Texas House approves $302.6 billion state budget with tax cuts and teacher and state employee raises

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The Texas House on Thursday approved a historic $302.6 billion state spending plan for the next two years, sending to the Senate a proposal that would bring pay raises to state employees, as well as tax cuts and more mental health services to millions of residents.

The plan pushes some $136.9 billion in general revenue to some of the state GOP leadership’s biggest priorities for the next two years, including $17.5 billion for property tax cuts, $5 billion in new money for schools and $4.6 billion on border security.

The budget plan also leaves tens of billions of dollars in unspent general revenue available to them after record-breaking tax collections left the state flush with more cash than ever before. That includes a $37.2 billion surplus higher than the entire budgets of 24 states.

House Bill 1 passed on a vote of 136-10, with a handful of Democrats and two Republicans, Rep. Tony Tinderholt of Arlington and Rep. Brian Harrison of Midlothian, voting against it.

“I am extremely proud of the work that we’ve done,” House Appropriations Committee Chair Greg Bonnen said at the end of a surprisingly short, fairly good-natured day of debate. “This bill provides historic investments in property tax relief and public education … higher education and infrastructure critical to our state.”

Some lawmakers who voted against the budget bill cited reasons that included too little cash for public schools and teachers, as well as a ban on diversity, equity and inclusion programs.

“I’ve never voted against a budget in all my years here,” said Rep. Gina Hinojosa, D-Austin, who was president of the Austin ISD school board before winning election to the House in 2016. “For parents, for moms all across the state, who know that our public schools are in desperate need.”

Other Democrats voted for the bill because they liked some of its aspects and wanted to support those historic efforts. Rep. Donna Howard, an Austin Democrat and member of the House Appropriations Committee, said the budget bill includes nearly $20 billion in new spending.

“I think we need to go forward with it and continue to work on it and make sure we get more that addresses the needs of Texas,” Howard said.

House members also approved on a 147-1 vote a $14 billion emergency spending bill for the current cycle that spends $1.6 billion on school safety, $3.5 billion for cost-of-living pension increases for retired teachers, $400 million for flood mitigation projects and $1.5 billion for the Texas Semiconductor Innovation Fund.

An attempt to expand access to Medicaid in the emergency bill, which Democratic supporters said would provide up to 1.5 million Texans with health insurance, was voted down on a party line vote of 83-65.

The emergency spending bill now goes into a conference committee for the chambers to work out their differences.

The day brought a decisive blow to at least one A-list priority for Gov. Greg Abbott and Lt. Gov. Dan Patrick when a bipartisan coalition of House members enacted a ban on state funds going to private school vouchers.

Taken a few hours before the Senate approved a bill that would implement such a program, the 86-52 House vote on that amendment signaled an uphill battle for the effort in the House, which has for years rejected programs that allow public school funds to be used at private schools.

Lawmakers also clashed over language in the bill that bans funding from schools that use diversity, equity and inclusion practices, a debate that drew Black, brown and white Democrats to make impassioned speeches in favor of diversity — and tell personal stories about overcoming racial challenges in their own lives.

Republicans protected funds to support property taxes from Democrats’ attempts to redirect them for additional teacher pay raises, more money to public schools or increased funding for special education. A legislative commission recently said special education in Texas is underfunded by about $2 billion.

The budget bill includes a pay raise for teachers, but Rep. Trey Martinez Fischer, the House Democratic Caucus chair, pushed for another $4 billion to raise it from about $3,800 per teacher to $10,000 over the next two years. The effort went down on a 79-66 party-line vote.

“Thanks for not caring about teachers,” Martinez Fischer said, eliciting boos and catcalls from the House floor.

Republicans said repeatedly during the debate that their vote against the amendment was not a vote against teachers.

“When we talk about taking money for property tax reduction to put into teachers’ salary, I’ll remind you that teachers pay property taxes as well, and they’re looking for some relief,” said Gary VanDeaver, R-New Boston.

Thursday’s House debate was one of the shortest floor debates on the budget in recent Texas House memory, wrapping up after only about 10 hours. Historically, it starts early in the day and lasts well past midnight.

Democrats prepared for a partisan beatdown in the GOP-dominated House chamber, but they avoided many of those battles when, in a sweeping move early in the day, lawmakers from both parties dropped hundreds of previously planned challenges to parts of the 979-page budget.

In doing so, they appear to be poised to skip public debate on three-quarters of the nearly 400 prefiled amendments members submitted earlier this week.

“House Bill 1 is a spending plan that every Texas House member should be proud of, and our chamber looks forward to working with the Texas Senate to get House Bill 1 to the governor’s desk in the near future," House Speaker Dade Phelan said in a statement after the vote.

It was a parliamentary maneuver that allowed the outnumbered Democrats to avoid outright defeat on some of their efforts, which would have included defunding Abbott’s border mission Operation Lone Star.

It also allowed Democrats to focus the day on their efforts to direct more money to schools, which they say are still underfunded, and to teachers, who they argued are still underpaid even with the raise in the budget bill, Martinez Fischer said.

“We don’t want to take away from what our message is about. We’re not doing our best work on public education,” he said. “I think what you saw today was Texas Democrats taking a stand for education. There are a lot of ideas [that were delayed Thursday] that are still coming to the House floor for debate. We’ll have another bite at that apple. But we are laser-focused today.”

And it benefited Phelan, Bonnen and the rest of the House members by allowing the chamber to avoid some divisive votes on politically tricky issues during the budget process — although many of those are likely to pop up in future legislation.

The budget is the only thing the lawmakers are constitutionally required to pass during the session, and budget leaders often try to keep the bill clear of issues that could bog them down during the arduous process.

The chamber didn’t avoid all the wedge issues, though. Spirited debates over abortion and diversity programs at campuses ended in party-line wins for Republicans, who succeeded in banning programs that promote diversity, equity and inclusion, while re-upping state funding for anti-abortion programs.

Most of the scuttled amendments went into an unfunded wishlist to be considered during budget negotiations behind closed doors later in the session, including $4.2 billion in supplemental pension checks and pay raises for some 123,000 retired state employees.

A number of amendments by North Texas state Rep. Bryan Slaton, R-Royse City, one of the most hardline conservative members of the chamber, were pulled down or delayed when Slaton was marked absent from the House floor for the entire day.

Those amendments ranged from defunding the Texas Commission on the Arts to directing Comptroller Glenn Hegar to include statements about abortion, gun rights and defining genders in his tax policy e-newsletter. They also included an attempt by Slaton to name county morgues funded with border security dollars after President Joe Biden.

Amendments that passed included measures creating a grant program for kindergarten readiness, training first responders on how to handle the deadly drug fentanyl when they encounter it on the street and increasing the oversight of how state money was spent on the botched prosecution of the El Paso Walmart shooter.

Abbott’s office was able to survive, without any votes or debate, the attempted raids by both parties on his special programs that fund economic development projects, disaster relief and Operation Lone Star — his border security mission that has cost nearly $4 billion in taxpayer funds since it started in early 2021.

House budget leaders were able to guard the border security funding, which is spread out over several agencies in the bill, including $1 billion for Abbott to use at his disposal for the border.

The House tossed tens of millions in taxpayer dollars to crisis pregnancy centers that have been taking on more pregnant clients now that abortion has been largely banned in Texas.

“They desperately need this significant increase in funding to keep up with demand,” said state Rep. Cody Vasut, R-Angleton, author of an amendment that earmarked $80 million in general revenue to the state’s Alternatives to Abortion program. “The demand is there. The need is there.”

The funding passed on a mostly party-line vote of 88-59.

Most Democrats objected, with several arguing the centers are largely unregulated and don’t offer actual health care.

“Why should this body be investing more funds in a program that has very little accountability and is not shown to actually help women and families when we have good programs and good options, like funding our social support networks that are already in place?” said Rep. Erin Zwiener, D-Driftwood.

House members also approved $402 million to stabilize the state’s juvenile justice system and $343.8 million to install air conditioning in the state’s prisons.

The bill includes billions of dollars for mental health services, including new funding for community mental health services, new hospitals and substance abuse treatment.

The conservative state budget leaders who ran the process were staunch in their defense of the bill against statutory and constitutional spending limits, and they showed no appetite for breaking them.

Constructed over 95 hours of testimony by more than 700 witnesses — in addition to Thursday’s floor debate — the legislation now goes to the Senate Finance Committee — which has been readying its own proposal that is significantly different from the House version.

After their version passes the Senate floor later this month, the two chambers will meet in conference committee to negotiate a compromise bill. Then both chambers will have to approve it before it can be sent to the comptroller for certification and the governor for his chance to veto parts of the budget before it becomes law.

One major disagreement between the two chambers is over how to shell out property tax relief long promised by the state’s top Republicans — with House and Senate leaders sparring over their main proposals. The House’s chief idea to cut taxes is to limit property appraisals for homes and businesses — while the Senate wants to boost the state’s homestead exemption and give targeted tax cuts to businesses.

Another sticking point could arise over $10 billion to address the stability of the energy grid, approved by the full Senate but missing from the House budget. The House has yet to have a hearing on the bill and has so far declined to commit to any funding for the legislation — part of a priority energy-related package pushed by Patrick, who presides over the Senate.

Kate McGee and Josh Fechter contributed to this story.

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