The 78th Legislature has successfully balanced the budget for the next two years with no new taxes even in the face of a $10 billion budget crisis. An overall funding level of FY04-05 of $117.4 represents an increase in spending of $1.6 billion compared to the FY02-03 budget, largely due to more efficient use of federal and other funding sources.
- The passage of HB 7 solves the funding crisis for FY03 through $1.4 billion in budget reductions without hindering the delivery of critical services.
- Appropriations of $500 million from the rainy day fund covers the FY03 cost overruns in Medicaid and CHIP caused by the downturn in the economy.
- Appropriations of $295 million from the rainy day fund for the Governor’s Enterprise Fund in order to help stimulate the economy by investing in new businesses choosing to create new jobs in Texas.
- General state revenue appropriations for FY04-05 are at $58.2 billion, or $2.5 billion less than FY02-03 representing the first real general revenue reduction since World War II.
Public Education:
- Increases funding for the Foundation School Program by $1.2 billion in general revenue over current law amounts. The additional funds are to be distributed to districts based on $110 per student in weighted average daily attendance.
- Decreases Texas Education Agency bureaucracy by approximately 50 percent (more than $63 million).
- Maintains funding for children with disabilities, gifted programs, and academic competition at current levels.
- Establishes new funding mechanisms for after-school and enrichment programs, identifying $85 million in state and federal funds.
- Allows the Commissioner of Education to establish a pilot program to begin reimbursing teachers for the cost of classroom supplies provided to their students.
- Fully funds contributions to the TRS Trust Fund.
Higher Education:
- Decreases general revenue funding for general academic institutions by no more than 7 percent for any institution.
- Decreases general revenue funding for health-related institutions, including Baylor College of Medicine, by no more than 5 percent.
- Decreased general revenue funding for community colleges assures a reduction of no more than 10 percent for any college.
- Increases funds debt service on tuition revenue bonds for institutions in the South Texas Border Initiative by $15 million.
- Funds Texas Grants at $324 million and tuition equalization grants at $141 million to ensure that a college education can be a reality for Texas students.
- Provides an additional $86 million in research grant funds to universities.
- Ensures that all children who are eligible for Medicaid today will remain eligible for Medicaid.
- Ensures children of eligible Texas families who have incomes up to 200% of the federal poverty level access to insurance coverage under the Children’s Health Insurance Program (CHIP) with greater accountability due to asset testing to prevent fraud.
- Maintains services to pregnant women up to 158 percent of the federal poverty limit. All pregnant women under age 19 continue eligibility at current income levels.
- Maintains services to Community Care Clients, including the Frail and Elderly Program.
- Maintains all state schools for people with mental retardation.
- Maintains all state hospitals for people with mental illness.
- Fully funds the immunization and epilepsy programs.
- Maintains the County Indigent Health Care Program.
- Increases the maximum monthly Temporary Aid for Needy Families (TANF) grants.
- Adds 356 staff for estimated caseload growth at Child Protective Services.
- Increases foster care funding for estimated caseload growth.
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