Savings Bills Threatened by Democrat Walkout

Lawmakers and public policy groups alike fear that the walkout of House Democrats will kill bills that generate additional state revenues needed to fund education, health care services, and other key state programs in the 2004-2005 budget.

In a May 14 press conference, Speaker Tom Craddick (R-Midland) projected that the House bills killed as a result of the Democratic walkout would have saved state and local governments approximately $700 million.

A large portion of that comes from five key revenue- and savings-generating bills that were on the May 12 and 13 House calendars. Those bills, and more than 200 others, died when the 51 absent Democrats did not return by midnight on May 15.

Among the jeopardized bills is HB 2, which the Legislative Budget Board (LBB) estimates would generate approximately $240.3 million in savings through August 2005.

That isn’t all. According to HB 2’s fiscal note, another $446.1 million can be expected during 2006-08, chiefly from:

• HB 2’s consolidation of agencies and services;

• Its implementation of some of the Comptroller’s e-Texas recommendations;

• The addition of new fee structures that benefit both the Foundation School Program and general revenue; and

• Its creation of a more efficient motor vehicle sales tax policy.

Bill author David Swinford (R-Amarillo) said HB 2’s far-reaching effects ultimately make it a “billion dollar bill.” Swinford is presently collaborating with Craddick and Lt. Gov. David Dewhurst to find Senate or House vehicles for HB 2’s key sections. He emphasized that the bill’s provisions were too significant to let pride of authorship prevent their being woven into other bills.

According to Dewhurst’s office, no specific bill is being looked at to replace all of HB 2’s provisions. However, it might be possible to integrate major HB 2 changes into bills with similar subject matter now pending in the Senate.

For example, Rep. Joe Pickett’s (D-El Paso) HB 3442 could be a vehicle for HB 2’s agency consolidation provisions. Pickett’s bill authorizes state agencies to recover or reduce expenditures by consolidating reports, entering into more cost efficient governmental/private contracts, adopting additional eligibility requirements for employee benefits, and collecting fees to offset costs incurred by an agency.

Rep. Leo Berman’s (R-Tyler) HB 3306, presently pending in the Senate Finance Committee, might function as another vehicle for HB 2 provisions. The bill authorizes statutory reductions in appropriations to certain state agencies. Rep. Arlene Wohlgemuth’s (R-Burleson) HB 2292, an omnibus restructuring plan for health and human services agencies, is also among possible vehicles for some HB 2 provisions. Other possibilities included HB 3305, HB 3441, HB 3443, HB 3459, or HB 3378.

Grass-roots conservative groups blasted the walkout and the way it jeopardized HB 2. Jim Cardle, of the Texas Citizens Action Network, and Peggy Venable, of Citizens for a Sound Economy, said the absentee lawmakers were delaying key legislation directly affecting funding for schools and human services. As long as legislators remain in Oklahoma, Venable noted, costs are running up and the clock is ticking on key legislation.

The second largest bill threatened by the Democratic walkout is Wohlgemuth’s HB 3519. That bill authorizes statutory changes needed to conform with health and human service appropriations levels in the 2004-05 budget. The bill generates revenue through a new quality assurance fee, and implements other spending reductions assumed in the budget, HB 1. The LBB estimates HB 3519 could generate as much as $228.1 million through August of 2005 and another $403 million through 2008.

Other bills threatened by the walkout are: Rep. Craig Eiland’s (D-Eiland) HB 3321, Rep. David Farabee’s (D-Wichita Falls) HB 1377, and Rep. Roberto Gutierrez’s (D-McAllen) HB 700.

Though the potential revenue generated by HB 3221 is not as large as HB 2 or HB 3519, the bill does have the potential of attracting federal dollars, and generating other state revenue. It authorizes the issuance of $57 million in bonds for the construction of a National Bio-Containment Laboratory at the University of Texas Medical Branch at Galveston (UTMB) to help the school secure its bid for a site selection grant.

If awarded to UTMB, the lab could bring approximately $110 million in additional federal monies for construction of the facility, which would become the only national laboratory based in Texas. Sources in the speaker’s office estimate the lab could generate between $45 million-$75 million annually.

Farabee’s HB 1377 imposes a fee of $5 for filing public documents in county clerk offices. The fee would help counties preserve, manage, and restore public records. Sources in the speaker’s office estimate the bill would generate approximately $20 million for counties statewide and potentially help offset reduced state appropriations resulting from the budget shortfall.

HB 700, the enabling arm of HJR 37, would increase the school property tax homestead exemption for the state’s elderly and disabled population from $10,000 to $20,000, just when budget shortfalls are endangering health and human services funding for the state’s frail and elderly.

Although the bill reduces property taxes collections by government, the LBB says a “dynamic feedback revenue affect” – presumably from increased sales tax collections – would translate to a $2.1 million gain in general revenue for the 2004-2005 biennium.

Rep. Garnet Coleman (D-Houston) issued statements on May 14, blaming House leaders for the walkout and arguing that their decision to prioritize a “divisive” redistricting bill kept the House from addressing crucial legislation.

“There is no reason,” Coleman said, “to believe that should HB 2 fail to pass the House floor by Friday the state would suffer the economic loss claimed by the Republican leadership. Such unfounded threats of budget cuts come from the bad math of political posturing instead of responsible policy making.”

The House will take up a local and consent calendar Friday, which includes local and consent bills from Monday and Tuesday’s local calendars. If the walkout persists past Friday, the cost to the state could significantly increase because some of the local and consent bills have fiscal impact, and additional Senate vehicles might be necessary to limit the overall effect of the walkout on the state budget.