Texas business and corporate leaders discuss the upcoming legislative session

Less than three months before the start of Texas’ 88th legislature, a panel of business and political leaders met at Round Rock on October 25th. The panellists discussed important issues that await them during the legislature.

When the January session begins, lawmakers will have access to $149 billion in general revenue, which will be used to support a variety of programs across the state. A surplus of $27 billion will also be available, according to a revenue estimate by Comptroller Glenn Hegar, as unexpected cash flows into the state from inflation, high gas prices and more.

fund education

According to John Hryhorchuk, executive vice president of politics and advocacy for Texas 2036, a public policy organization, the top spending priority for Texas voters is public education.

From September 6-11, Texas 2036 polled 1,000 Texas voters on their views on major political issues and the future of the state. When asked how the $27 billion surplus should be spent, respondents said they would allocate an average of 20% of the surplus to public schools.

According to Texas 2036, 79% of voters supported a pay rise for teachers.

Hryhorchuk said he expects “a lot of money [and] much discussion” in the direction of education during the legislature. He emphasized the importance of “[making] sure that our public school graduates are poised to fill the jobs of tomorrow.”

According to the Kids Count Data Book 2022, a report by the Annie E. Casey Foundation, Texas ranks 33rd in the nation for education.

Funding for community colleges was also discussed during the event. Established by lawmakers in 2021, the Texas Commission on Community College Finance was tasked with finding a new way to fund community colleges.

On Oct. 18, the commission unanimously approved its recommendation to overhaul the state’s complicated allocation system and focus primarily on measurable student outcomes, which include graduation and transfer rates, valuable credentials, and credentials for high-demand fields.

The recommendations, which were widely supported by educators and labor leaders across Texas, were introduced to the Legislature in early November. Commission leaders will work with lawmakers to draft a bill before the session.

The commission “recommends significant improvements in financial alignment so that community colleges are rewarded and motivated to work specifically with businesses to meet labor needs,” Hryhorchuk said.

infrastructure and development

Legislators are also likely to invest in infrastructure, such as highway repairs and flood protection, Hryhorchuk said. Access to broadband is also an important issue for the state, he said. Some of the broadband funding during the height of the COVID-19 pandemic came from federal funds that are about to expire.

The panelists also discussed Chapters 311, 312, and 313, which are part of the Texas Internal Revenue Code. Chapters 311 and 312 allow counties to grant property tax breaks to attract businesses to the area, according to Carlton Schwab, CEO of the Texas Economic Development Council.

Schwab said that under Chapter 313, school districts can enter into a “cap agreement” that caps property taxes for 10 years.

However, these chapters must be regularly re-approved by the legislature. The legislature did not reauthorize Chapter 313, meaning the provisions will go away on December 31.

To continue attracting large corporations and major projects to Texas, lawmakers must pass new legislation similar to Chapter 313, according to Schwab.

“It’s absolutely critical for Texas to stay competitive,” said Megan Mauro, senior vice president of policy and advocacy for the Texas Association of Business. “…We have seen projects chosen by other states for these tremendous developments that would have brought them [millions to Texas].”

Schwab said a bill replicating Chapter 313 is likely to pass in the Texas House, but the Texas Senate “is going to be tight under the best of circumstances.”

The 88th Texas Legislature will convene on January 10, 2023.

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