Texas Senate passes budget stressing tax cuts, mental health, employee pay raises

AUSTIN — The Senate on Monday unanimously passed a two-year, $308 billion state budget that stresses property, tax cuts, mental health, the electric grid and pay raises for state employees and teachers.

While the senators would spend several billion more of state discretionary dollars than the House, they would still leave more than $17 billion on the table, said bill author Sen. Joan Huffman, R-Houston.

“We must craft a budget that is responsible and sustainable in future years, which requires leaving revenue in the Treasury to support new, ongoing expenses moving forward,” he said.

Once the House rejects the Senate’s changes, as is traditional, a 10-member conference committee will negotiate a final version of the budget. It will consist of five senators and five state representatives, chosen, respectively, by Lt. Gov. Dan Patrick and Speaker Dade Phelan.


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Lawmakers must pass the budget before the session ends May 29.

The Senate’s spending plan tracks the House’s in devoting $5 billion of new money into public schools, with a final decision on how that will be carried out still to be made. The Senate’s mentions education savings accounts to let parents choose private schools as one potential use; the House does not.

Both chambers’ budgets would spend $4.6 billion on Gov. Greg Abbott’s Operation Lone Star. In the current cycle, the state is expected to spend just under $4.4 billion on the border security effort.

Like the House, the Senate’s budget would grant state employees 5% pay raises in each of the coming two years, and provide retired teachers with their first cost of living adjustment in 19 years.

Mon. Brandon Creighton, R-Conroe, said that in addition, the 186,000 retired teachers who are 75 years old or older would get a “13th check” of $7,500.

For active teachers, Creighton said, the Senate’s plan could bring pay increases in small districts, including rural areas, of $6,000 a year.

“Every classroom teacher in Texas will see a $2,000 pay raise,” he said. “We are lifting up all teachers and creating parity for regions of the country that have long paid less.”

On mental health, Austin Democratic Sen. Sarah Eckhardt said the Senate plan makes a “stellar” investment of new funds.

On tax relief, the Senate would add $9.7 billion of school property tax cuts to those passed in 2019, which would cost $5.3 billion to continue for another two years.

Senators also would wheel out another $1.5 billion in business tax reductions. The House would continue the 2019 school-tax rate cuts, then pack $12 billion into further rate decreases.

The Senate’s other major differences with the House’s budget include a plan to use $10 billion of the unspent but available revenue on paying private interests to build 10 gigawatts’ worth of natural gas-fired electricity generators. They would serve as a reserve source of power if the grid — which came within minutes of total failure in February 2021 — encounters a problem.

Patrick has said the Texas Energy Insurance Program, as the plan is called, will finally fix the grid run by the Electric Reliability Council of Texas. The Abbott has said bills passed in 2021 and new rules crafted by his appointed regulators would assure no further problems.

The House, while mostly silent, didn’t include money for backup generators in its budget. The Senate state budget if senators’ bill to create the energy insurance program fails, the Public Utility Commission next year should get $100 million of available state discretionary funds to repair the grid and preserve capacity.

The Senate passed its version of the budget Monday in less than 90 minutes. Earlier this month, it took the House almost 10 hours — and that was fast, compared with some sessions.

The state is enjoying a record-breaking $32.7 billion revenue surplus in the current two-year cycle, and Comptroller Glenn Hegar has forecast further growth.

“This is a once-in-a-generation opportunity to address longstanding needs, pay down debts, make strategic investments in our state’s infrastructure and historic sites, and most importantly, give money back to the taxpayers,” Huffman said. She’s in her first session as head of the budget-writing Senate Finance Committee.

Patrick lavished her with praise, saying she stepped in where former Flower Mound GOP Sen. Jane Nelson, a veteran budget writer who last year didn’t run for reelection to the Senate, left off.

“You did an incredible job to pass a bill of 31 to nothing,” Patrick told Huffman. “Which means whoever’s on the furthest to the left or the furthest to the right came together to support this bill.”

Other differences between the House and Senate’s budgets:

Community care attendants’ pay

The Senate bill includes “a substantial wage increase for our community attendants” who help elderly and disabled Texans stay in their homes, said Sen. Lois Kolkhorst, a Brenham Republican who is the Senate’s chief health and social services budget writer.

More than 302,000 Texans receive help from attendants paid for by Medicaid community care programs. But Medicaid, a state-federal health insurance program for the poor in which the state sets providers pay, only funds a base wage of $8.11 an hour, with no benefits.

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Dennis Borel, who runs the Coalition for Texans with Disabilities, has led a push this session to boost the base wage next year to $15 an hour, and to $17 an hour in fiscal 2025. That would cost $2.6 billion in state general-purpose revenue , generating an extra $4 billion of Medicaid matching funds.

So far, the House has offered $715 million. The Senate approved spending $902 million, enough to take all attendants for $11 an hour.

“If we wait two years, and we’re trying to get $19 [an hour], and the base wage is still $8, that’s like trying to climb Mt. Everest,” Borel said Monday after the Senate’s vote.

Though disappointed, Borel said the Senate’s version would at least likely start the next session’s fight with a higher attendant wage locked into the Health and Human Services Commission’s initial budget request.

Budget negotiators can still do more for attendants, especially if Hegar, the state’s chief tax collector, updates his revenue estimate before May 29, Borel said. Hegar and previous comptrollers have been known to increase their forecasts late in legislative sessions.

Prison air conditioning

With new data showing that indoor temperatures at 15 state-run lockups exceeded 100 degrees last summer, prison guards, inmates’ families and criminal justice activists have demanded Texas use some of the surplus to install more air conditioning.

About 70% of state-run lockups don’t have air conditioning all across their inmate housing areas, and Texas is one of 13 states that does not require air conditioning inside its state-run jails and prisons.

The conditions have resulted in repeated litigation. The state is fighting 20 lawsuits related to extreme heat in prisons, according to a prison system spokesman.

The Senate’s budget would provide $129 million for major repairs and restoration, though none would specifically be allotted for air conditioning.

The House would give the Texas Department of Criminal Justice about $570 million. That would fund the first two of four phases and would add 62,000 air-conditioned beds in TDCJ prisons over the next eight years, the agency said.

Parks, higher education

The Senate would spend $500 million on acquisition of new land for state parks, assuming a separate bill is passed and voters pass a proposed constitutional amendment. The House has approved only $100 million, which is in the “supplemental” bill for the current cycle. (The Senate also has $100 million for land buys for parks in its version of the stopgap funding bill.)

In higher education, the Senate would spend $2.5 billion, not the $3.5 billion proposed by the House, on a new university endowment to help the University of North Texas system, as well as the Texas Tech, University of Houston and Texas State systems. That spending would also depend on passage of a separate bill and constitutional amendment.

Dallas Democratic Sen. Royce West unsuccessfully sought to strip from the budget bill a provision barring any use of state funds for diversity, equity and inclusion of “practices or similar programs, including personnel, training or activities” on state colleges and university campuses.

West said the prohibition could harm the ability of Texas’ health-related higher education institutions to attract research grants because many of them “required ‘DEI’ as it relates to inclusion.”

Huffman responded by saying the Senate today would take up separate legislation to ban DEI offices and programs at public universities. She said debate of the hot-button topic should occur on that legislation.

Huffman urged senators to table West’s amendment. Her motion passed, 19-12. With nine Democrats’ signatures on West’s amendment, all of them Democrats, the vote appeared to break at least mostly along party lines.

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