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Texans Get Peek at Spending Wish-List for COVID Recovery Funds

- $16.3 Billion for Texas in Biden’s American Rescue Plan Act

State lawmakers this week revealed a dozen different ways they’d like to spend the remaining $16.3 billion in federal funds the state received through President Joe Biden’s American Rescue Plan Act (ARPA) which Congress approved in January.

Under at least one plan laid out in the Texas Senate, businesses get the biggest slice of the pie, with $7.2 billion dedicated to replenishing the Unemployment Compensation Fund which will avert an increase in the unemployment tax rate. The fund – which critics say had long been deliberately underfunded to benefit businesses – was depleted by pandemic-related layoffs.

The state is claiming the next biggest slice for itself, totaling more than $4.4 billion. 

Of that, $3.7 billion would cover salaries and benefits for state employees directly working on pandemic response.  Because the state does not appear to have engaged in a hiring program for workers focused on pandemic response, this funding likely supplants the state’s own spending already budgeted, leaving the state with a one-time surplus of state tax dollars to be used however lawmakers desire.

The state already has about $12 billion in its Economic Stabilization Fund, commonly referred to as the Rainy Day Fund.

About one-third of the remaining $737 million in this pot of money, listed below, also supplants spending that state lawmakers already had approved:

  • $300 million to be used for a new State Operations Center to “aid the state in disaster response”, presumably a state-of-the-art facility to replace the current bunker underneath DPS headquarters in Austin,
  • $200 million to bolster cybersecurity, after allocating $17 million to this purpose in the first special session this summer, and
  • $237.8 million to complete construction of a new state psychiatric hospital in Dallas.

Third on the list is $3 billion for hospital surge staffing, the purchase of therapeutic drugs and support of regional infusion centers.

Another $160 million would be directed to organizations serving sexual assault survivors and other crime victims, a move that many capitol observers suggest is tied to Governor Abbott’s recent vow to “eliminate all rapists from the streets.”

Three different items command the remaining $500 million as follows:

  • $286 million to the Teacher Retirement System to cover COVID-related health claims,
  • $113 million to the Texas Child Mental Health Care Consortium to expand mental health treatment services for Texas youth struggling with depression and thoughts of suicide, and
  • $100 million to the state’s food banks which continue to serve higher numbers of Texans in need than before the onset of COVID.

House lawmakers also get a say in the appropriations of ARPA funds, and their numbers track the Senate’s very closely.

They propose reserving $300 million less for state employees directly working on pandemic response and, instead, divvying up that amount equally on certain programs administered by the Attorney General, court fee shortfalls and monoclonal antibody treatment for COVID.

Appropriation of the funds will likely be postponed until lawmakers approve the redistricting maps for the Legislature, Congress and State Board of Education.

Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.

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