The Honesty Agenda Moves Forward

April 29, 2011

Senator Kirk Watson’s Honesty Agenda today took another significant step toward increasing openness and honesty in state government and state finances, as the Texas Senate approved significant reforms in how taxpayers’ money is collected and spent.

The reforms are part of Senator Watson’s package of bills designed to make the state more transparent and accountable with its finances.  Several of these reforms were amended to a major bill (related to fiscal matters) carried by Senator Robert Duncan.  The provisions will:

• Require legislative budget writers to meet in public at least once a year outside the legislative session;
• Improve reporting on the collection and spending of fees;
• Require better public notification and input on budget reductions that are ordered when the legislature isn’t in session; and
• Have the state’s Cash Management Committee – comprised of the Governor, Lieutenant Governor, Speaker of the House, and Comptroller – meet at least once a year, and conduct a public hearing on the state’s economic condition and cash-flow situation, before setting certain debt levels.

(A fuller summary of the provisions of the amendment can be found below.)

“This vote will help open the books in Texas,” Senator Watson said.  “These measures will make a real difference helping taxpayers know how their money is being spent and what fiscal shape their state is in.”

In addition, Senator Watson added provisions onto other bills to help make sure that money is being collected and then spent transparently and responsibly.  An amendment to Senate Bill 1580 (by Senator Steve Ogden) will require legislative action in two years to maintain proposed health-related fee increases, giving the state time to make sure the money those fees collect is used for its intended purpose.

The Senate also approved a significant amendment by Senator Watson to a bill adjusting fees and funds related to the state’s court system (Senate Bill 1582, by Senator Ogden).  The amendment will require Texas to stop collecting a new fee on process servers once the state collects an amount in line with what budget writers plan to spend from that fee.  It also would create protections to ensure that a fund for judicial and court personnel training can be used only for its intended purpose.

“These provisions represent a significant step in the direction of ending one of the state’s worst budget-writing habits – collecting funds for one purpose and instead using them to balance the budget,” Senator Watson said.  “There’s still far more work to do, but I’m glad the Senate adopted my reforms to make the budget more open and accountable.”

Here is a fuller list of the Honesty Agenda provisions added to Senate Bill 1811:

1.  LEGISLATIVE BUDGET BOARD MEETINGS: 

There is no mechanism in state law requiring that the public and the legislature be given regular updates about the state’s finances, though such reporting is common at the federal level and in the private sector.  This amendment would have the Legislative Budget Board meet publicly at least once a year to receive updates about the state’s fiscal and budget condition.  It dovetails with a recently announced effort by Senator Watson and the Comptroller to provide more state fiscal information on the Comptroller’s website.

2.  FEE REPORTING:

There is no provision currently in law that specifically calls for reporting on fees charged by the state, how those fees change, and how the money they generate is used.  This amendment would have the Comptroller publish a report at the end of each state fiscal year on every fee the state charges.  The report would specify what the fees are supposed to pay for, whether and by how much fees were increased, the fund into which the fee revenue was deposited, and how much unappropriated fee revenue would be used to certify the budget.  The amendment also requires that for each state fee that is proposed to be increased in the budget, the budget must clearly state the statutory authority for the fee, the amount of the increase, the purpose for which the fee revenue would be used, and the fund into which the fee revenue would be deposited.

3.  INTERIM BUDGET REDUCTION HEARINGS:

Details are not clear under current law about the implementation process for interim budget reductions requested by state legislative officials, and there appear to be no formal mechanisms allowing public input on these kinds of interim reductions.  This amendment would create a legal definition for an interim budget reduction request, and would have state agencies provide detailed reports about their plans to reduce spending below levels authorized in the budget as a result of an interim request from the Governor, Lieutenant Governor, Speaker of the House, and/or legislators.  It also would have the LBB hold a hearing to seek input on those reduction plans before they are implemented.

4.  CASH MANAGEMENT COMMITTEE HEARINGS:

Currently, as infrequently as once every two years, the Cash Management Committee sets authorized levels of Tax and Revenue Anticipation Notes (TRAN) for each year of the biennium.  As a result, the debt levels set by the committee are not necessarily in line with the state’s fiscal and cash flow needs.  This amendment would have the committee hold a public hearing and solicit testimony on the state’s economic condition as well as the general revenue cash flow shortfall forecast that is prepared by the Comptroller.  And it would require that the committee conduct the hearing no more than three months before the Comptroller issues TRAN notes, ensuring that the authorization is more in line with the state’s fiscal condition at that time.