House Bill 3 Sustainability - UPDATED
USDE has released an additional $180 million for states to access via application to fund: (1) Microgrants for families, so that states can ensure they have access to the technology and educational services they need to advance their learning; (2) Statewide virtual learning and course access programs, so that students will always be able to access a full range of subjects, even those not taught in the traditional or assigned setting; and (3) New, field-initiated models for providing remote education not yet imagined, to ensure that every child is learning and preparing for successful careers and lives.
(UPDATE) While the US House of Reps has delayed returning to the Capitol to continue discussion on CARES 2, Speaker Pelosi stated they will continue working on legislation to mirror the first CARES act to infuse more dollars into the economy. The Senate is back in session working on their own version as well.
CARES Act rules are expected to be released over the next month. Commissioner Morath warned again this week to be wary of any estimates that are being shared ahead of the rules being released. There are many elements in the CARES Act bill that depend on decisions the Secretary of Education and Governor must make over the next several weeks.
Glenn Hegar was recently interviewed by the Transportation Advocacy Group and gave some measured updates on where Texas is economically. I recommend reading the Houston Chronicle's Summary.
(Review) House Bill 3 was funded through several mechanisms: reallocation of existing allotments (Cost of education index, high school allotment, small/mid-size allotment change), surplus revenue from state sales tax, diversion from oil/gas revenue, and revenue from certain online sales.
Two out of the four funding sources for HB 3 are currently dramatically reduced already (oil/gas and sales tax), Hegar has said the $3 billion of expected surplus is already gone. However the recently signed CARES Act infuses additional revenue to businesses and industries directly affected by the economic shut down (not directly to oil/gas, but to transportation and travel industries) along with infusing significant dollars to state medicaid programs. Only time will tell if there measures are enough to cover the loss of revenue, but this is one of the fastest stimulus response in our history to attempt to correct the downtown.
Prior to state shut down, the House Democratic Caucus formed the Special Committee of Closing Outdated Tax Loopholes & Exemptions largely to ensure HB 3 could continue with sustainable funding. Though possible tax reform will not be a panacea for budget shortfalls in the coming session, there are options for additional revenue for the state to consider. For example, based on the comptrollers latest estimates (2018) the state tax exemptions for the state total around $47.5 billion.
While the property tax growth cap was a big "win" for elected officials, it is largely the biggest cost of HB 3 in the coming years. Any statutory changes would need to wait until next session, but since Hegar is relatively confident that the state is covered for this fiscal year, a statutory adjustment to property tax increases may serve as an additional lever for relief for the next biennium.
Hegar is asking all agencies to review their budgets now for possible cuts. During the last recession Hegar stated that agencies were asked to cut their spending by 10% and estimates the same percentage might be necessary this time around. However, as stated above, many believe public education entitlements will be off-limits. Hegar is expected to present possible options to state lawmakers in the coming weeks.