TMA Legislative News Hotline: Friday, March 17, 2017


The realities of the revenue shortfall Texas faces for the 2018-19 budget cycle started to hit home at the state Capitol over the past 48 hours. Budget writers in both the Senate and House struggled to find ways to fit their two-year spending plans into the available revenue as officially forecast by State Comptroller Glenn Hegar. The Senate Finance Committee is expected to complete its spending bill next Wednesday, with the House Appropriations Committee following suit next Friday.

Senate Plan: Yesterday, we reported on the cost-savings recommendations from the Senate Finance Committee’s workgroup on education. The committee’s workgroup on health and human services laid out some similarly stark numbers. TMA budget analysts continue to study the sometimes-byzantine verbiage in the documents, but our preliminary review shows: 

  • Up to $1 billion in reductions from an already tight budget for Medicaid;
  • Little action to restore proposed cuts in staff and services — including infectious disease prevention and public health preparedness and capacity — at the Texas Department of State Health Services;
  • A requirement that medical schools that contract to care for state employees accept payment rates equal to Medicare; and
  • A mandate to discourage state employees from using free standing emergency departments. 

Details on the almost-final House budget plan are still coming together, but TMA analysts believe it will include a Medicaid cut of about $550 million. Among other items medicine has asked lawmakers to fund, TMA is fighting diligently against efforts to cut physicians’ Medicaid payment rates in this tight budget cycle.

House Supplemental Budget: Rep. John Zerwas, MD (R-Simonton), convened the House Appropriations Committee yesterday to study House Bill 2, the supplemental appropriations bill to cover shortfalls in the current (2016-17) biennium. Those deficits came about because lawmakers in 2015 intentionally did not appropriate enough money to cover items like caseload growth in Medicaid. The roughly $5.3 billion in HB 2, which includes some federal funds, also would cover repairs at state mental hospitals as well as budgetary holes in public education, the state teachers’ pension program, and the child welfare and foster care programs.

The HB 2 plan includes drawing down about $2.47 billion from the state’s Rainy Day Fund, which currently has a balance of about $10 billion. Legislators differ in the definition of what constitutes a “rainy day” and when it would be appropriate to tap into that fund. Given the budget crunch, Representative Zerwas says, that time is now. "This withdraw is critical and only gets us part of the way to address the state's needs," he said.

In a game of budgetary chicken with their Senate counterparts, the House Appropriations Committee inserted a poison pill in its draft of the 2018-19 budget. If HB 2 doesn’t pass using at least $2.47 billion from the Rainy Day Fund, they’ll make $4.6 billion worth of cuts across-the-board in the 2018-19 spending plan. The items on the cut list are: 

  • $1.47 billion from public schools;
  • $1.34 billion from long-term care;
  • $900 million from higher education;
  • $263 million from child welfare;
  • $261 million from women’s health;
  • $152 million from children’s health;
  • $62 million from behavioral health; and
  • $43 million from the governor’s economic development funds. 

Budget Guide: In case you missed it, the Senate Research Center created “Budget 101: A Guide to the Budget Process in Texas,” with help from the Legislative Budget Board and the Texas Comptroller’s office. It is a comprehensive primer about the Texas government budget process.   


With the Senate and House both adjourned until Monday, there is no physician of the day today.



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