HB 1, Committee Report 1^st House, Substituted (CSHB 1) would appropriate $209,785.1 million from All Funds sources during the 2016-17 biennium.  This represents an increase of $7,702.0 million, or 3.8 percent, from the 2014-15 All Funds estimated/budgeted levels.   As required under House Rule 4, Section 34 (a-1), the Legislative Budget Board has analyzed the dynamic economic impact of the bill.  The effects on employment, personal income, GSP, and other economic variables, assuming appropriation levels under CSHB1, were analyzed using the REMI Tax-PI Model, a dynamic forecasting and policy analysis tool that applies a combination of econometric, input-output, and computable general equilibrium methodologies.  The forecasted changes in several economic indicators for the state of Texas, as a result of CSHB1 spending relative to a baseline scenario, are displayed in Table 1. 

The analysis reflects the predicted effects on the number of state employees and the impact on private sector employment as a result of the adjusted appropriation levels in CSHB 1 relative to a baseline scenario where 2016-17 appropriations were held constant at the 2014-15 levels.  It is important to note that the numbers in the tables are not all new jobs, rather they are changes in employment levels relative to a scenario where government spending remained constant from the 2014-15 to the 2016-17 biennium, a scenario in which the reduced employment levels would have been achieved through some combination of attrition, cancellation of intended hiring, and layoffs. Further, note that the employment concept used in the analysis is state employment data calculated by the U.S. Bureau of Economic Analysis and differs from state FTE levels used in the General Appropriations Act.  CSHB 1 limits state FTEs to 215,867 in FY16 and 216,162 in FY17.  State authorized FTEs are reduced by 2,127.3 when comparing FY 2015 to 2017; however, this reduction is largely to align with the actual experience of higher education FTEs in 2014. 

The increased state expenditures over the previous biennium are expected to avoid employment reductions and increase private sector employment levels by 103,963 in 2016 and 110,923 in 2017 over the no spending growth scenario, while simultaneously avoiding employment reductions and increasing state government employment by 2,959 in 2016 and 3,143 in 2017 over the no spending growth scenario, subject to the caveats identified above.  The corresponding estimate of local government employment is an increase of 9,656 in FY 2016 and 10,321 in FY 2017. In addition, Table 1 displays the corresponding effect on Gross State Product, Personal Income, and inflation.