What to Expect at the 84th Legislative Session

Brian Bresler

Oh boy! Excited? The 84th Legislative Session is coming to Austin after a busy interim. Put on your hat, as it will be raining dollars or tears, depending on the committee. And with one, if not two, special sessions likely, the fun will not be over anytime soon.

The theme of this year’s session may have just changed from “pie in the sky” to “bargain basement” now that the most definitive bellwether for the state budget, West Texas Intermediate crude oil, has lost half its value. Six months ago, folks were arguing about how to spend the expected budget surplus, but now the question is what might be cut.

Luckily, crude is a very volatile commodity, so count on two things:

  1. The price at the end of the session will not be the same as the price at the beginning of the session
  2. Whatever price they assume to help set the budget will not be the price for the biennium

 

So, it’s anyone’s guess how much money the state will have when the Legislature reconvenes in 2017. On the bright side, the state spends a fair portion of the budget on gasoline and diesel, so they will save on those expenditures even if oil and gas revenues go down.

Luckily, we are entering this session in fair financial shape, taking some pressure off the budget process. But as crude and natural gas prices fluctuate, so will the noise about how big or small the budget surplus should be. All eyes will be on new Comptroller Glenn Hegar, who is responsible for forecasting the average price of oil over the next biennium. In a famous instance during the last big oil crash in the 1980s, then-Comptroller Bob Bullock famously asked a senior Exxon executive what the price of oil would be over the biennium, and the answer was “nobody knows for sure.”

After Governor Perry’s 14 years in office, we knew what to expect from the executive branch on the budget. But now, a big question is how much Governor Abbott’s management of the rainy-day fund will differ from his predecessor’s.

New leadership in the Senate under Lieutenant Governor Dan Patrick may also lead to some changes. In the House, it remains to be seen whether certain State Representatives can succeed in unseating three-term Speaker, Rep. Joe Straus of San Antonio. House members have not been forced to vote publicly for the Speaker since 1975, but that may be the case this year, another way to say that it may not be business as usual in Austin this spring. It appears that Speaker Straus has the votes, but the public vote will be interesting nonetheless.

A lot of time and energy will be spent on familiar issues from previous sessions, namely: voter requirements, fracking safety, public schools, higher education, law enforcement, border security, cattle raising, insurance, property taxes, transportation, and water, Prop. 1 and Prop. 6 notwithstanding. With $23 billion in current transportation debt, and $40 billion in overall debt, the buzzword this year is pay-as-you-go.

Prop. 1 is expected to provide only $1.75 billion additional transportation dollars this year. Governor Abbott has stated that transportation is one of his top priorities, and he aims to fund transportation to the tune of an additional $4 billion per year without new taxes, fees, or tolls. He proposed to accomplish this primarily by stopping the bleeding from the State Highway Fund, which over the years has been used for non-transportation expenditures such as education.

Based on the interim charges from the 83rd session, you might expect that energy, water, and transportation will be high priorities. But since the interim charge priorities are at least 12 months old, and based on a current reading of the tea leaves, the priorities in the chart will be likely to emerge during the 84th session.

And bear in mind: No matter what the stated priorities and interim charges are, something always comes up to change the course of human events. You can be sure it will be an interesting spring in the Capitol — and if we end up with a special session, it may be a long, hot summer as well.