Legislative Update September 2020

By Premier Legislative Consulting

Premier Legistlative Consulting logo

One of the highlights of the year for us is getting to see all of you during the TTA annual convention. Unfortunately, COVID-19 forced us to abbreviate our conference this year and robbed us of getting to see so many of you. But lucky for you (we hope) we wanted to reiterate all of the wisdom and crucial information from our presentation. And if you weren’t fortunate enough to see our presentation live, here is a brief summary of what we said.

Each legislative session is marked with uncertainty and unpredictability. But this year will be worse due to COVID-19. We don’t know if the public will be allowed in the capitol, how public hearings will be conducted, or how legislators will cast their floor votes. Looking at what other states have done and the little that has been said by legislators, tells us we can likely expect: limited capacity in both the capitol and hearing rooms, enforced social distancing, face masks, and perhaps even temperature checks. How these things will work and for how long is anyone’s guess.

Politically the House looks the most likely to see significant changes. Currently, there are 83 Republicans and 67 Democrats in the House. However, we will see at least 15 new members through retirements and primary defeats. Democrats are 9 seats short of taking control of Texas House. They are buoyed by having picked up 12 seats in the 2018 mid-term elections. Republicans are confident they can hold the House, but this looks to be one of the most competitive House elections in a decade. In addition, regardless of who holds the majority, we will have a new Speaker of the House with the retirement of current Speaker, Dennis Bonnen.

In comparison, the Senate will remain much as it is now. Republicans will very likely maintain their majority. However, they could lose the seat currently held by Sen. Flores (R-Pleasanton). Sen. Flores won his seat in a heavily Democratic district two years ago in a special election but is running in his first general election. There will be a minimum of three new Senators: Former Travis Co. Judge Sarah Eckhardt has replaced Sen. Kirk Watson (D-Austin), former Rep. Cesar Blanco is the favorite to replace retiring Sen. Jose Rodriguez (D-El Paso), and there will be a special election to replace Sen. Pat Fallon (R-Prosper), now that he has been selected to run for Congress to replace U.S. Rep. John Ratcliffe (appointed by Director of National Intelligence).

Of course, the Legislature is constitutionally required to pass a budget each regular session. Due to the COVID-19 economic contraction, there is a shortfall in the current budget of $4.58 billion. While that is bad, it is not as bad as the situation in the 2011 legislative session when the Legislature had a deficit of about $11 billion going into session. The current shortfall will almost certainly increase due to expected increases to Medicaid rolls.

The Rainy Day Fund will have a projected balance at the end of Fiscal year 2021 (August 31, 2021) of $8.79 billion. Subtracting the $4.58 billion current shortfall will leave at most about $4.21 billion in the Rainy Day Fund to cover any unanticipated costs for the 2022-2023 budget. While it is anticipated that there will be a shortfall for the 2022-2023 budget, no definitive figure has been calculated. As a result, there will likely be programmatic budget cuts and statutory changes made to close whatever that shortfall will be. Modest tax increases cannot be ruled out in addition to fewer/smaller programmatic cuts. Of course, what actually happens will largely depend on how long COVID-19 drags on the economy.

The Legislature will also have to tackle redistricting this session. However, the Trump Administration has moved to delay the release of census numbers until late Summer 2021. That time frame may be too late for the Legislature to take up redistricting, even if they use preliminary numbers. Stay tuned to see how this plays out.

Lastly, but certainly of very high importance, the Legislature will hopefully take action on USF. You are all aware of the efforts Mark and the entire TTA lobby team have been undertaking to help resolve that issue. We have successfully mobilized over 25 legislators and allied groups such as the Ag Council and the Texas Association of Rural Schools to bolster our position. But we will continue to need your help talking to your legislators like never before. We’ll keep you up to date as things progress. Please let us know of any contact you have with legislators as we approach the session. Stay safe!

If you have any comments or questions, please contact TTA.