From the Fiscal Size-Up: Four methods of finance

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The Legislature uses four methods of finance to appropriate funds to state agencies and public institutions of higher education: General Revenue Funds, General Revenue– Dedicated Funds, Federal Funds, and Other Funds.

• General Revenue Funds include the nondedicated portion of the General Revenue Fund, which is the state’s primary operating fund. General Revenue Funds also include the Available School Fund, the State Instructional Materials Fund, and the Foundation School Fund;

• General Revenue–Dedicated Funds include approximately 200 accounts within the General Revenue Fund that are dedicated for specific purposes by statute or by the funds-consolidation process. For example, Account No. 151, Clean Air, is funded primarily through a portion of motor vehicle inspection fees and a portion of air pollution control fees. These Account No. 151 revenues are statutorily dedicated to the Texas Commission on Environmental Quality to provide funding for various air quality, monitoring, and permitting programs;

• Federal Funds include grants, allocations, payments, or reimbursements received from the federal government by state agencies and institutions. Th e largest portion of federal funding appropriations is for the Medicaid program in Article II. Other examples of Federal Funds appropriations include the Title I Grants to Local Educational Agencies, National School Lunch Program, Transportation Grants and National Highway System Funding, Special Education Basic State Grants, and the Children’s Health Insurance Program; and

• Other Funds consist of any funds that are not included in the General Revenue Fund (dedicated or not) or Federal Funds. Examples of Other Funds include the State Highway Fund, the Texas Mobility Fund, the Property Tax Relief Fund, the Economic Stabilization Fund, trust