Last week both the House and the Senate filed the introductory versions of the state budget for the next biennium. This week I will talk about the appropriations process, and how the legislature develops the budget. The budget, also called the appropriations bill, is either given the designation Senate Bill 1 or House Bill 1, depending on in which chamber it originates. The chamber of origination alternates from biennium to biennium. This biennium, the budget originates in the Senate, and is Senate Bill 1. However, both chambers’ budget committees begin working simultaneously on the budget in order to speed up the process, and last week the House also filed its version of the budget, HB 1.

The state constitution requires that spending cannot exceed the revenue estimate for the upcoming biennium. The Biennial Revenue Estimate is issued by the Comptroller and is an estimate of the funds the state will have over the next two years. Unlike the federal government, the state cannot run a deficit. There is also a spending cap, which dictates the rate of growth of appropriations in a biennium from state tax revenues not dedicated by the constitution may not exceed the estimated rate of growth of the state’s economy.

Both the Senate Committee on Finance and the House Committee on Appropriations, the committees in each chamber that consider the budget, generally break up into smaller groups, called subcommittees. Subcommittees focus on a particular area, or “article,” of the budget. After holding numerous hearings, these subcommittees make specific recommendations pertaining the articles that they are charged with overseeing, and together they form the budget that is passed out of each respective committee. This year Senator Jane Nelson, who chairs the Senate Finance Committee, created two workgroups to examine the areas of spending that make up a majority of the state’s budget: public education finance and health care spending. Since it is very early in the session, committee hearings in the House have not yet gotten underway. The Senate however held its first round of hearings on SB 1 this week.

Once the Senate passes its version of the budget, SB 1 will go to the House Appropriations Committee for consideration, then to a vote before the full body. After the appropriations bill has been passed by each chamber, a conference committee is appointed to reconcile the differences between the two versions passed by the House and Senate. The reconciled bill is then voted on by members of each chamber for final passage. No changes to the bill are able to be made at that time.

Larry Phillips of Sherman represents District 62 in the Texas House of Representatives. His telephone number in Sherman is 903-891-7297. His telephone number in Austin is 512-463-0297. His address in Austin is P.O. Box 2910, Austin, TX 78768-2910. His email address is