Texas Gov. Greg Abbott will decide how to spend federal COVID-19 relief money under budget compromise

AUSTIN — Gov. Greg Abbott almost certainly will not have to call lawmakers back to Austin to help him decide how to spend tens of billions of federal COVID-19 relief money in the next two years.

Nor would school districts be assured that some $16 billion of federal pandemic aid, approved by Congress for Texas schools in December and March, will be used on top of the state’s pledged support of public schools — rather than as replacements for state dollars.

Last month, House members voted to insert both requirements — that they get to have input and that school districts get a big boost from Washington — into a $246.8 billion, two-year state budget they passed 149-0.

But on Wednesday, 10 House and Senate budget negotiators disclosed that they have tossed both House provisions. That means, as he did last year, Abbott could confer with a handful of top lawmakers but make most of the decisions on federal aid’s use himself.

The budget conference committee members, wrapping up a couple of weeks of deliberations, tentatively approved and sent to the printer their spending decisions. The bill, Senate Bill 1, is the only bill lawmakers must pass in the session that ends May 31.

By tradition, the conference committee’s report on the budget is approved with no changes by both chambers and then sent to Abbott for his blessing.

“We will be bringing to the floor of both chambers a responsible budget that keeps Texas strong and successful,” said Senate Finance Chairwoman Jane Nelson, a Flower Mound Republican who was co-chairman of the negotiating panel.

Though final spending amounts won’t be released until later, and the conference committee’s decisions on a supplemental spending bill won’t be announced until Thursday, the budget turned out to be far easier to write than was expected as the coronavirus outbreak crippled the economy a year ago.

Eva DeLuna Castro, budget analyst for Every Texan, which advocates for more state spending on education and health care, said strong growth in real estate values, which push the tab for public schools away from the state and toward local districts through higher property taxes, and federal COVID-19 aid eased Texas budget writers’ task.

The next budget and the supplemental bill, which patches holes in the 2020-21 budget lawmakers passed last time, together benefit from about $7 billion in additional federal aid, she said.

The help includes $1.3 billion of first-round federal relief funds, which state leaders used to supplant spending of Texas’ own general purpose revenue on schools last summer; $3.9 billion of federal Coronavirus Relief Fund money in the supplemental bill, which paid for certain state health and public safety employees’ salaries this cycle; and more than $2 billion from higher federal matching funds for Medicaid, the state-federal health insurance for the poor and disabled.

“It’s like a tremendous contribution by the federal government to making our current budget balance,” DeLuna Castro said.

State GOP leaders have stressed that this session they’re keeping pledges made in 2019 to boost teacher salaries, revamp school funding and curb the increases in local school property taxes.

DeLuna Castro, though, said that’s only part of the budget tale: From community colleges to medical schools, the Higher Education Coordinating Board requested formula funding of $10.3 billion for the next cycle but would only receive just over $9 billion in the conference committee’s report.

While the House version of SB 1 demanded that the state prison system develop a plan to install air conditioning in each prison or state-run jail that is not cooled now by Nov. 1, 2022, conferees struck the provision, she noted. Although the House last week passed a separate bill requiring installation of AC, a similar measure remains parked in Nelson’s Senate Finance Committee. Between 1998 and 2012, more than 20 prisoners died from heat at state lockups.

Summarizing the budget decisions, DeLuna Castro said, “The really high-level version is they funded public ed because it ended up not costing much general revenue. They didn’t fund growth in higher ed. They didn’t do air conditioning in prisons. They didn’t decide that the Legislature should have a say in all this federal money.”

She referred to conferees’ decision to yank a rider sponsored by Rep. Geanie Morrison, R-Victoria.

Adopted 147-0, it would have required that none of the piles of federal relief and stimulus money flowing from Washington, as much as $35 billion, be spent unless the Legislature — in regular or special session — has approved.

By a voice vote, the House also embraced Austin Democratic Rep. Eddie Rodriguez’s rider barring use of federal education relief dollars to lessen the state’s pledge in the budget of its own financial support of public schools. The money would have “to supplement state spending, not supplant it,” Rodriguez explained. But conferees struck his provision, too.

House negotiators also swallowed a Senate provision requiring $350 million of general revenue savings from unspecified “cost containment.”

Under both chambers’ approved budgets, the state would spend about $797 million in 2022-23 on border security. It won’t be clear until the compromise on the supplemental bill is released, but it appears the budget negotiators may have increased, not decreased, the spending on state law enforcement at the Texas-Mexico border.