The Texas Governor, Lieutenant Governor, and House Speaker have directed state agencies and universities to each submit a plan to reduce spending by 5%.
Certain agencies involved in battling the COVID-19 outbreak will be exempt from the budget cuts.
As co-chairs of the Legislative Budget Board, Lieutenant Governor Dan Patrick and House Speaker Dennis Bonnen have the authority to adjust agency budgets in the interim between legislative sessions.
In a letter to the agencies dated May 21, Patrick, Bonnen, and Governor Greg Abbott stated, “It will take months until we know the true extent of the economic ramifications of COVID-19, and how combating this virus will impact state finances.”
“To prepare for this economic shock, we must take action today to ensure that the state can continue providing the essential government services that Texans expect.”
The ‘Big Three,’ so-called because constitutionally they are the most powerful leaders in the executive and legislative branches, urged the agencies to freeze hiring unrelated to the COVID-19 response, defer capital expenditures, cut ‘avoidable’ travel expenditures, and slash administrative expenses that are not ‘mission critical.’
Agency heads face a June 15 deadline for submitting their cost-saving plans to the Legislative Budget Board and the Office of the Governor.
The following agencies and programs are excluded from the 5% reduction:
- Appropriations to the Texas Division of Emergency Management, the Texas Department of State Health Services, the Texas Workforce Commission, the Texas Military Department; and the Texas Department of Public Safety;
- Funding for debt service requirements and bond authorizations;
- Current law requirements for the Foundation School Program and school safety;
- Funding for Child Protective Services;
- Benefits and eligibility levels in Medicaid programs, the Children’s Health Insurance Program, the foster care program, the adoption subsidies program, the permanency care assistance program, and services for individuals with intellectual or developmental disabilities;
- Funding for behavioral health service programs;
- Appropriations for Correctional Security Operations and Correctional Managed Health Care at the Texas Department of Criminal Justice;
- Appropriations to Health Related Institutions and Community Colleges; and
- Employer Contributions to the Teacher Retirement System and Employees Retirement System funds and to Social Security.
Beyond the current fiscal year, deeper cuts could be required of the agencies. The letter states, “When the state revenue picture becomes clearer in the coming months, it may become necessary to make additional budget adjustments.”
Plans for those cuts will be presented in the form of Legislative Appropriations Requests, which are typically presented in the fall and serve as precursors to the final agency budgets adopted during the legislative session the next spring.
Read the letter to Texas agencies and universities:
