AUSTIN (KXAN) — In a letter obtained by KXAN, Senate Finance Chair Jane Nelson, R-Flower Mound, asked Attorney General Ken Paxton’s office to weigh in on delaying $2.5 billion in state highway funds until the next budget. The decision could dramatically impact what lawmakers do with the state budget.
Sen. Nelson asked, “Would a delay in making each fiscal year deposit to the state highway… until September of the following fiscal year violate that constitutional provision?”
In 2015, lawmakers decided to dedicate $2.5 billion a year to Texas highways. Voters overwhelmingly approved of the measure by a constitutional vote. But the fiscal situation is drastically different now.
Comptroller Glen Hegar announced in January that lawmakers would be in a $6 billion to $8 billion shortfall. The House wants to tap around 25 percent of the $10 billion rainy day fund. The Senate wants to delay $2.5 billion of that highway funding one day, but that one day is important because it would technically be the following fiscal year, freeing up that money for this budget.
Sen. Nelson attached correspondence with Comptroller Hegar who said the flexibility would allow him to collect money from taxes for the entire month of August. The fiscal year begins in September.
“That approach would be consistent with the recognized definitions of net revenue and historical monthly sales tax administration by his office,” wrote Hegar.
The Texas House of Representatives are skeptical. Earlier Speaker of the House Joe Straus, R-San Antonio, compared the Senate’s idea as the criminal actions that led to the Enron Corporation going bankrupt, thinking it was counting money twice.
The House just passed their budget by tapping $2.5 billion from the rainy day fund. Each chamber will now pick five negotiators to iron out the difference. The opinion from the attorney general would make the Senate’s idea more plausible and could play a major role in the conversations to come.
The request for opinion was asked to be expedited in order to impact current negotiations.