State Rep. Darby: State Will Tackle Flat Revenues from Sluggish Economy in 85th Legislative Session

SAN ANGELO, TX - State Rep. Drew Darby said that as this region’s representative in Austin, it’s his job to be the Concho Valley’s primary cheerleader.

“But it’s a difficult time to be a cheerleader in Austin,” he said, as he opened his remarks offering a glimpse of what he thought the 85^th legislative session will accomplish. The Texas Legislature meets every two years, with the 85^th opening on Jan 01, 2017.

Darby spoke to a packed room at the monthly San Angelo Chamber of Commerce luncheon in the Crystal Ballroom of the Cactus Hotel in downtown San Angelo Tuesday.

Last session’s ballot initiative took $1.5 billion out of general revenue and placed it into a road building fund.

“Took it out of the left pocket and moved it to my right pocket,” he said.

But that’s not all the money the state removed from its general revenue fund in a down economy, Darby noted.

“We took $5 billion away that we could use to fix our education system,” he said. “The point is, we’ve made decisions as a state that have consequences.”

Darby asked, “Does anyone in this room want to turn down an additional $10,000 per year in property tax exemptions?” 

The increased property tax exemption cost the state $1 billion biannually and that’s lost revenue that won’t be around to use next session.

The lost revenue from the state coffers from a declining oil and gas market is coupled with the fact that Texas is growing in population but not in tax revenue to keep up with the growth.

The state’s two primary sources of revenues are the state sales tax and the margins tax, or franchise tax, on Texas businesses. The margins tax was reduced last session by $3.8 billion.

Among the expense items Darby views as unessential is the $853 million per year for security along the Texas-Mexico border.

“This is [really] a function of the federal government, yet our state has to spend $853 million to protect our border,” he said. He said Governor Abbott is looking at increasing the border security budget to $1 billion next session.

“Last session, I started with $6.8 billion in the bank; this session I’ll be lucky to start with a half billion dollars. The state budget is a $218 billion, two-year budget,” he said.

Because of prior commitments and set-asides, Darby estimates that the appropriations committee, of which he is a member, only has control over 15 percent of it, or approximately $33 billion.

He said the state has painted itself into a corner when it comes to discretionary spending with prior set spending priorities.

There are also cost overruns from last session’s budget that will need to be covered before the spending priorities are set in 2017. Two cost overruns that stand out for Darby are increased health care costs for the state prison system and Medicaid.

Darby lamented that there particularly wasn’t enough money to make many enhancements to the K-12 education system. Yet 85,000 new students enroll in Texas public schools every year, he said.

K-12 public education is Darby’s top priority, followed by higher education.

In the K-12 level, Darby predicts an assault on it.

“There will be people who will try to put lipstick on a pig. They’re going to tell you, under the guise of school choice, to invest in education scholarships. They’ll want you to invest in education account and scholarships. These are just codewords for vouchers, diverting pubic dollars for private institutions,” Darby said.

The private schools want the money with no state controls over the quality of education they will provide.

“They don’t want the accountability or the reporting requirements,” he said. But they want taxpayers’ money, he noted.

After his speech, Darby clarified that in his district, many of the schools are smaller, rural concerns. If the state dedicates the budget to school choice, funding it will take away resources from these smaller school districts, especially like Grape Creek and Christoval. But larger school districts like the San Angelo ISD will be impacted as well.

The next legislature will contend in a state with a sluggish economy and flat revenues that accompany that, Darby said.