Last Week in the Legislature

Off and Running – 2023 Legislative Session Begins 

By Kenneth Besserman
Director of Government Affairs and Special Counsel

January 17, 2023 | Issue 1

AUSTIN - All eyes turned to the Capitol on January 10, 2023, as the 88th Texas Legislative Session began. After a long day of swearings-in, ceremonies and speeches, the real work of passing bills and debating issues will soon begin. 

The primary issue on the agenda in the House of Representatives on the first day of the session was the election of the Speaker of the House. The election of Representative Dade Phelan as Speaker of the House was a foregone conclusion, but the central question was whether some very conservative members of the House would contest the election. As it turned out, Rep. Tony Tinderholt (R-Arlington) was the only other candidate for House Speaker and he was only able to muster three votes in his favor. With Speaker Phelan elected for his second term as Speaker of the House (by a vote of 145-3), all attention turned to the House Rules. 

New House Rules

The House Rules are the very detailed procedures that address how the Texas House operates and how legislation moves through the House. These rules and processes are very important because both parties and all members can use these rules to advance or stall legislation. As the Texas Legislature has become more partisan in recent sessions, the debate on the House Rules has centered on punishing members for actions that one party may oppose.  

This year, much of the debate focused on punishing members of the House who “impeded House operations.” This debate focused on making sure that members of the House were punished (by admonishment, censure, fines, expulsion) if they broke a quorum and stopped the functioning of the House. This rule passed with an overwhelming majority of both parties. 

Another issue that the House debated was an attempt by many of the same very conservative members of the House who wanted to prevent the Speaker from naming Democrats to committee chairs and to interject social issues (gender, abortion) into the House Rules. All of those proposals were defeated in House votes or by points of order. While the debate on these social issues did not make it into the House Rules, it is assured that these same issues will be back as legislation, creating a lot of debate and acrimony on the House floor in the months to come. 

More Money, More Problems?

On January 9, Comptroller Glenn Hegar released the biennial revenue estimate (BRE). Legislators, state agencies, the lobby and others have all known for some time that the state had a significant surplus for the this legislative session. The BRE did not disappoint. Comptroller Hegar announced that the state had $32.7 billion left over from the 2022-23 state budget due primarily to vigorous economic growth, increased sales tax and oil and gas severance tax, and unspent COVID-19 federal relief funds. The state of Texas has never had a budget surplus this large. The legislature is in a good position to address property tax relief, infrastructure needs, health care, school finance and a myriad of other issues. 

While a large budget surplus is a good thing, it creates some significant policy and process issues for the legislature. First, spending for the 2024-2025 state budget can only increase 12 percent over the last budget because of statutory and constitutional spending limits. In order for the legislature to spend more money, they will have to take some hard votes to increase the spending cap or produce some budget gimmickry to work around the legal constraints. Secondly, budget surpluses are tough for legislators to manage. There are numerous requests for funding that legislators must balance. It is often said that legislators prefer a budget deficit because it is easier to say “no” to everyone who wants state funding. 

On January 17, Governor Greg Abbott and Lt. Governor Dan Patrick were sworn in for their four-year terms of office. Abbott, Patrick and Phelan will have much to discuss in the coming weeks and months as all have said that significant property tax relief should be centerpiece this session. What that looks like, how much relief will be provided and how sustainable it is, will be the central questions of the session. 

TXCPA will also have a proactive legislative session in 2023. We will be working on SB 159 and HB 797 (allowing students the opportunity to begin the CPA Exam after completing 120 hours of education) to help address the CPA pipeline issue. Stay tuned to this space for a lot more information about legislation we are working on and following, and how your advocacy can help TXCPA and the accounting profession. Your voice is essential. 

Other critical issues that the legislature will tackle this session include parental rights, school choice, LGBTQ issues, women’s health and border security. We will be following these issues and provide updates in Last Week in the Legislature and other outlets. 

Only 128 days left!