Enrolled Bill Summary

            House Bill 1, the General Appropriations Act, appropriates $86.2 billion for the FY1998-FY1999 fiscal biennium beginning September 1, 1997. That amount, from all funding sources, reflects an expenditure increase of 6.8 percent over FY1996-FY1997. Of the biennial appropriations, $53.1 billion or 61.6 percent is derived from general revenue, both dedicated and undedicated. Another $24.6 billion or 28.6 percent comes from federal funding.

            Education receives $37.3 billion, an increase of 7.1 percent over the preceding biennium, while health and human services receive $26.1 billion, an increase of 4.2 percent. The act provides contingency appropriations for public school enrollment growth and caseload growth for temporary assistance to needy families. It continues Medicaid services for elderly and disabled immigrants affected by federal welfare reform legislation. Business and economic development is funded at $10.3 billion, the bulk going to the Texas Department of Transportation, which receives $7 billion for a biennial increase of 2.2 percent to that agency. Public safety and criminal justice receive $7 billion, an increase of 5.3 percent. That amount provides FY1998 funding for an expansion of state jail beds and FY1999 funding for two new high-security prison units.

            The Texas Constitution sets a limit on welfare spending, equal to one percent of the budget, and a limit on the growth of undedicated tax revenue relative to the estimated rate of state economic growth. House Bill 1 satisfies both limits. The other constitutional limitation is the "pay-as-you-go" provision, which limits certain budget expenditures to estimated biennial revenue. The legislation is more than $1 billion under the comptroller's most recent revenue estimate.

            Major capital expenditures for the biennium total $621.7 million. Debt service spending is $755.1 million. Of that figure, $729.6 million is subject to a statutory annual percentage limitation on debt service spending from constitutionally undedicated general revenue. The act is within the limit for both years of the biennium.

            House Bill 1 provisions include a reduction in full-time equivalent state employees; it provides for 222,767 for the second year of the biennium, a reduction of more than 4,000 from the positions budgeted for FY1997. The act adopts three salary schedules for different sets of state employees, a departure from the traditional single salary schedule. It provides a $100 per month salary increase for state employees.