Secretary of State
Summary of Recommendations - Senate

Page I-92
David Whitley, Secretary of State
John Montgomery, LBB Analyst

Section 1
Historical Funding Levels (Millions)
$60.0

$49.6

$50.0

Method of Financing
General Revenue Funds
GR Dedicated Funds
Total GR-Related Funds

2018-19
Base
$43,885,038
$772,280
$44,657,318

2020-21
Recommended
$41,440,023
$313,000
$41,753,023

Biennial
Change ($)
($2,445,015)
($459,280)
($2,904,295)

Biennial
Change (%)
(5.6%)
(59.5%)
(6.5%)

Federal Funds
Other

$7,607,674
$15,824,174

$15,781,229
$16,169,000

$8,173,555
$344,826

107.4%
2.2%

All Funds

$68,089,166

$73,703,252

$5,614,086

8.2%

$42.2
$40.0

$25.9

$30.0
$20.0

$32.3

$30.2

$19.1

$10.0

$12.4

$8.9

$24.1

$11.6

$0.0
2017
Expended

2018
Estimated

2019
Budgeted
All Funds

2020
Recommended

2021
Recommended

GR/GR-D

Historical Full-Time-Equivalent Employees (FTEs)

FTEs

FY 2019
Budgeted
203.0

FY 2021
Recommended
203.0

Biennial
Change
0.0

Percent
Change
0.0%

210.0
205.0

203.0

205.0

203.0

203.0

200.0

203.0

203.0

195.0
190.0
185.0
180.0

183.5

175.0

175.6

170.0
165.0
160.0
2017
Expended

2018
Estimated
FTE Cap

2019
Budgeted

2020
Recommended

2021
Recommended

Actual FTEs

The bill pattern for this agency (2020-21 Recommended) represents an estimated 100% of the agency's estimated total available funds for the 2020-21 biennium.

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1

 Secretary of State
Summary of Funding Changes and Recommendations - Senate
Funding Changes and Recommendations for the 2020-21 Biennium
compared to the 2018-19 Base Spending Level (in millions)

General
Revenue

GR-Dedicated

Section 2

Federal
Funds

Other Funds

All Funds

Strategy in
Appendix A

SIGNIFICANT Funding Changes and Recommendations (each issue is explained in Section 3 and additional details are provided in Appendix A):
A)
B)

Increase in General Revenue to provide a 5 percent state match and increase in Federal Funds due
to a 2018 Help America Vote Act (HAVA) grant award.
Decrease in GR-D 5095 Election Improvement Fund due to diminishing interest earned on orginal
HAVA grant.

$1.2

$0.0

$8.2

$0.0

$9.3

B.1.4.

$0.0

($0.5)

$0.0

$0.0

($0.5)

B.1.4.

($3.6)

$0.0

$0.0

$0.0

($3.6)

B.1.2.

$0.0

$0.0

$0.0

$0.3

$0.3

A.1.1.

($2.4)

($0.5)

$8.2

$0.3

$5.6

As Listed

SIGNIFICANT & OTHER Funding Increases

$1.2

$0.0

$8.2

$0.3

$9.7

As Listed

SIGNIFICANT & OTHER Funding Decreases

($3.6)

($0.5)

$0.0

$0.0

($4.1)

As Listed

OTHER Funding Changes and Recommendations (these issues are not addressed in Section 3 but details are provided in Appendix A):

C)
D)

Decrease in General Revenue funds for Primary Election reimbursements to counties due to 201617 unexpended and unobligated balances carried into 2018-19.
Increase in Appropriated Receipts due to collections of business filing and document publishing fees
above appropriated amounts.

TOTAL SIGNIFICANT & OTHER Funding Changes and Recommendations (in millions)

NOTE: Totals may not sum due to rounding.

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 Section 3
Secretary of State
Selected Fiscal and Policy Issues - Senate

Recommendations include $1.16 million in General Revenue to provide a 5% state match
toward a $23.3 million HAVA grant awarded to Texas in May of 2018. The match must
be made available within 2 years of the grant receipt, and the SOS has submitted a new
spending proposal to the United States Elections Assistance Commission. In authorizing the
Consolidated Appropriations Act of 2018, Congress specified that the 2018 HAVA funding
should be directed towards improving security and increasing the auditability of federal
elections. The SOS has set up an agreement to leverage Department of Information
Resources cooperative purchasing programs to provide comprehensive security assessments
to Texas counties with the 2018 HAVA grant.

GR-D 5095 Election Improvement Fund
Fiscal Years 2004 to 2018

HAVA Grants
Remaining Balance
$200
$180

$160
$140
$120
$100
$80

Millions

1. Help America Vote Act (HAVA) 2018 Federal Funding.
The original Help America Vote Act (HAVA) was passed by the United States Congress in
2002 in order to assist states with improving federal elections administration. HAVA funds
can be used as reimbursements for grants to counties (65-75 percent), voter education
(5-10 percent), state plan administration (2-5 percent), and the statewide voter
registration system (10-20 percent).

$60
$40
$20
$0
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

The Texas Election Administration Management (TEAM) system is the agency’s federally-mandated electronic voter registration database which was funded by the
original HAVA grant. Not included in the recommendations is $1.9 million in General Revenue to continue TEAM maintenance in the 2020-21 biennium. TEAM
maintenance has been paid out of GR-D 5095 Election Improvement Fund from interest earned on the original 2002 HAVA funding. This earned interest has
diminished over time, and is expected to be fully expended during the 2018-19 biennium.
2. Benefits In Proportion to Methods of Finance.
Article IX, Section 6.08 Benefits Paid Proportional by Method of Finance requires that agencies shall pay benefits proportional to their methods of finance to better
align the funding sources for salaries and benefits. Prior to the 2018-19 biennium, SOS paid salaries from Appropriated Receipts earned through Strategy A.1.1.
Document Filing and paid for associated benefits with General Revenue. The Comptroller of Public Accounts has since corrected this practice, and the SOS contends
that the change removes revenue needed to continue cost recovery operations. Not included in the recommendations is $2.9 million in General Revenue for 2020-21
to replace Appropriated Receipts benefits payments for the Document Filing strategy.
3. Voter Education Related to Voter Identification.
For fiscal years 2016-17 and 2018-19 the agency was appropriated $4.0 million in General Revenue to educate the public regarding the required documents for
voting and the general voting process. Recommendations continue this level of funding for the 2020-21 biennium.
SOS first launched a Voter Education Campaign in 2006 funded by the Help America Vote Act (HAVA) of 2002. SOS has continued the program for every federal
election cycle since 2006 with the amount of campaigns being incrementally decreased due to decreasing federal funds. With the passage of voter identification
requirements, the 82nd Legislature added a rider related to Senate Bill 14: Contingency Appropriation for Voter Education: Related to Voter Identification. The
agency was appropriated $2.02 million in GR-D 5095 (interest from 2002 HAVA federal funds) in fiscal year 2012-13 and 2014-15.

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 Section 3
4. Document Filing Revenue Collections. The SOS is the primary repository for statutorily-required business and corporate filings, which generate revenue through
designated fees. The agency manages these transactions through the Business Entity Secured Transaction (BEST) system, which was put into place as a document
management system in 2001 and has been expanded to include financial management. The agency's financial and information technology practices, including
document filing and revenue collection, were the subject of a State Auditor's Office (SAO) report issued in January of 2019.
Similar to SAO findings in 2005, the January 2019 SAO report found numerous inconsistencies in the SOS' internal accounting and use of BEST. One example is the
SOS' inability to reconcile its revenue collections against the Texas Comptroller of Public Accounts' (CPA) Uniform Statewide Accounting System (USAS). State
auditors discovered in May of 2018 that the BEST system's overall recorded revenue was $2.4 million lower than what was found in USAS. The SOS' internal
financial management policies are insufficient to determine the origin of this revenue discrepancy.
In its response to the SAO findings, the agency asserts that the BEST system will need to be replaced in order to provide stronger financial controls. The SOS is in the
early stages of formulating a BEST replacement strategy, and may request additional planning funding for the 2020-21 biennium. After this initial planning period,
the SOS predicts that funding for a full BEST replacement will be requested from the 87th Legislature for the 2022-23 biennium.

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 Section 4
Secretary of State
Rider Highlights - Senate
Modification of Existing Riders
9. Senate Bill 14: Contingency Appropriation for Voter Education: Related to Voter Identification. Recommendations revise this rider to remove the contingency and
legislative intent language in response to the United States Court of Appeals for the Fifth Circuit dismissal of remaining claims against Texas’ voter identification
laws in September of 2018.
New Riders
15. 2018 Help America Vote Act State Matching Funds. Recommendations add a new rider which would require that $1,162,630 in General Revenue in strategy
B.1.4 Elections Improvement be used during the 2020-21 biennium as a five percent state match toward the federal Help America Vote Act (HAVA) elections
security grant received in 2018.
Deleted Riders
15. TEAM Voter Registration System Maintenance. Recommendations delete this rider which specifies that $300,000 in General Revenue for fiscal year 2019 shall be
used to supplement the diminishing balance of General Revenue Dedicated 5095 Election Improvement Fund used for the maintenance of the Texas Election
Administration Management (TEAM) system.

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 Secretary of State
Items Not Included in Recommendations - Senate

Section 5

2020-21 Biennial Total
GR & GR-D

All Funds

FTEs

Information
Technology
Involved?

Contracting
Involved?

Estimated
Continued Cost
2022-23

Agency Exceptional Items Not Included (in agency priority order)
1)
2)
3)
4)
5)
6)
7)
8)

Restoration of General Revenue base funding for county primary election reimbursements.
General Revenue to plan a replacement of the Business Entity Secured Transaction System.
General Revenue to replace Appropriated Receipts to pay for benefits proportionality.
Appropriated Reciepts authority to replace obsolete PCs, laptops, and printers purchased in
2015.
General Revenue for ongoing maintenance of the federally-required Texas Elections
Administration Management System.
General Revenue and two temporary employees to facilitate CAPPS implementation.
General Revenue to facilitate county election security training, including repurposing four field
staff for dedicated security training.
General Revenue to increase county primary election poll worker reimbursement from $8/hr to
$12/hr.

$3,607,245
$500,000
$2,850,000

$3,607,245
$500,000
$2,850,000

0.0
0.0
0.0

No
Yes
No

No
Yes
No

$0
Unknown
$2,850,000

$0

$300,000

0.0

Yes

No

$0

$1,900,000

$1,900,000

0.0

Yes

Yes

$3,006,610

$200,000

$200,000

2.0

No

No

$0

$1,400,000

$1,400,000

0.0

No

No

$1,400,000

$3,000,000

$3,000,000

0.0

No

No

$3,000,000

$0

$0

0.0

No

No

$0

$12,957,645

$9,650,000

2.0

Agency Requested Rider Revisions Not Included
9)

New Rider to authorize the transfer of Strategy A.1.1. unexpended balances between biennia.

TOTAL Items Not Included in Recommendations

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 Secretary of State
Appendices - Senate
Table of Contents
Appendix

Appendix Title

Page

A

Funding Changes and Recommendations by Strategy

8

B

Summary of Federal Funds

*

C

FTE Highlights

10

D

Performance Measure Highlights

11

E

Summary of Ten Percent Biennial Base Reduction Options

12

`

* Appendix is not included - no significant information to report

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 Appendix A

Secretary of State
Funding Changes and Recommendations - Senate, by Strategy -- ALL FUNDS

Agency 307

Strategy/Goal

2018-19
Base

2020-21
Recommended

Biennial
Change

DOCUMENT FILING A.1.1

$14,542,832

$15,154,196

$611,364

DOCUMENT PUBLISHING A.2.1

$927,304

$911,300

($16,004)

Total, Goal A, INFORMATION MANAGEMENT

$15,470,136

$16,065,496

$595,360

ELECTIONS ADMINISTRATION B.1.1

$8,555,022

$8,449,700

($105,322)

(1.2%) Recommendations reflect:
1) A decrease of $327,148 in General Revenue due to a reallocation to Strategy
A.1.1. in response to lower travel expenses for election inspectors; and
2) An increase of $221,826 in Appropriated Receipts to cover the distribution of
county-specific voter registration cards.

PRIMARY FUNDING/VR POSTAGE B.1.2

$15,911,666

$12,540,355

($3,371,311)

(21.2%) Recommendations reflect:
1) A decrease of $3,607,645 in General Revenue due to the removal of 2016-17
unexpended primary election grant balances from the agency's base request; and
2) An increase of $236,334 in General Revenue due to increasing postage costs
and salary equity adjustments for three positions.

CONSTITUTIONAL AMENDMENTS B.1.3

$1,182,649

$1,238,000

$55,351

1/17/2019

%
Change

Comments

4.2% Recommendations reflect an increase of $348,364 in General Revenue and
$263,000 in Appropriated Receipts due to reallocations from Strategies B.1.1.
Elections Administration and D.1.1. Indirect Administration to fill seven vacant
positions, provide for digitization of paper records, and to cover an increase in
benefits costs.
(1.7%) Recommendations reflect:
1) A decrease of $41,004 in General Revenue to balance postage cost estimates
in other strategies; and
2) An increase of $25,000 in Appropriated Receipts due to a reallocation of funds
from Strategy A.1.1. for agency operating expenses.
3.8%

4.7% Recommendations reflect an increase of $55,351 in General Revenue due to
increased newspaper advertising costs and postage expenses.

8

 Appendix A

Secretary of State
Funding Changes and Recommendations - Senate, by Strategy -- ALL FUNDS

Agency 307

Strategy/Goal
ELECTIONS IMPROVEMENT B.1.4

2018-19
Base
$8,379,954

2020-21
Recommended
$17,256,859

Biennial
Change
$8,876,905

FINANCING VOTER REGISTRATION B.1.5
Total, Goal B, ADMINISTER ELECTION LAWS

$5,777,500
$39,806,791

$5,777,500
$45,262,414

$0
$5,455,623

PROTOCOL/BORDER AFFAIRS C.1.1

$547,326

$561,212

$13,886

COLONIAS INITIATIVES C.1.2
Total, Goal C, INTERNATIONAL PROTOCOL

$0
$547,326

$0
$561,212

$0
$13,886

INDIRECT ADMINISTRATION D.1.1

$12,264,913

$11,814,130

($450,783)

Total, Goal D, INDIRECT ADMINISTRATION

$12,264,913

$11,814,130

($450,783)

Grand Total, All Strategies

$68,089,166

$73,703,252

$5,614,086

1/17/2019

%
Change
Comments
105.9% Recommendation reflect:
1) An increase of $8,173,555 in Federal Funds due to the receipt of a 2018 Help
America Vote Act (HAVA) grant payment;
2) An increase of $1,162,630 in General Revenue to provide a 5 percent state
match toward the 2018 HAVA grant; and
3) A decrease of $459,280 in GR-D 5095 Election Improvement Fund due to
diminished availability of original 2002 HAVA grant earned interest (See Section
3, Item 1).
0.0%
13.7%
2.5% Recommendations reflect an increase of $13,886 in General Revenue due to
increased executive travel expenses.
0.0%
2.5%
(3.7%) Recommendations reflect a decrease of $285,783 in General Revenue and
$165,000 in Appropriated Receipts due to a reallocation of funds to Strategy
A.1.1. to cover the payment of benefits in proportion to methods of finance (See
Section 3, item 2).
(3.7%)
8.2%

9

 Secretary of State
FTE Highlights - Senate

Appendix C

Expended
2017

Estimated
2018

Budgeted
2019

Recommended
2020

Recommended
2021

Cap

203.0

205.0

203.0

203.0

203.0

Actual/Budgeted

183.5

185.0

203.0

NA

NA

$132,924

$132,924

$197,415

$197,415

$197,415

Full-Time-Equivalent Positions

Schedule of Exempt Positions (Cap)
Secretary of State (Group 5)

Notes:
a) In a letter dated December 8, 2018, the Governor authorized a salary of $197,415 for the Secretary of State effective December 18, 2018. This increase was
authorized pursuant to Article IX, Section 3.04(b)(3), SB 1, 85th Legislature, Regular Session.
b) The SOS attributes ongoing FTE lapses to high turnover rates among staff. These are driven by retirements, as well as employees leaving for higher paying positions in
other state agencies.
c) All funding for SOS Strategy C.1.2. Colonias Initiatives was vetoed as part of the Governor's Veto Proclamation of parts of SB 1, 85th Legislature, Regular Session,
2017. 7.0 FTEs were associated with the funding for this strategy, but were not included in the veto proclamation. Recommendations do not include $1.4 million in
General Revenue to repurpose 4.0 of the 7.0 FTEs for statewide county election security training (see Section 5, item 5).

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 Secretary of State
Performance Measure Highlights - Senate

•

Number of Requests for Information and Filings Processed

Expended
2017
5,959,700

Appendix D

Estimated
2018
6,424,746

Budgeted
2019
6,250,000

Recommended
2020
6,250,000

Recommended
2021
6,250,000

Measure Explanation: The SOS processes statutory filings, including items related to businesses, and responds to external inquiries for information. Demand is driven by external
•

Number of Election Officials Assisted or Advised

182,327

259,545

155,000

235,000

155,000

Measure Explanation: The SOS provides guidance to county and local election officials on the proper conduct of elections, including current Voter ID requirements. The 2018-19 GAA
•

Number of Constitutional Amendment Translations Mailed

0

2,054,937

0

2,054,937

0

Measure Explanation: The SOS is required to report the number of Spanish language translations of proposed amendments to the Texas Constitution mailed to households with

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 Secretary of State
Summary of Ten Percent Biennial Base Reduction Options Recommendations - Senate

Appendix E

Biennial Reduction Amounts

Priority

1)

2)

3)

4)

Item

Description/Impact

GR & GR-D

Voter Registration Grants to County
Registrars

Texas Election Code Section 19.002 requires the agency to issue grant payments
to county voter registrars. To achieve this budget reduction, the statutory
reimbursement rates would have to be reduced to by approximately 10 percent.

Primary Election Grants to County Political
Parties

Election Code Section 173.001 authorizes the agency to reimburse county political
parties for the cost of holding primary elections, subject to the availability of
appropriations. Statute also authorizes the agency to adopt rules to reduce the
cost of primary elections, and grants discretion in the payment of reimbursements.
The agency reports distributing $13.2 million in such reimbursements during fiscal
year 2018.

FTEs

$1,062,631

$1,062,631

0.0

$0

$834,924

$834,924

0.0

Operating Expenses

According to the agency, the following reductions would impact its ability to serve
elections, business, and legal customers: Travel expenses by approximately
$35,000; Postage/printing/consumables by approximately $181,950; Computer
software and technology licenses by approximately $112,500; and merit pay and
temporary employment opportunities by approximately $911,632.

$1,241,082

$1,241,082

Administrative and Support FTE

The reduction of 8 FTEs in the agency's administrative and support operations.
According to the agency, these reductions would decrease the number of
documents that can be filed, increase document turnaround time, impede the
creation of new business entities, and slow collection and deposits of revenue.

$1,249,867

$4,388,504

TOTAL, 10% Reduction Options

Agency 307

All Funds

Reduction as
% of
Potential
Program
Revenue Loss
GR/GR-D
Total

1/17/2019

18%

Program
GR/GR-D
Total

Included in
Introduced
Bill?

$5,777,500

No

$0

6% $15,000,000

No

0.0

$0

4% $30,541,972

No

$1,249,867

8.0

$0

7% $18,117,996

No

$4,388,504

8.0

$0

12