State budget highlights for the 2022-23 biennium

Wins and losses for Texas counties

By Zelma Smith

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Senate Bill 1, the two-year budget for the 2022-23 biennium, complies with all four constitutional spending limits, including the pay-as-you-go limit, which prohibits the General Revenue Fund budget from exceeding the comptroller’s estimate of available revenue, and the spending limit. The latter limit prohibits appropriations from state tax revenues not dedicated by the Texas Constitution from growing faster than the estimated rate of growth of the state’s economy. SB 1 is also below the other constitutional spending limits for debt spending and welfare spending.

From a county perspective, SB 1 includes the following highlights:

  • County courthouse preservation grants – $8.1 million in targeted grants to Mason ($6 million), Tyler ($1 million) and Newton ($1.1 million) counties in SB 1; $25 million in House Bill 2, the supplemental appropriations bill for the 2020-21 state budget.
  • $34 million for reimbursements to counties for retrofitting or purchasing new auditable voting machines and an increase of $1.4 million for training county election officials.
  • $15 million for a body-worn camera grant program for local law enforcement agencies.
  • Increases in psychiatric bed capacity provides relief to local mental/behavioral health authorities and county sheriffs housing people with mental health issues in their jails. 
  • An additional $30 million for the purchase of inpatient psychiatric beds in urban and rural communities.
  • An additional $86 million for new state hospital beds.
  • $276.5 million to complete replacement of campuses at the Austin and San Antonio state hospitals and $44.8 million to begin efforts to build new state hospitals in the Dallas area (see HB 2).
  • $123.5 million to provide rural hospitals with full-cost reimbursement for the outpatient services they provide Medicaid beneficiaries. According to the Texas Organization of Rural & Community Hospitals, the state leads the nation in rural hospital closures.
  • $95 million for indigent defense grants, which restores funding of the 5% reduction required by state leadership. Indigent defense is an underfunded mandate, and state grants cover only a small proportion of total costs (only 10% in fiscal year 2019).
  • $1 million in additional funds for the visiting judge program to reduce the backlog in court cases due to the COVID-19 pandemic. According to the executive administrator of the Office of Court Administration, it will take three years to eliminate the backlog. Other observers believe it will take longer.
  • $6 million to restore funding for the juvenile justice prevention and intervention grant program, which was eliminated due to the 5% reduction requirement.
  • $110 million to assist local governments with matching funds for federal disaster assistance.
  • $56.7 million for 100 additional border troopers, $8.9 million for vehicles and related equipment for new troopers and $29.1 million for additional border security equipment in HB 2.

County programs for which SB 1 does not restore funding to pre-COVID, 2020-21 appropriated amounts include:

  • Adult probation, for which counties, along with offender fees, share the cost with the state.
  • Continuing education for peace officers.
  • Payments to cities and counties to offset property tax losses due to ad valorem tax relief for disabled veterans.

Funding for continuing education grants for local law enforcement is down by $2.6 million, or 21.7%, from $12 million in HB 1, the 2020-21 appropriations bill, to $9.4 million in SB 1. Disabled veteran assistance payments to localities are down $1 million, from $20 million in HB 1 to $19 million in SB 1.

Finally, as happens in most sessions, the 87th Legislature adopted legislation imposing new and costly requirements on counties, without providing funding to implement these requirements. One example from the regular session is House Bill 1938, which allows law enforcement agencies that provide body-worn cameras for their peace officers to apply to the office of the governor for a grant to defray the cost of data storage for recordings created with the body-worn cameras. No additional funding was added to the budget for this purpose; instead, HB 1938 makes data storage grants an eligible use of the $15 million allocated for body-worn camera grants in SB 1. County sheriffs have indicated that prior funding levels for body-worn camera grants did not meet the demand and did not cover the ongoing cost of maintaining the cameras, which for many counties is cost-prohibitive.

For more details on items of importance to counties that are funded in the state budget for the 2022-23 biennium, go to TAC's State Budget webpage.

Due to reductions in General Revenue appropriations for the  two-year budget that ended Aug. 31, combined with surging revenue collections, Comptroller Glenn Hegar estimates a surplus of $5 billion at the end of fiscal year 2021. The reductions reflect the 5% cuts to state agencies' budgets required by state leadership in May 2020 and the replacement of eligible General Revenue appropriations by federal fiscal relief funds.
This estimate represents a remarkable turnabout from the $4.6 billion deficit Hegar projected in July 2020 for the end of fiscal year 2021. At the time, Hegar reduced his 2020-21 revenue estimate, citing the COVID-19 pandemic and volatile oil prices as the primary causes. See the chart above for estimates of the budget surplus (deficit) during the past two-year period.