With a significant drop in available state revenue, the 85th Legislature made tough choices to approve the one bill they must pass. Ultimately, in the final days of session, the legislature approved the 2018-19 state budget that totals $217 billion, a figure that is less than both chambers’ initial proposals.
Budget leaders from both chambers settled a bitter debate over how to finance services using two methods: taking $1 billion from the state’s savings account, known as the Rainy Day Fund, and an accounting maneuver that would defer about a $2 billion payment to the state highway fund.
The legislature agreed to spend $62.4 billion on Medicaid, about $2 billion less than what it funded in the 2016-17 budget. Lawmakers are expecting about a $1 billion Medicaid shortfall when they return for their next regular legislative session in 2019.
Hospital funding, however, went unscathed. The Texas Hospital Association helped secure level funding for enhanced Medicaid rates in the form of $307 million for certain hospitals:
- Trauma-designated hospitals: $153 million;
- Safety net hospitals: $129 million; and
- Rural hospitals: $25 million.
THA also successfully protected the state trauma account (Account 5111) and maintained level funding totaling $29 million to offset some of hospitals' uncompensated trauma care costs.
Additional information on the 2018-19 budget is available from THA’s end-of-session report.
Funding for Targeted Medicaid Rates Enhancements for Certain Hospitals and for Uncompensated Trauma Care Costs (in Millions)