Austin, Texas
February 13, 2013

Honorable Jim Pitts, Chair, House Committee on Appropriations
Ursula Parks, Director, Legislative Budget Board
HB10 by Pitts (Relating to making emergency supplemental appropriations and providing direction and transfer authority regarding certain appropriations.), As Introduced

House Bill 10, As Introduced would make net appropriations of $4,837 million from General Revenue Related Funds and an estimated $11,799 million from All Funds in FY 2013.  The appropriations are primarily intended to address the Medicaid shortfall in the current biennium.  Of these totals, an estimated $11,172 million in All Funds, or 94.6 percent, are appropriated to the Health and Human Services Commission and the Department of Aging and Disability Services for the Medicaid and Children’s Health Insurance Program (CHIP).  Other appropriation adjustments were made for the Foundation School Program and the Texas Public Finance Authority; however these changes were below the threshold level needed in the model to observe an appreciable difference in forecasted economic indicators.  As required under House Rule 4, Section 34 (a-1), the Legislative Budget Board has analyzed the dynamic economic impact of the bill using the REMI Policy Insight Model, a dynamic forecasting and policy analysis tool that uses a combination of econometric, input-output, and computable general equilibrium methodologies.

The baseline scenario in the model assumes current law, specifically that appropriations made in the 82nd Legislature are not adjusted and state agencies do not have sufficient funds to pay Medicaid and CHIP providers through the remainder of the biennium. In order to isolate the effect of these appropriations, this analysis is provided as a comparison of fiscal year 2013 with and without these supplemental appropriations, rather than a comparison to the prior biennium as such a comparison would not be ascertainable.  The appropriations made in House Bill 10 would provide sufficient funding for these programs through the remainder of the biennium and would result in an estimated avoidance of loss in total Texas non-farm employment levels of 285,000 jobs or 2.6 percent relative to the baseline scenario in fiscal year 2013.  Of this total amount, approximately 239,000 would be associated with the private sector and 6,000 would be associated with the state government sector.  In the absence of the House Bill 10 appropriations, employment levels in the baseline scenario would be achieved through some combination of attrition, cancellation of intended hiring, and layoffs. 

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