LEGISLATIVE BUDGET BOARD
Austin, Texas
 
DYNAMIC ECONOMIC IMPACT STATEMENT
 
85TH LEGISLATIVE REGULAR SESSION
 
March 29, 2017

TO:
Honorable John Zerwas, Chair, House Committee on Appropriations
 
FROM:
Ursula Parks, Director, Legislative Budget Board
 
IN RE:
SB1 by Nelson (General Appropriations Bill.), Committee Report 2nd House, Substituted

SB 1, Committee Report, 2nd House, Substituted (CSSB 1) would appropriate $218,150.1 million from All Funds sources during the 2018-19 biennium.  This represents an increase of $1,906.2 million, or 0.9 percent, from the 2016-17 All Funds estimated/budgeted level.

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 changes under CSSB 1 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 analysis estimated the predicted impact on the number of state employees and the impact on employment by the private sector and local governments in Texas as a result of the changes in state expenditures resulting from the 2018-19 appropriation levels in CSSB 1 relative to a baseline scenario where 2018-19 state expenditures were held constant at 2016-17 appropriated levels.
 
It is important to note that the numbers are not all new jobs; rather they are changes in employment levels relative to the baseline scenario where government spending remained constant at previously adopted 2016-17 levels.  Further, note that the employment concept used in the analysis is non-farm payroll employment calculated using source data from the U.S. Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics (BLS), and differs from state FTE levels used in the General Appropriations Act.  For instance, two halftime workers would be counted as 1 FTE in the GAA, but two jobs in the REMI employment data.  The state expenditures in the 2018-19 biennium are expected to increase private sector employment levels by 36,852 during the 2018-19 biennium relative to the baseline scenario, while simultaneously increasing local government employment by 874 and state government employment by 257 during the 2018-19 biennium relative to the baseline scenario.


Source Agencies:
LBB Staff:
UP, KK, SD