Report Details How Dedicated Funds Help Balance State Budget

October 24, 2013
By Paul K. Emerson, TAC State Financial Analyst
Legislative News

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As part of what has been a regular practice over the past two decades, General Revenue-Dedicated Funds were used to certify the state budget for the coming fiscal years, according to a report released by the Comptroller’s office.

The long awaited report, released on Oct. 19, shows that $4.170 billion was used to certify the General Appropriation Act (SB 1) for fiscal years 2014-15 which is $778.1 million less than what was used in fiscal years 2012-13. Over $4.9 billion was used for certification purposes during the 82th Legislative Session.

Leading up to the 83rd Regular Legislative Session, a lot of discussions centered on how the state would be able to reduce its dependence on funds that were intended for a particular purpose, but held from being appropriated – only to be used to certify the state budget.  Throughout the interim and during the regular session, it was mentioned repeatedly that it would take time to draw down these funds –probably years.   

Enacted during the regular session, HB 7 by Rep. Drew Darby (R-San Angelo), aims to reduce the state’s reliance on dedicated revenue for budget certification purposes. It requires the Legislative Budget Board to develop and implement tools to evaluate the use of available dedicated revenue for state government financing and budgeting and develop specific recommendations on actions the Legislature may take to reduce the state’s reliance on available dedicated revenue for the purposes of certifying the budget. The bill also addresses the reductions of some of the largest fund balances, including the System Benefit Fund (SBF). Usually this fund balance has well over $800 million at any given time. HB 7 reduces the SBF significantly and distributes a considerable amount of those funds to a low-income electric customer program, known as Lite-Up Texas. The remaining balance of $60.3 million was held for certification.

Still over two hundred dedicated revenue accounts were held for certification this last legislative session. Some of the more familiar accounts impacting counties are:

  • Designated Trauma Facility and EMS Account 5111: – $94.9 million was held for certification. These funds are used to fund designated trauma facilities, county and regional emergency medical services and trauma care systems.
  • 9-1-1 Services Fee Account 5050: – $177.8 million was held for certification. The oversight agency for these funds provides grants and assists local governments through Regional Planning Commissions as they develop and implement plans and maintenance for 9-1-1 services.
  • Law Enforcement Officer Standards and Education Account 0116: – $5.7 million was held for certification. These funds are used by local law enforcement officers for continuing education courses and training. 
  • Volunteer Fire Department Assistance Account 5064: – $80.9 million was held for certification. These funds are used to assist volunteer fire departments in paying for equipment and training personnel.
  • Fair Defense Account 5073: – Fortunately, all of the funds ($81.6 million) in this particular account were appropriated in SB 1 (state budget). None of the funds were used for certification purposes. These funds are used by the Texas Indigent Defense Commission to provide financial and technical support to counties to develop and maintain quality, cost-effective indigent defense systems.

Review the Comptroller’s report on the General Revenue Dedicated Accounts for the 83rd Legislature, 2013.

For more information on this article, please contact Paul Emerson, TAC State Financial Analyst, at (800) 456-5974.