The End is…..Near?

Midnight Monday, May 25, 2013, was supposed to herald the end of the 83rd Legislative Session. Some described the whole session as a very long Seinfeld episode—much talk, little action. But in the waning days, it is readily apparent that this has been one of the most productive sessions, with less conflict among members, in recent memory. The litany of potentially divisive issues from past years was absent, so members were able to build trust and rapport with each other over issues of mutual concern, like public education, water availability, transportation, higher education, public safety and the state’s economy.

In addition, the large number of “freshmen” legislators proved to be an asset with their new ideas and open, innovative minds focused on problem solving. The House even instituted a “purple tie” day each Thursday to reminded Republicans (red) and Democrats (blue) that together (red + blue = purple) they worked for common outcomes for the benefit of Texans.

For UTMB, the session was not without its ups and downs since the university is subject to a multitude of funding articles in the budget and impacted by no small number of regulatory changes and Health and Human Services budgetary changes. Even Public Safety in Article V impacts UTMB since it deals with the state’s prison system. As is always the case, the real financial impact often cannot be seen until the dust settles and the effects of the myriad individual funding changes have been analyzed.  But for now, our results fall into the following general patterns related to our legislative appropriation requests:

  1. UTMB asked for growth in formula funding to support the education of our health professions workforce, to provide necessary infrastructure and to build our research infrastructure. Formula funding for the next biennium will increase by approximately $24.5 million. Overall, Chairman John Otto and others of the House Appropriations subcommittee on higher education elected to put more money into formulas to be used at the discretion of the university than to fund special projects and exceptional items as in times past.
  2. UTMB asked for a continuation of the 2012-2013 funding levels for the UTMB Hospital and Health System and for the creation of a Hospital Formula to protect us from drastic General Revenue reductions like we experienced in the last session. The House Appropriations Committee (HAC) was not inclined to create a hospital formula for UTMB at this time, even though both UT Health Science Center at Tyler and UT MD Anderson Cancer Center both have mission-based formulas. Instead, the higher education subcommittee of HAC decided to perform an interim study on that subject and take a look at all higher education and health-related education funding formulas to ensure equity among institutions. The Legislature did respond favorably to our request for an addition to our hospital base by adding $10 million for the biennium since no formula was forthcoming.
  3. Although UTMB and other Health Related Institutions requested exceptional item funding for specific research projects, the House Appropriations Committee elected to forgo those appropriations and fund formulas instead.
  4. At the close of the session, the Tuition Revenue Bond (TRB) bill was caught up in last-minute conference committee deliberations and failed to pass out of the Legislature. This will be placed on the agenda for the special session; UTMB has a $40 million request for funding of a new educational building on the Galveston UTMB campus; the request has been approved by both the House and Senate, but it has not released from conference. That means a new bill will have to find its way through the special session for this purpose. We already know that the bill filed for the special session will lower all TRB requests by 15 percent, reducing our $40 million request to $34 million. But our legislative delegation will work to achieve maximum funding, consistent with what other institutions receive.
  5. Correctional health care funding was an issue of great controversy in prior sessions. However, in the 83rd session under the new contractual arrangement with TDCJ, UTMB has been paid monthly for its provision of health care services by TDCJ so there was no need for a Supplemental Appropriations Request. Instead, the Legislature was able to focus fully on the current and future needs of the correctional health care delivery system. In the end, they agreed upon the following appropriation of $61.7 million for correctional health care funding for the 2014-15 biennium:

Total Appropriation UTMB Portion*
Adjustment to Base $30.6M $27M
Salary Adjustment $16M $12.4M
Capital $54M $4.9M
Restore Staffing $9.7M $3.8M
Total
$61.7M
$48.1M

*Remaining portion goes to Texas Tech University.

There is a host of other changes that we will discuss, but of major importance is UTMB’s continued growth in resources to finance its health care operations, research and educational programs, and community benefits programs. Looking back over the past four sessions, we see the following pattern:

Biennium Appropriation Amount
2008-2009 $457.7M
2010-2011 $566.6M1
2012-2013 $474.2M2
2014-2015 $506M3

  1. Base adjustment after Hurricane Ike; does not include $150 million in Ike matching dollars or $150 million TRB for construction of new Jennie Sealy Hospital.
  2. Reduction of 16.65 % from prior biennium mostly in GR funding reflecting large state GR reductions in higher education; not inclusive of extension of $150 million Ike match
  3. Does not include $11.4 million increase in benefits or potential TRB for educational building.

The state budget is a composite of Senate Bill 1, House Bill (HB) 1025, HB 6, HB 7 and Senate Joint Resolution (SJR) 1—and a lot of sweat equity. Overall, the state budget saw a very modest increase driven by population growth and public school enrollment growth.

  • SB 1 reflects a 3.7 % increase in overall appropriations over the last biennium.
  • SJR 1 sends to voters in November 2013, a referendum on a constitutional amendment to establish the State Water Implementation Fund.
  • HB 1025 is a supplemental bill that puts $2 billion into the water resources fund (if the voters approve SJR 1) and additional money in public education.
  • SB 7 is the fiscal management bill, which consolidates all of the budgets into one ledger.

Public education received serious attention from both parties during the 83rd session. For the state’s public schools, most would agree that this was a winning session. Most of the draconian reductions from the 82nd session were restored and, moreover, the number of end-of-course exams required to graduate from high school was reduced from 12 to 5. Standards were also changed at the high school graduation requirements allowing schools to issue three degrees based upon credit hours, acknowledging the fact that not all high school graduates will head for college.

  • SB 2 expanded the state charter school system and HB 5 changed high school testing and graduation requirements as mentioned earlier.
  • The authority for oversight of charter schools was transferred from the State Board of Education to TEA.

Higher Education

  • HB 29 requires public universities to offer incoming students a four-year, fixed-rate tuition option.
  • SB 215 renewed the authority of the Texas Higher Education Coordinating Board but with some modifications/restrictions in its authority. The bill restricted the THECB from permitting the American University of the Caribbean from sending medical students to Texas for training and changed the rules for the TEXAS Grant program.
  • SB1907 does NOT permit campus carry of concealed handguns, but it does allow CHL holders to store firearms and ammunition in locked cars on college campuses.

Criminal Justice

  • SB213 was passed to reform and reauthorize the state’s prison system, permitting TDCJ leadership to decide how best to address their capacity issues.
  • Corrections-related budget bills also provided for salary increases for correctional officers and for health care employees in the system.
  • Additional reforms expanding membership of the Correctional Managed Health Care Committee were also passed, adding four new members (two from the mental health profession and two from state medical schools). Both UTMB and Texas Tech also retrain a physician member of the committee. The committee’s scope changes to production of the Offender Health Plan and quality oversight; contracting is now the sole responsibility of TDCJ.

Health Care

  • SBs 7, 8 and 58 by Senator Jane Nelson, chair of the Senate Health and Human Services Committee, targeted Medicaid fraud, transitioning of acute and long-term care services and expansion of behavioral health services. The GOP stand against Medicaid expansion also passed in the form of an amendment to SB 7, banning coverage for low-income adults.
  • SB149 allocated another $600 million over the biennium to CPRIT after the addition of measures to better prevent conflicts of interest at the agency
  • Senator Charles Schwertner’s SB 1106 assures independent pharmacies of more transparency when negotiating rates with Medicaid managed care organizations.
  • SB 1803 and SB 1106 protect Medicaid providers’ due process rights during investigations of fraud allegations and decreases administrative burdens on providers who contract with multiple Medicaid managed care plans.
  • Scope of practice for advanced practice nurses and physician assistants was also revised to increase to level of their training while still requiring physician oversight.

Immigration

  • Bills aimed at creation of a driver’s permit for undocumented immigrants failed, as did other immigration reform measures.

Special Session

As the House and Senate adjourned Sine Die around 5 p.m. on Memorial Day—neither having completed the full book of business set out for the session—the Governor issued a call for a Special Session to begin at 6 p.m. that same day. The only item the Governor has formally placed on the agenda is the unfinished business of redistricting. The House and Senate have appointed committees to study that issue in light of prior legislative action and state and federal court comments. The Legislature will bring forth recommendations to stay with the current districts as utilized in the 2012 elections or to recommend changes. Whatever transpires is sure to be surrounded with highly charged debate.

Other issues may find their way onto the special session agenda. Senator Kel Seliger has already filed a bill for TRBs for state universities totaling almost $2.6 billion. Other issues related to transportation funding, social issues such as abortion and drug testing for Temporary Assistance for Needy Families aid recipients, may also find their way on the agenda.

June will be a busy month for those linked to the Legislature so cancel those vacations and stand alert!

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