May 22, 2013
Last night, the Texas Senate took a huge step toward ending the state’s reliance on diversions and deception in its budget.
The Senate accepted a proposal from Senator Kirk Watson to gradually reduce the hoarding and diversion of dedicated funds — money that’s collected from Texans to pay for utility bill relief, state parks, hospital and trauma care, clean air efforts, and other necessities, but that’s instead used to allow additional state spending.
“Ending this budget deception has been a priority of mine since I came into the legislature, and last night’s vote culminates five years of hard work,” Senator Watson said. “This state needs to find a long-range plan and path to ending the reliance on budget diversions. It’s time that the legislature keep its promises to Texans that we’ll spend their money as intended.”
The current budget relies on $4.95 billion worth of diversions. With last night’s amendment to House Bill 6, which was jointly offered with Senate Finance Chairman Tommy Williams, that total would drop to $1 billion — roughly the level of budget diversions in 1993 — in the 2022-23 budget.
“This amendment represents the first time that either chamber in the legislature has adopted such a path,” Senator Watson said. “It gives budget writers a glide path providing the flexibility they need to end this practice without jeopardizing the state’s finances, and it allows the legislature to adjust that path in the future as necessities demand. It’s a huge step at the right time.”
For more than 20 years, budget writers have used the increasing total of accumulated balances in dedicated funds – meant to pay for utility bill relief, state parks, hospital and trauma care, clean air efforts, and other necessities – to certify additional state spending.
Unappropriated balances in the funds have steadily grown over the years. Projected balances that were available to certify the 2012-13 budget totaled $4.95 billion.
What the amendment does:
This Watson-Williams amendment would put the state on a path to reducing its level of diversions by more than 83 percent from their current levels over the next four sessions. It would reduce the cap on the balances available for budget certification by $800 million a biennium – starting with the $4.2 billion called for in the 2014-15 budget; to $3.4 billion in 2016-17;$2.6 billion in 2018-19; $1.8 billion in 2020-21; down to $1 billion in the years beyond.
(Contingency language in the amendment, proposed by Senator Williams, would increase the diversions cap to $5 billion if Senate Joint Resolution 1 or the proposed System Benefit Fund rebate don’t pass. In that event, the amendment would decrease the cap on dedicated fund diversions from $5 billion to $1 billion, in $1 billion increments, between next year and 2022.)