Capitol insiders: Texas Lt. Gov. Dan Patrick is letting the state's budget agency fall apart

Editor's note: This story has been updated to include statements from state Sen. Jane Nelson.

Tucked away in a quiet corner of Texas state government, an arcane team of 100 or so budget nerds has led a private, if stressful, life — running financial models, ensuring state government and its private contractors aren’t spending beyond their means, and keeping lawmakers informed about each line item in the state’s 1,000-page, $250 billion two-year budget.

But these days, interviews with current and former budget agency staff indicate the emptying halls of their downtown Austin office feel more like the setting of an Agatha Christie novel.

The Texas Legislative Budget Board, created in 1949 to support full-time experts who track fiscal issues for the state’s part-time Legislature, provides the analysis on which the state bases its budget calculations — for example, how much money it costs to pay public school teachers or to fund hospital beds for people in mental health crisis.

It’s up to state lawmakers to set spending priorities, but legislators say their ability to make funding decisions is only as good as the information they receive from the experts.

“The LBB provided invaluable, unbiased information, which is critical to the development of the state budget,” former state Rep. John Zerwas, a Richmond Republican who chaired the House Appropriations Committee, said in a statement.

The quality of that information may be in jeopardy; the agency is moldering as a quiet war erupts between its two masters.

State law names the lieutenant governor and House speaker as co-chairs of the 10-member board, which is supposed to jointly appoint an executive director to lead the agency. Last year, for the first time in nearly 70 years, that failed to happen; by Halloween, the agency will have been headless for a year.

Veteran employees have departed in droves with no one to replace them, leaving behind a trail of vacant offices and a dearth of institutional knowledge. Staff size has fallen 26% since 2015 — from 146 to 108 employees — and four of the agency’s five executive leadership positions will soon be unfilled. The agency’s lone remaining executive told a tearful staff last week that he, too, intends to resign.

Now, with House Speaker Dennis Bonnen announcing he will not run for reelection next year amid a scandal that has shaken the entire lower chamber, the board finds itself in its most precarious position yet.

Interviews with more than a dozen budget agency staff, Capitol staff and state lawmakers — who requested anonymity to discuss private board deliberations — indicate that the Senate’s presiding officer, Lt. Gov. Dan Patrick, has wielded a kind of veto power over the board to keep the agency undermanned and under fire.

They contend that his motive is to remake the agency to give the Senate more direct control over the number-crunchers; the current group of nonpartisan bureaucrats has produced analyses that at times conflicted with the lieutenant governor’s political messaging.

A spokesman for Patrick did not respond directly to those allegations, saying only that the lieutenant governor “has acted and will continue to act to ensure the state moves forward on a prudent and fiscally conservative path.”

“Lt. Gov. Patrick and the other legislative leaders who make up the Legislative Budget Board — not the LBB staff — have the final say on budget matters,” the spokesman, Steven Aranyi, said in an email.

The agency’s defenders fear such changes would jeopardize its ability to provide unbiased information crucial to lawmaking and ensuring state government stays within its constitutionally mandated spending limits.

“It’s dangerous and disheartening for this hub of data to have inadequate staffing and low morale,” said Ann Beeson, chief executive of the left-leaning Center for Public Policy Priorities. “Advocates like us rely on the nonbiased, credible data from the LBB to understand state spending, ensure transparency and solve problems. State leaders need to fully support the LBB as quickly as possible.”

Without an executive director, the agency’s remaining managers have sought unanimous approval from Patrick and Bonnen to make key decisions. For months, Patrick has either outright denied the agency’s requests or simply not responded to them, according to people with knowledge of the board’s discussions.

Permission to fill staff vacancies? No. Permission to publish routine reports? No. Permission to approve state agencies’ requests for extra funds? No response.

House lawmakers said they depend on a fully functional budget agency to govern efficiently and effectively.

“I think the Legislature would be in very bad shape without their input, and it’s very difficult to understand how they can function without leadership,” said state Rep. Donna Howard, an Austin Democrat on the House Appropriations Committee.

“They provide an objective piece of information that the legislative body needs,” she continued. “They take the politics out of it. They look at it objectively.”

Texas’ legislative branch — the House and Senate — derives much of its power over the executive and judicial branches by controlling how the state spends its money. The staff of the Legislative Budget Board, which tracks whether state agencies spend money as lawmakers intended, can be one of the Legislature’s most powerful weapons in that system of checks and balances.

Yet Patrick is said to relish the hollowing out of the legislative agency he jointly oversees, according to interviews with lawmakers and Capitol staff. In 2016, 2017 and 2018, the Senate he presides over declined to approve funding to support the agency’s operations, gutting its ability to hire and pay staff; at least once, he ordered the agency not to publish its usual report examining state government efficiency.

His long-term goal, which he has outlined to other state policymakers, is to replace the jointly run budget agency with two independent organizations, one under the Senate and another under the House, according to two people who were briefed on the discussions.

Doing so would give the lieutenant governor and the House speaker more control over budget analysis — and it could yield conflicting projections and opinions by each chamber’s budget experts.

"A nonpartisan Legislative Budget Board that provides factual, objective analysis is critical to responsible policymaking,” former House Speaker Joe Straus said in a statement. “The LBB has been structured to protect it from undue influence exerted by a single office or legislative chamber. I did not always like the answers we got from the LBB staff, but I knew those answers were based on research rather than politics."

For the last four years, the agency’s internal strategy has been to make do with less. When it became clear that no one would replace Ursula Parks, the executive director who stepped down last October, the agency’s four assistant directors assumed joint leadership of the agency.

Two assistant directors, Julie Ivey and Paul Priest, retired earlier this year. Assistant Director Sarah Keyton wrote to staff this month that she had taken a job at Texas Tech University and would leave the agency in November. The same day, Assistant Director John McGeady told staff that he also intends to leave, according to two LBB employees. (An agency spokesperson did not dispute that account, saying only that McGeady “has discussed future plans with some staff.”)

State Sen. Jane Nelson, Patrick’s lieutenant who oversees the upper chamber’s budget-writing committee and also sits on the Legislative Budget Board, said, in a statement issued after this story's publication, that the LBB staff “provides critical support to the appropriations process, and filling these vacant positions is an urgent priority.”

Seven hours later, Nelson issued a new statement: "The LBB staff should be providing unbiased information to the legislature in a timely, transparent manner. Filling the director position is key to getting the LBB staff back on track in meeting its core mission, and I know that is where the Lieutenant Governor is focusing his attention."

Current and former employees say morale has reached a nadir. As more veteran employees leave, the remaining analysts wonder aloud how many additional responsibilities they will be forced to shoulder — and whether the reports they spend months compiling will ever see the light of day. Some have found more lucrative opportunities at other state agencies.

From January 2015 to September 2019, the average state employee salary grew 12%, but among LBB staff, the average pay increase over the same time period was less than 2%. (The median salary of an LBB staffer in September 2019 was $77,000, according to a Texas Tribune analysis of state data.)

And the share of employees who had at least 10 years of experience at the budget board dropped from 54% in January 2015 to 44% in September 2019. One recently departed staff member described the agency’s brain drain as “catastrophic.”

“People have no idea the knowledge required to put the budget together,” one Legislative Budget Board employee said.

Capitol insiders fear the dwindling number of experienced analysts could slow down the budget-writing process or result in costly errors.

The agency’s work is most visible during the legislative session, when staff members shepherd the state budget — the only law the Legislature is required to pass. But their oversight of state spending continues year-round, and preparation for the next budget cycle begins months in advance, when agency staff compile lists of funding requests from all of state government.

After the legislative session begins, LBB staff unveil their draft budgets, routinely testify in hearings, and prepare explanatory memos for lawmakers about what gets funded and why.

Capitol staff told the Tribune that a weakened LBB could lead to a backlog of “fiscal notes” — the analyses that forecast how much a new state law would cost to implement — and that could sow chaos during a typically frantic legislative session that gives lawmakers only 140 days to review and consider thousands of bills.

“I don’t know where LBB’s heading, but I do hope they’re going to be around,” said state Rep. Oscar Longoria, a Democrat from Mission and vice chairman of the House’s budget-writing committee. “They’re a tool that I’ve used a lot, and if we don’t have that tool as appropriators, it’s going to make things very difficult for us.”

Chris Essig contributed to this story.

Disclosure: The Texas Center for Public Policy Priorities has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.