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The Texas Budget Process
The budget is central to state government and a reflection of our priorities as a state. It determines how we will spend our money and which groups will benefit. The Texas budget process provides Texans with an opportunity to weigh in on Texas’ priorities and support people and programs that matter to our communities. In the coming months, Texas Impact will provide budget and policy updates, and will highlight opportunities to engage in this important process.
A Texas Budget Overview
The Texas Legislature adopts a biennial budget, which makes appropriations to state agencies for a two-year period. Introduced versions of the budget bill are filed when the legislature meets beginning in January of odd–numbered years and are deliberated during the 140–day regular session. However, almost a year prior to that time, state agencies, in cooperation with staff of the Legislative Budget Board (LBB) and the Governor’s Office, begin laying the foundation for the upcoming budget cycle.
Beginning in March of even-numbered years, agencies develop a strategic plan representing a five-year outlook on the agency’s strategies for meeting the needs of its constituents and agency functions. Next, agencies work with the LBB and the Governor’s staff to determine estimated spending levels for the current biennium, which for this cycle is a reconciliation of the original 2016–17 appropriations to the estimated and budgeted amounts for those respective years. This important step in the process is subsequently used to determine the baseline level of General Revenue and General Revenue–dedicated appropriations that agencies may request in their 2018–19 legislative appropriations requests (LARs).
Parameters for the requests are provided in a policy letter issued by the Governor, Lieutenant Governor and Speaker. For the 2018–19 biennium, state agencies are instructed to limit their General Revenue and General Revenue–dedicated baseline requests to amounts that reflect a four percent reduction to the 2016–17 estimated and budged amounts. The policy letter also outlines exceptions made for certain programs. Any amounts above the baseline may be requested as exceptional items.
Agencies submit their LARs based on instructions developed by the LBB and Governor’s Office throughout July and August. Over the next two months, staff of the Governor’s Office, LBB, and other legislative offices conduct joint budget hearings to allow agencies to present their budget requests and allow the public to comment on those requests. A schedule of the budget hearings can be accessed from the Governor’s Budget and Policy Offices website. Upcoming hearings are broadcast online and can be monitored on most browsers and mobile devices, and hearings are archived by hearing date.
During the fall, budget bills are developed that will be introduced as legislation by the House and Senate chambers. Initially, the bills are considered by the House and Senate budget oversight committees: House Appropriations and Senate Finance, respectively. The Governor also may submit a proposed budget during the legislative session, which generally reflects the Governor's policy issues and initiatives.
While the House and Senate committees are considering their bills, usually in late February through early April of odd-numbered years, the public has the opportunity to provide input on each agency’s budget and any proposed changes being considered by the Committees. In the first stage of consideration, the committees divide into smaller groups including subcommittees and workgroups to give intensive consideration to each article of the budget. The smaller groups provide detailed recommendations and analysis to the larger committees.
After the bills are amended and voted out of the Committees, they are referred to the House and Senate chambers for consideration and further amendment. The chambers adopt their respective versions of the budget bills and differences are reconciled by a Conference Committee during mid- to late May. The Conference Committee version of the budget bill is adopted by the House and Senate and is subject to line-item veto of appropriations by the Governor and certification by the Comptroller of Public Accounts to ensure that sufficient revenue is available to support the appropriations.