Incoming Texas House speaker discusses priorities amid pandemic as state faces $1B deficit

AUSTIN, Texas -- Presumptive Texas House Speaker Dade Phelan on Monday detailed what legislating during the coronavirus pandemic may look like this year and how lawmakers plan to balance their agendas with the ongoing public health crisis, saying “we’re gonna take it a day at a time, a week at a time, a month at a time.”

Phelan, a Beaumont Republican, spoke with the Texas Tribune in a virtual interview the day before the Legislature is set to gavel in for its 2021 session. One of the House’s first orders of business Tuesday will be to elect Phelan as speaker after he secured enough pledged support from his colleagues this fall to assume the position.

Lawmakers are coming back to the Capitol at a moment when spread of the virus has never been worse in Texas. More than 13,000 patients with Covid-19 are hospitalized and the seven-day rolling average for daily new cases in Texas is more than 23,000.

The economic damage in Texas from the coronavirus pandemic has left a nearly $1 billion deficit in the state budget as the nation’s energy capital remains hampered by a slow recovery and a half-million fewer jobs than a year ago.

The forecast Monday by state officials is far brighter than bleaker projections last summer, when Republican Comptroller Glenn Hegar estimated that the shortfall could be four times as worse. Still, the deficit could result in cuts to state services as the GOP-controlled Legislature returns to work Tuesday.

Phelan acknowledged the challenges lawmakers will face this year with writing the state budget. But he declined to say what would be off the table in terms of potential budget cuts, saying lawmakers will “have to look at everything.”

“There’s no article [in the budget] that you don’t go through with a fine-tooth comb,” he said. “That’s your job.”

Phelan also cast doubt on the possibility of creating new revenue sources to help offset the projected budget shortfalls.

“I don’t see new taxes or fees being acceptable to the Legislature,” Phelan said. He added that avenues such as expanding gambling or legalizing marijuana in the state — two items that have received renewed attention in recent months as the fiscal forecast has continued to come into focus — would not impact the current budget cycle. Setting up systems in the state after those moves would take time, he said, so new revenue created by them would not help the current two-year budget or the next one.

“To think you can plug and play on either of those, it’s not factual,” he said.

Hegar said the hospitality sector has been hardest-hit during the pandemic. He said a rebound in oil prices and production substantially improved the economic outlook in Texas from just a few months ago.

Many economists say that once coronavirus vaccines are more widely distributed, a broader recovery should take hold in the second half of the year.

Phelan said the pandemic “has also put a highlighter” on other public health issues that were already on lawmakers’ radars, such as expanding telemedicine and telehealth and “improving rural health care options for Texans.”

Asked about the state-federal health insurance program Medicaid, which Republicans in Texas have long resisted expanding, Phelan said he did not “think the votes are there” for such an action — but suggested lawmakers could “have a robust discussion about improvements behind Medicaid, a Texas solution to Medicaid, one that is revenue-neutral.”