Senate passes budget

The good news is that the budget presented by the Senate isn't a big step backwards, which was a real concern given the bleak financial picture and the huge obligation of the property tax cuts, which we continue to be unable to fully pay for. As we know, we have the federal stimulus funding to thank for all of this. The bad news is that the Senate budget is not a step forward either, and it's not clear that much of those federal dollars will be used in a way that's actually stimulative.

As it stands, the budget proposal would increase funding for college aid, but not nearly enough to cover all students eligible for Texas grants. It would increase money for human services, but it wouldn't expand eligibility for the Children's Health Insurance Program.

Among spending highlights, it would pour more money into community services for people with disabilities.

Public schools would get a boost, with some funding tied to separate finance system reforms. Universities and health-related institutions would get an increase.

Correctional officers would get pay raises, and a teacher incentive pay program would get an infusion.

The proposal also would increase funding for regulatory agencies to ensure they can properly do their jobs, a move budget-writers advocated because they said insufficient oversight contributed to national economic problems.

Budget supporters also addressed the controversial question of funding for embryonic stem-cell research. Before the Senate's 26-5 vote approval, Senate Finance Committee Chairman Steve Ogden clarified that his proposal only would prohibit money appropriated by the state budget from being used directly for research that involves the destruction of a human embryo. It would not ban such research.

Overall, the budget sought to balance spending on crucial services and saving for expected harder times to come. Backers said the budget makes progress and critics said it doesn't go far enough to address critical needs.

There also were questions over whether the budget properly uses nearly $11 billion in stimulus funding for the fiscal period that starts Sept. 1.

About half of the stimulus money would substitute for state funds that otherwise would be needed. That raised questions because the proposal leaves untouched a state savings account known as the rainy day fund. That account is expected to grow to $9.1 billion in a couple of years.

I have some sympathy for Ogden's position about not spending the money in the rainy day fund, given that sales tax revenues being collected now will be the basis of the next budget. Given how awful I thought this budget was going to be when the session first began, I almost feel a sense of relief at the way it has turned out so far. On the other hand, given how reluctant a lot of Republicans were to dip into the rainy day fund for just about everything, even hurricane relief, before we knew there would be enough federal money to cover whatever we needed, I can't say I have much faith that we won't be in an equivalent position in two years' time, only without any assistance from DC. And I know that the top priority of the Republicans will be maintaining those irresponsible property tax cuts. I'm glad to avoid the problem for now, and I'm glad that the usual budget victims escaped mostly unscathed, but I totally understand why those five Senators (all Democrats - Ellis, Gallego, Watson, Shapleigh, and Davis) voted no.

Of course, this isn't the final word, not by a longshot. The House still has to do its thing, and then there will be a committee to reconcile the two. As noted at the end of this story, among other things that could mean the Ogden stem cell rider, which was kinda sorta clarified, could be taken out. Here's Patricia Kilday Hart on what that rider now says:

"I have recently passed around what I think might be better language" which he will substitute in conference committee, Ogden said. The revised rider would prohibit the use of state money "to directly fund embryonic stem cell research" until the state Legislature passes "legislation regulating embryonic stem cell research."

He said adding the word "directly" would mean that researchers at state universities could continue their work if it is funded by other entities. Opponents of the original rider had been concerned that embryonic stem cell researchers would no longer be able to work in state-supported institutions.

The process by which that rider made it into the budget in the first place was still lousy. I do hope it winds up on the cutting room floor.

One last issue with the budget has to do with money for the Frew settlement. Here's Kilday Hart again:

Sen. Leticia Van de Putte believes the Senate Finance Committee failed to include enough money in SB 1 to cover the state's obligations under the settlement of the Frew v. Hawkins lawsuit, in which the state agreed two years ago to significantly improve access to Medicaid services. And she lays the blame for the failure at the feet of Attorney General Greg Abbott's office.

Van de Putte notes that Frew plaintiff's attorney Susan Zinn has sent two letters -- one dated Jan. 27 and one dated March 16 -- to the AG's office advising it of non-compliance with a 2007 agreement, particularly with a promise to spend $150 million on "strategic initiatives" to increase participation by children in Medicaid services -- primarily by increasing participation by health care providers. Zinn's letters to the AG noted that the Legislative Budget Board's funding recommendations for the next biennium do not comply with the court order. Van de Putte says Zinn has received no response from the state to her letters.

Further, she said, Senate budget writers were not advised of the plaintiff's concerns. "To my knowledge, (no one) in Finance or leadership was given those documents showing what was needed to be compliant," she said. "There was a disconnect."

If lawmakers fail to fully fund the settlement, "we will be in violation" of a federal court order, Van de Putte noted. "Our attorneys failed to communicate to budget writers."

Let's hope there are no nasty surprises lurking in there. Here's a statement from Sen. Eliot Shapleigh, one of the No votes, and a statement from Sen. Van de Putte, who voted Yes with reservations, is beneath the fold.

UPDATE: Floor Pass has a nice recap of yesterday's Senate budget action.

VAN DE PUTTE STATEMENT ON PASSAGE OF SB 1

"I voted for this budget with reservations. I still have serious concerns about the things we have chosen to make our priorities.

This budget sends the wrong message. It says we're more concerned about protecting our rainy day fund than we are about protecting the children in the foster care system, or helping unemployed families in these tough economic times.

We have already been sanctioned by the U.S. District Court twice regarding our commitment to children receiving Medicaid. I continue to believe we can resolve the matter of Frew without putting the state at risk for more monetary sanctions that may in fact be more expensive than a corrective action would have been.

I believe that the Article 9 Rider, Section 17.13, which prohibits scientists from using state dollars for embryonic stem cell research, is a mistake. Why bother investing in the $3 billion dollar cancer initiative voters approved last session, if we are going to impede the ability of the state to attract the cutting edge scientists we need?

Posted by Charles Kuffner on April 02, 2009 to Budget ballyhoo