The itty bitty budget deal

It’s not nothing, but not by much.

Gov. Rick Perry and House leaders struck a deal Tuesday to spend $3.2 billion from the state’s rainy day fund to fix one piece of the state’s budget shortfall.

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Perry said at the start of the session that lawmakers should not use any rainy-day fund money, but he has softened his position in recent weeks to say the money should be used as a last resort. By endorsing the House vote Tuesday, he in many ways abandoned his last-resort position, since the January-to-May session is only halfway over.

Still, Perry’s posturing could go a long way in shaping the debate about how lawmakers should combat their much larger shortfall as they write the budget that begins in September.

“As we craft the next two-year budget, Texas leaders will continue to focus on a more efficient, fiscally responsible government, essential state services, and private sector job creation,” Perry said in a statement. “I remain steadfastly committed to protecting the remaining balance of the Rainy Day Fund, and will not sign a 2012-2013 state budget that uses the Rainy Day Fund.”

Many Republican lawmakers, fearful of looking weak to conservative activists by twice taking money out of the fund, are likely to agree with Perry.

“I think the governor wants to make sure that we don’t come back for more,” said House Appropriations Committee Chairman Jim Pitts, who says the $3.2 billion is all the House will take from the rainy day fund. “I cannot get votes to use it for anything else.”

While it’s better to use some of the Rainy Day Fund than none of it, this will do very little to mitigate the huge cuts that are still coming for public education, Medicaid, and everything else. And that’s just how Rick Perry and the most radical factions of the Republican Party want it. Burka sums up what happened.

Perry steamrolled the House. He limited the spending of the Rainy Day Fund to 3.2 billion, all of it to balance the budget by paying the state’s bills. The rest of the 4.3B necessary to balance the budget will come from more cuts ($800M and $50M).

Then, for good measure, he vowed to veto the budget if lawmakers attempted to spend any of the remaining money in the Rainy Day Fund.

I don’t know what the leadership in the House has been doing, but Perry has been calling in House members to lobby them against using the Rainy Day Fund. He has also been lobbying the committee. Obviously, he is a heckuva good lobbyist.

The House won nothing in the negotiations except the ability to spend $3.2B from the Rainy Day Fund, but only for the purpose of balancing the budget. It was a hollow victory because the state cannot constitutionally fail to balance the budget. All the $3.2B achieves is to spare the state the embarrassment of being technically broke.

Democrats on the Appropriations Committee voted for HB275, which authorized the use of the RDF for the 2010-11 biennium, then voted against companion bill HB4, which made the further cuts Burka mentioned.

State Rep. Mike Villarreal, D-San Antonio, said the leadership is using the rainy day fund to avoid the embarrassment of failing to pay its bills, which Comptroller Susan Combs has said would be result if they didn’t use some of the $9.4 billion reserve fund for the current deficit.

“We’re willing to tap the rainy day fund to save face but we’re not willing to tap the rainy day fund to mitigate the harm that is going to be inflicted upon our children,” Villarreal said. “That, in a word, is irresponsible.”

Appropriations Chairman Jim Pitts, R-Waxahachie, took the criticism from Democrats in stride, acknowledging that this is the political reality.

And that needs to be the message that gets through next November. The Republicans wanted the cuts that are to come. They’re going to get them, and they need to be held responsible for them.

UPDATE: The Trib has more.

The House Appropriations Committee voted 27-0 Tuesday afternoon to move HB 275 to the floor. The substitute bill authorizes the state to draw down about $3.1 billion from the Budget Stabilization Fund, commonly referred to as the Rainy Day Fund. A companion bill, HB 4, passed out of the committee on a party-line vote. That legislation is controversial because it outlines where the savings will come from. Lawmakers began the day short about $4 billion. After the Rainy Day funds are taken into account, the rest of the savings comes from Combs’ revised $300 million sales tax revenue estimate and more than $800 million in cuts. That latter figure is alarming, but officials say most — if not all — of those reductions have already been implemented by state agencies over the past two years.

Democrats objected to the effects the potential cuts may have on education and health care services. They also spoke out against the governor’s refusal to consider using any additional Rainy Day funds to cover the next biennium’s shortfall, especially since Perry has clearly stated he will not support any kind of tax increase.

“[This statement] ties our hands,” said Rep. Sylvester Turner, D-Houston. “To say you cannot consider the Rainy Day Fund for fiscal years 2012 and 2013 is irresponsible.”

I suspect we’ll be hearing that word a lot. In related news, more specific cuts were made.

The Appropriations Committee just approved deep cuts to the Health and Human Services Commission and the four departments it oversees. The vote was 16-8. It wasn’t quite along party lines, as Rep. Susan King, R-Abilene, joined dissenting Democrats.

Chief social services budget writer John Zerwas, R-Spring, said addition of $2 billion from Tuesday’s decision to spend rainy-day dollars eased the pain a bit. He said that allowed members to “to get it to a place that’s at least a little more comfortable than where we started.”

Still, cuts to home-based care for the disabled and seniors, nursing homes, prevention programs for child abuse, programs for developmentally disabled children and health care providers remain far deeper than any belt-tightening taken in the last fiscal crisis in 2003.

If you’re lying on a bed of broken glass and rusty nails and someone gives you one of those little airplane pillows for your head, you’ll be a little more comfortable than you were before. But you’ll still be a long way off from being in a good place. A statements from Rep. Villarreal is here, and from Rep. Eric Johnson is here.

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