compared with the last budget — though Democrats said that figure should have been larger.

House Appropriations Chairman John Otto and Senate Finance Chairwoman Jane Nelson also worked to pass several smaller bills related to the budget this session. Most notably, lawmakers passed a supplemental budget bill, HB 2, to pay for unexpected costs and IOUs in the current budget.

Updated: May 31, 2015

Legislative scrutiny of state contracts with private companies increased this session, spurred by investigations of such agreements in agencies like the Health and Human Services Commission and the Department of Public Safety.

Texas lawmakers vowed this session to beef up oversight of billions in state contracts. And while several bills on the issue were filed, attention boiled down to a few measures. Lawmakers have labeled the legislation as a first step in a process that will continue in 2017.

Legislation passed first by the Senate and then the House would continue to require agencies to better evaluate how vendors perform and ban those with a history of poor ratings. It would also require agencies to shop around when making purchases of $50,000 or more through the Texas Department of Information Resources Cooperative Contracts program, a centralized list of approved state vendors that HHSC used to hire 21CT.  

The House passed legislation intended to create a contract management team at the Legislative Budget Board that would review contracts worth more than $10 million and those valued at less than $10 million that have “high-risk” factors such as those with agencies that have had recent contracting problems. The bill also empowered the team to recommend to the governor and comptroller that troubled contracts be canceled. While the legislation didn't get final passage, its author, state Rep. John Otto, managed to include most of the bill's contents in a provision of the approved budget.

Updated: June 1, 2015

The Texas Constitution says the government cannot grow faster than the state's economy. That sentiment has translated into a spending cap that is confusing and complicated, as it only covers a portion of state spending.

Lt. Gov. Dan Patrick backed proposals this session to expand the spending cap to cover the entire budget, while at the same time exempting two specific kinds of spending — tax relief and paying off debt — from the cap. Republicans also proposed changing the way the cap is calculated by basing it on the combined growth in population and inflation, which tends to be lower than the metric that the state uses now: the estimated growth in Texans’ personal income.

But the spending cap remains unchanged after this session. Legislation that passed through the Senate and the House would have tightened the rules guiding how much future state budgets can grow. But House members and senators couldn’t settle their differences over the legislation.

Legislators saw no need to break the cap, which requires a simple majority vote in the House and Senate. As a result, they passed a budget that left billions of dollars in revenue on the table.

Updated: June 1, 2015

Ahead of the 84th legislative session, state lawmakers — and Lt. Gov. Dan Patrick in particular — had expressed a strong interest in reducing property taxes this session. The Texas Constitution prohibits a statewide property tax and empowers local governments and schools and special districts to levy those taxes. Most property tax revenue goes to public schools.

While Senate members included property tax relief in their budget plan, the House opted for a plan that included sales tax cuts instead.

But House and Senate negotiators agreed on enacting property tax relief and sales tax cuts.  Legislators approved a bill increasing the homestead exemption from $15,000 to $25,000, a move that must have voter approval. The increased homestead exemption is part of a $3.8 billion tax cut deal that also included a reduction in the franchise tax rate paid by businesses. 

Updated: June 1, 2015

The tax has long drawn criticism from business groups and education groups. Among the concerns has been that the tax drew less than initially anticipated. Also, in some cases, businesses have had to pay the tax even in years when they didn’t make a profit.

Since its initial launch, the Legislature has made several revisions to the tax, including exemptions for some smaller businesses. Lawmakers were determined to cut the tax even further this session, and Gov. Greg Abbott had said he would veto a budget with no cut in the tax.

Both the House and the Senate made cuts to the franchise tax in their respective plans. Budget negotiators eventually reached an agreement that included an across-the-board 25 percent cut in the franchise tax rate paid by businesses. It will cost roughly $2.56 billion over the next two years and is part of an overall $3.8 billion tax cut package that includes an increase in the homestead exemption.

Updated: May 31, 2015

With the Texas Supreme Court hearing a lawsuit that more than 600 school districts have filed against the state, lawmakers were largely expected to bypass the topic of school finance as the 84th Legislature convened. But they did take up the issue, though legislation failed to pass.

The school finance case arose after lawmakers cut roughly $5.4 billion from state public education funding in 2011. A Travis County district judge ruled in the districts' favor in August, saying the way the state distributes money to districts is unconstitutional because of both inadequate and unequal funding. The state then appealed to the high court, which agreed to hear the case in January.

House Public Education Chairman Jimmie Don Aycock, R-Killeen, said during the session that House leaders no longer wanted to wait for a long-needed overhaul of the system and would actively try to pass reforms.

The state budget included an extra $1.5 billion for public education, but Aycock also tried to push legislation to simplify and bring more equity to school district funding across the state,

The plan, which included an extra $800 million for public education, didn’t make it to a House vote. Aycock said it had "become abundantly clear" that Senate leaders did not intend to move the bill even if the House approved it.

Updated: May 14, 2015