Senator Carona's Email Update
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October 6, 2006

What's new . . .

At its September meeting, the State Board of Education gave preliminary approval to rules implementing the new law requiring high school students to take four years of math and science. The rules included an increase in the number of credits required to graduate from 24 to 26 for students who take the Recommended or Advanced High School Program. The board did not change the provision that allows students the option to choose to follow the less rigorous minimum plan, with parental permission, which only requires 22 credits to graduate. A final vote will be taken at the November board meeting. The board decided to increase the credits required for graduation to ensure that the additional math and science course requirements were not at the expense of electives. Among the classes that will fulfill the new math and science requirement are algebra, algebra II, geometry, any other upper level math course, biology, chemistry, physics, and one other lab-based class.

The Texas Task Force on Appraisal Reform held its first hearing in Austin on Friday, September 8. In his opening remarks to the committee, Governor Rick Perry, who created the Task Force to examine and propose solutions to skyrocketing appraisals, said he sees appraisal reform as an issue that goes hand in hand with tax reform. He charged the committee with developing a plan that the Legislature can pass in the upcoming session, much like the Texas Tax Reform Commission did when proposing the recently-enacted revisions to our tax system. Tom Pauken, Chairman of the Task Force, said he would like to find a balance between protecting taxpayers and ensuring local governments will still be able to deliver essential services. The committee is now holding public hearings around the state with a Dallas hearing to be held on November 15, at a time and place to be determined.

On October 1, the sales tax on private used car sales (those not purchased through dealerships) became based on a vehicle's "standard presumptive value." Under previous law, the 6.25% tax on used car sales was applied to the sales price as declared by the buyer. Many buyers were reporting sales prices below what they actually paid, which was cheating honest taxpayers out of millions of dollars. The tax continues to be 6.25%, but is now based on at least 80% of the retail value, which will be calculated by the county tax assessor-collector's office using nationally recognized vehicle guide books. If a buyer paid less than 80% of the vehicle's retail value, that buyer may appeal the assessed value of the car by having it appraised by a car dealer or insurance adjuster. The new law does not apply to vehicles given as a gift, which have a $10 motor vehicle tax; vehicles in an even trade, which have a $5 motor vehicle tax; salvage vehicles; abandoned vehicles; vehicles sold through storage or mechanic's liens; and vehicles eligible for classic car and classic truck license plates. To check the retail value of your vehicle online, click here.

House and Senate committees continue to hold hearings on their interim charges and are working to complete their interim reports. These hearings and reports will likely form the basis for a substantial amount of legislation in the upcoming regular session. The Senate Finance Committee has also begun holding preliminary hearings on the state's budget. For more on the budget process, see this month's Focus.

Focus . . .

This month's Focus is on the initial stages of the state's budget writing process. The appropriations bill is the only bill the Legislature is required to pass during each regular session, and since the Legislature convenes for a regular session every two years, it is a biennial (two-year) budget. Some states meet for a regular session every two years, and a budget only session other years. Beyond simply appropriating money to a state agency, the budget gives the Legislature an opportunity to define the state's fiscal priorities, set performance standards and goals for state agencies, and measure each agency's effectiveness in meeting these goals and standards.

The Governor and the Legislative Budget Board (LBB) are each required to submit a preliminary budget to the Legislature at the beginning of each regular session. The LBB is a ten-member board co-chaired by the Speaker of the House and the Lt. Governor. The chairs of the House Appropriations and Ways and Means Committees, and the Senate Finance Committee serve on the LBB, along with two House members appointed by the Speaker and three Senators appointed by the Lt. Governor. To assist the LBB and Governor's Budget Office in developing their recommendations to the Legislature, each state agency and state court is required to submit a Legislative Appropriations Request.

A Legislative Appropriations Request (LAR) is the bridge between an agency's strategic plan and the budget. These were submitted to the LBB and Governor's Office in July and August of this year. The LAR reflects the agency's goals, the strategies used to reach those goals, and its effectiveness in meeting them. Funding requests in a LAR can be categorized as baseline requests and exceptional items. Baseline requests are those items seen as essential to an agency's goals and falling within the 90% threshold (discussed in the following paragraph), while exceptional items are those that are above the 90% threshold. It is important to note that an agency categorizing an item as baseline or exceptional does not assure its inclusion in the final budget.

In June, the LBB and the Governor's Office of Budget, Planning, and Policy sent a joint letter to each state agency, appellate court, state-supported institutions of higher education, and health-related institutions that are state-funded, requesting that each agency's baseline funding request be based on 90% of the previous biennium's budget. As stated in the letter, "exceptions to this 90% limitation include amounts necessary to maintain public education funding based on legislative action, satisfy debt service requirements for existing bond authorizations, maintain caseloads for federal entitlement services, and maintain adult prison populations." While it is doubtful that the Legislature will reduce each agency's funding by 10%, such instructions give the agencies an opportunity to show the Legislature which programs are essential to their core functions.

Upon receiving each agency's LAR, the LBB and the Governor's Budget Office hold joint hearings, at which each agency gives an overview of their LAR and defends the inclusion or exclusion of certain programs from the LAR. These hearings also give agencies an opportunity to answer any questions a legislator may have concerning that agency's LAR.

The LBB and the Governor's Budget Office use the LARs and subsequent hearings to develop budget recommendations for the Legislature, which they submit at the beginning of each regular session. The Governor submits a detailed budget proposal, while the LBB submits budget recommendations. These two documents reflect the priorities of each office and may have many differences. The Legislature uses these recommendations as a starting point as they begin writing the budget. At this point, the appropriations bill goes through the legislative process, just as any other bill would.

Also at the beginning of the regular session, the Comptroller releases the official estimate of how much general revenue is available to the state for the biennium. The Legislature cannot appropriate more general revenue than what the Comptroller estimates is available. Once the budget has been written, the Comptroller must certify that the revenue called for in the budget will be available before it can go into effect.

Did You Know . . . ?

For those traveling our state's highways, the Texas Department of Transportation has a map of highway rest areas available on their website. Texas currently has 90 rest areas. The first one was built in 1936 and it provided shaded tables and benches for travelers. A major effort to renovate the state's rest areas has been ongoing since April 1999.

Like many other devices along the roadway, rest areas exist to reduce accidents. A rested driver is alert and has the ability to react to some of the inherent risks involved in operating a vehicle. Studies show that fatigued drivers are involved in an alarming percentage of serious accidents.

Student Opportunities...

The National Aeronautics and Space Administration (NASA) sponsors an annual program, Texas Aerospace Scholars, an education program that offers high school juniors the opportunity to participate in a science-, math-, and engineering-based online learning program, and features an all-expenses paid, week-long summer residential experience at the Johnson Space Center in Houston. Students are recommended for the program by their state legislator. Eligible students are required to meet the following criteria:

As a State Senator, I can place two qualified students in the program and one alternate. However, I will forward all complete applications for qualified students to the Texas Aerospace Scholars program for consideration. For more information, visit the Aerospace Scholars website, or you can download an application. Submit your completed application to my office no later than November 6, 2006. Mail your application to my Austin office at P.O. Box 12068, Austin, Texas 78711.

In Closing . . .

I hope that you have the opportunity to enjoy the great State Fair of Texas, running through October 22, 2006. And then early voting for the November general election begins October 23rd.


John Carona
State Senator - District 16