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Steve Ogden

It’s usually a bad idea to bet on any kind of overhaul in the Lege

I agree that it’s a sucker’s bet to think that the Lege will try to fix Texas’ tax code in any meaningful way. Nobody likes having to take votes that may later be used as clubs against them in a campaign, and the lobbyists swarm like no other time when someone’s tax break is on the line. But such an overhaul has to happen eventually.

For Rep. Mike Villarreal, a San Antonio Democrat who serves on the House Ways and Means and Appropriations committees, it amounts to financial mismanagement by GOP Gov. Rick Perry and the Republican-dominated Legislature.

“Frankly, when you have a governor who says he will veto anything that even looks like a tax bill – even if it’s a reform of an existing, broken tax – it gives little reason for legislators to devote resources to proposing tax legislation,” Villarreal added.

Not that Villarreal and others haven’t tried.

Former Senate Finance Committee Chairman Steve Ogden, a Bryan Republican who is retiring from the Legislature, last year sought a revamp of the chronically underperforming business tax, warning that local school property taxes would otherwise rise. The business tax was expanded in 2006 to help pay for lower local school property tax rates, but it has fallen short of projections. Ogden also has called the exemption-riddled sales tax system a “rickety” thing.

[…]

Villarreal has pushed to create a special commission to recommend exemptions ripe for elimination. It’s an uphill battle, he said, since tax code reform is “the right thing to do in the long term” but presents little short-term political gain.

“We do not scrub our tax code the way we scrub our budget. Every legislative session we open up the budget. We go line by line down the expenses that we approved in the entire session asking ourselves, ‘Is this working?’ ” he said. “In the tax code you can put an exemption in place and have it never be seen again.”

As I’ve said many times before, nothing will change until the state’s leadership changes. It makes no sense that tax expenditures never get the kind of scrutiny that every other kind of expenditure gets. To use the overworked analogy, it’s like going over your household expenses line by line every month, but never reviewing your investment portfolio to see what’s performing well and what isn’t. Of course, every exemption, exclusion, and loophole in the tax code was put there to benefit some interest group with the power to fiercely defend it, and that makes it a much harder fight. But we can see the consequences of avoiding that fight. Those chickens are going to roost whether we’re ready for them or not.

Calling for a special session

It started with the Texas State Teachers Association.

The Texas State Teachers Association today urged Gov. Rick Perry to call the Legislature into special session now to appropriate $2.5 billion from the Rainy Day Fund and head off another round of harmful cuts in local public school budgets for the 2012-2013 school year.

“It is time to stop the bleeding and stop the cuts, now!” said TSTA President Rita Haecker, who appeared at a state Capitol news conference with State Rep. Donna Howard of Austin.

[…]

TSTA believes there is enough money in the Rainy Day Fund to restore the school cuts and leave a substantial balance to address other important needs. The comptroller has estimated the fund will have a balance of $7.3 billion by the end of this budget period. Other experts believe it may grow even larger, because of higher oil prices and increased production.

Gov. Perry insisted that the Legislature leave a large balance in the Rainy Day account, even while making deep cuts in state services, during last year’s sessions. TSTA will be circulating petitions, urging the governor to do the right thing now and call lawmakers to Austin. Texans also can sign the petition at:

http://www.tstaweb.net/forms/2012cutsPetition.html

“It is time for the governor to cut the politics and stop cutting away at our children, their education and our state’s future,” Haecker said. “He can call a special session, stop the cuts and do what’s right for Texas.”

Remember, the Lege underfunded Medicaid by nearly $5 billion, so most of the Rainy Day Fund is spoken for. Haecker and the TSTA are calling for the extra Rainy Day funds, which have accumulated over the past few months as the economy has improved, to be used.

Former Democratic House Caucus chair Jim Dunnam echoed the call in the op-ed pages.

Just back from his failed presidential bid, Gov. Perry has been urged by Senate Finance Chair Steve Ogden, R-Bryan, and by educator groups to call a summer special session of the Texas Legislature to address budget and school finance issues. It’s so bad that even Perry’s own appointee as head of the Texas Education Agency, Robert Scott, just said he can’t certify Texas’ ban on social promotion until the current lack of funding is addressed. Perry should heed these responsible calls to fix the problem.

In 2011, $5.4 billion was cut from public education; that’s more than $1,000 per child. Those cuts will be felt even more in the fall than in the current school year. In addition, distribution of public school dollars has gotten way out of kilter, with students really the ones suffering.

Last week, Perry ignored the calls for a special session and instead chose to minimize the role of money in education, saying, “ultimately success is about the results that we get out of our schools.” Results do measure success, but the fact is that schools receiving the most money are the ones showing the successful results.

[…]

Gov. Perry needs to listen to Ogden and others and convene a special session this year. Why await the inevitable Supreme Court ruling when the problem is staring us in the face? School funding is once again totally inadequate, and funding imbalances are determining the winners and losers in our accountability system. Ironically, Texas now has $6.1 billion just sitting in our rainy day fund – more than what was cut from schools last year.

We have to stop blaming everyone else for our problems and look in the mirror when we look at unemployment, the deficit and our economy. Our methodical and steady defunding of education at all levels is a root cause of many of these problems. The Legislature needs to go back to work now. Otherwise, our tomorrow might not come out like we want, and only we will be to blame.

Democratic Senate candidate Paul Sadler, who was an education finance policy expert while in the State House, put the focus on his presumed opponent in November, Lt. Gov. David Dewhurst.

Lt. Gov. David Dewhurst should “get to work or resign,” says Paul Sadler, former House Public Education chairman, who believes state lawmakers need to come back to the state Capitol to work on school funding in a special legislative session.

Dewhurst is running for the Republican nomination for the U.S. Senate; Sadler is running for the Democratic nomination.

Only Gov. Rick Perry can call a special legislative session, but Dewhurst should be supporting the call, Sadler says.

“Massive cuts to education this year, followed by systematic cuts planned for next year, will create a “Double Robin Hood” scenario for many public schools,” Sadler said. “I call this ‘The Dewhurst Disaster.

Paul Sadler has a simple message for David Dewhurst: “Get to work, or resign.”

“During the last legislative session, it is now obvious that both Governor Rick Perry and Lt. Gov. Dewhurst were interested only in their selfish desire to run for higher office and were too afraid of the right-wing extremists to tackle the hard issues of our state created by their mismanagement,” Sadler said. “I can certainly understand why both of these men would try to leave the State before Texans learn of the disaster they have created.”

I’ve put Sadler’s full statement beneath the fold. I confess that calls for special sessions always make me queasy. Only the Governor can set the agenda for a special session. Once the door is open, you never know what he might let in. Even if I knew the scope would be limited to this issue, I can’t say I’m comfortable with this Legislature being called back into action by this Governor to fix the problems they caused. Why should we expect a different outcome this time around? But these are academic concerns, because everyone knows Rick Perry has no interest in fixing anything. What’s important is keeping the spotlight on this failure, and how the recent welcome news about sales tax receipts and the Rainy Day Fund balance obviate the already limp excuses that Perry and Dewhurst and the rest of them had for gutting public education in the first place. This election, the next election, however many elections it takes, need to be about the failure of the state’s Republican leadership and Legislature to provide for Texas’ future. So sign the petition and join the call, and mark this date on your calendar:

And if that’s not enough, as BOR suggests, you can join with the Texas Taxpayer & Student Fairness Coalition, who are one of the school finance plaintiffs.

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Senate changes

I’m not worried about the State Senate becoming more conservative, I’m worried about it becoming more stupid.

“A seat in the Texas Senate does not come open very often, and all of a sudden now there are four,” said Sen. Florence Shapiro, R-Plano, one of the four who have announced their retirements.

“The Senate is pretty conservative now but that could change, depending on who wins the seats. It’s going to be an interesting election.”

Retiring with Shapiro, the longtime chair of the Education Committee, are Finance Committee Chairman Steve Ogden, R-Bryan; Jurisprudence Committee Chairman Chris Harris, R-Arlington; and Economic Development Committee Chairman Mike Jackson, R-LaPorte.

The four senators will take with them a combined 64 years of experience in the upper chamber.

And that’s before next year’s election, when all 31 senators are up for election because of redistricting, instead of the usual one half. In addition to the retirements, some senators could lose their re-election bids.

Sen. Wendy Davis, D-Fort Worth, for example, was one of only two freshmen senators in 2009. Now, she is expected to have a tough time running in a new district that the Republican-majority Legislature drew to elect a Republican.

Other senators are drawing challengers from the right. On Oct. 3, Donna Campbell, a Columbus ophthalmologist and tea party favorite who ran for Congress in 2010, announced that she will challenge longtime Sen. Jeff Wentworth, R-San Antonio.

I can’t speak to whatever ludicrous litmus test is controlling Republican minds this week, but none of the four retiring Senators can be reasonably classified as anything but solid conservatives. Ideologically speaking, whoever replaces them will be very close to them. What concerns me is that Ogden and Shapiro are well-informed (if generally wrong) on policy and care about outcomes, while it is highly likely that the people who replace them will be cookie-cutter Dan Patrick wannabees that won’t be able to add anything to the discussion beyond sound bites. (I see Jackson and Harris as essentially fungible; swapping them out won’t matter much.) Our discourse is dumb enough already, we don’t need it dumbed down any further. As for Davis and Wentworth, who may be the last remaining pro-choice Republican in the state, losing them would indeed make the Senate a more conservative place as well as a less intelligent place. I’m hopeful that Davis at least will get a court-mandated lack of preclearance reprieve, but beyond that it’s all up to the campaigns and the voters. In other words, one more thing to add to your list of things to worry about.

Changes will be coming

Robert Miller has a look at who we know won’t be back in the Lege for 2013. It’s a list that’s sure to get longer – I’m aware of a few more rumored retirements, and there’s already numerous primary challenges out there. In some cases, the legislative shuffling is creating openings elsewhere – first term SBOE member Marsha Farney will not run for re-election so she can pursue HD20, which is open because one-term State Rep. Charles Schwertner is running for SD05, which has been left open by Sen. Steve Ogden’s retirement. The reverse may also be true – State Rep. Dwayne Bohac in HD138 is among the throng hoping for an appointment to Jerry Eversole’s seat on Commissioners Court. Whether he gets it or not, there’s a decent chance that a current State Rep in Harris County might try to win that seat in the primary anyway. And on and on.

What this means is that I believe we are going to have at least three elections in a row with a lot of changes. 2010 was the first, 2012 is already shaping up that way, and as I have noted before, one way or another we could have a situation where there are no incumbents running for re-election to statewide non-judicial offices in 2014. That’s before taking into effect the electoral toll that may be exacted from another slash-and-burn legislative session. It’s going to be a bumpy ride, and I won’t be surprised if it continues beyond that. PDiddie and EoW have more.

This is an excellent time to cut funding for fighting wildfires

That’s exactly what the Republicans did in the budget that came into effect last week.

Cash-strapped state lawmakers – led by Gov. Rick Perry’s stand against raising taxes or dipping too deeply into the state rainy day fund – cut appropriations for the Texas Forest Service even as they had to dig for more money to meet its existing expenses.

Even the supplemental spending bill they passed this year won’t be enough to cover the expense of fighting fires through Aug. 31, the end of the 2010-11 fiscal period.

The Texas Forest Service, the state’s lead agency for fighting wildfires, anticipates it will need another $61 million just to cover those costs.

More money also will be needed to cover expenses in the 2012-13 budget period that began Sept. 1, said Senate Finance Committee Chairman Steve Ogden, R-Bryan.

Ogden said he didn’t have a number on how much additional funding the agency would need in 2012-13, “but it’s going to be a lot.” He also said the state is “well-positioned to cover our financial obligations.”

The Texas Forest Service was appropriated $117.7 million for the 2010-2011 fiscal period, which ended Aug. 31. It was appropriated $83 million for 2012-13, according to the agency.

[…]

The Forest Service’s associate director of finance and administration, Robby Dewitt, when asked whether the funding cut affected agency staffing, equipment or ability to fight fires, said by e-mail, “The budget cuts for FY2012-13 have had no impact on the current wildfire response approach.”

Ogden said the only significant cut to the Forest Service budget was a grant program for volunteer fire departments. He said it’s a good program but said, “The reason we did it is because the budget was tight and we had to cut it.”

He and DeWitt said the service’s operating budget was flat.

DeWitt said the Forest Service uses a “tiered approach” in fighting wildfires, relying on volunteer and paid fire departments as “the first line of defense.” After that, the Forest Service and other state agencies assist, and then the state brings in federal resources.

Perry is of course already whining about federal resources not being fast enough to suit him. These fires are going to cost a ton to fight, and given how long the drought may last, we’re probably going to be doing a lot more paying. Just because you don’t adequately budget for something doesn’t mean the need for it goes away. As for those volunteer fire fighters who are key to dousing these blazes, this wire story from May discusses how the reduction in grant money will affect them.

Chris Barron, executive director of the State Firemen’s and Fire Marshals’ Association, said volunteer fire departments rely heavily on grant funding. He said $135 million in requests are backlogged from volunteer fire departments.

“That alone should say that the departments out there greatly need the funding,” he told Reuters.

“Stuff in the fire service is not cheap,” Barron added.

He said many volunteer fire departments already have worn-down equipment and without funding for new equipment, response times will almost certainly increase.

I sure hope they have what they need to do this job, and the ones that will surely follow.

Opening bids on the next deficit

Do I hear $7 billion? Ten billion? How about $15 billion?

Early projections indicate that when the Legislature convenes in 2013 it could face another revenue shortfall. Not as severe as this year’s $27-billion gap, but still problematic.

“I think we’re going to have a $10- to $15-billion budget deficit next session,” Sen. Dan Patrick, R-Houston, said.

For Sen. Wendy Davis, D-Fort Worth, the gap in the 2013 session could be at least $7.1 billion.

“This is not responsible governance,” Davis told the Austin-American Statesman.

Like most Republicans in the Legislature, Patrick was against tapping into the Rainy Day Fund. But Davis and all Democrats – as well as a few influential Republicans such as Sens. Kel Seliger of Amarillo and Steve Ogden of Bryan, chairman of the Senate Finance Committee – argued that because of the severity of this year’s fiscal crisis, it would be wise to tap into the fund to balance the state budget.

The debate over how much in the hole the Legislature will be in the next session is expected to intensify during the interim, especially when key legislative panels such as the House Appropriations Committee and the Senate Finance Committee host a series of public hearings.

Of course, as we know, the remaining balance in the Rainy Day Fund is already accounted for. That means there will be much less wiggle room in 2013, and it means that either we face up to and finally deal with the underlying structural problems, which begins with the shortfall caused by the business margins tax and its inability to pay for the property tax cuts of 2006, or we slash and burn again. Which is why the mantra for every Democratic candidate in 2012 and 2014 needs to be “The Republicans said they could fix the budget through cuts alone. They were wrong.” We can’t fix the problem until we fix the Legislature.

Fiscal and health care bills pass

Here’s one less reason for a special session.

One key budget-related bill, Senate Bill 2, won final approval from both chambers this afternoon and is headed to the governor’s desk.

SB 2 is an appropriations bill that goes hand-in-hand with Senate Bill 1, the main revenue and school finance vehicle. SB 1 is expected to come to the floor on both sides of the Capitol tomorrow.

With the passage of both bills, “we will be able to go home,” said Senate Finance Chairman Steve Ogden, R-Bryan.

One provision that didn’t make in the final version of SB 2 was an amendment from Rep. Donna Howard, D-Austin, that called for $2 billion from the rainy day fund for schools if the fund brings in more than expected.

“A choice was made when we had money in the bank to say: ‘No, we’re not going to appropriate any more here to our schools’,” Howard said. “We’re going to leave billions in the bank when we’re asking our schools to cut.”

[…]

Ogden said the Howard amendment had promise with some modifications, but the House members wanted it gone.

“They were for it and then they were against it,” Ogden said.

Yes, after they were reminded by the people who hate public education that they need to hate it, too. That’s the choice they made, and the voters need to be reminded about it every day between now and next November.

Meanwhile, there was more action taken by a group of legislators that clearly wants to get out of town.

The Texas House and Senate agreed today to a final version of an omnibus health bill that seeks to cut spending and makes wide-ranging changes to the state’s health-care system.

The House voted 96-48, along party lines, to agree with conference committee changes to Senate Bill 7. Senators followed with a 22-8 vote, and the bill’s next stop will be Gov. Rick Perry’s desk.

SB 7 includes $468 million in anticipated savings for the 2012-13 budget by expanding Medicaid managed care to South Texas and restructuring the payment system for Medicaid and the Children’s Health Insurance Program.

The final bill includes language that would cut state funding from Central Health if the Travis County health district continued to finance abortions for low-income women. The measure also excludes Planned Parenthood from receiving about $38 million in state family planning money and from participating in the Medicaid Women’s Health Program, which provides contraceptive care to women who would be covered by Medicaid if they were to become pregnant.

A lot of what was in this bill was in similar legislation from the regular session. As it happens, on the same day this happened, the state of Indiana got swatted down by a federal judge for trying to legislatively de-fund Planned Parenthood. I don’t know enough about what either state has done to know how comparable the two situations are, but earlier this month Texas got some pushback from the feds over this, so there’s clearly some parallel. I feel confident there will be litigation here as well. The Trib has more on the legislation, and Jason Stanford has a righteous rant on what it does.

The budget is still broken

What was true at the beginning of the regular legislative session is still true as the special session winds down: The budget is still broken.

Instead of revamping the business tax structure or taking aim at tax exemptions, lawmakers cut billions of dollars in spending and cobbled together accounting maneuvers and spending delays to meet a massive shortfall and tide them over until 2013. They took a limited amount of money from the state’s rainy day fund, but leaders expect to dip into it again in a big way when they return in regular session in 2013.

Legislators also pushed back a looming gap in transportation funding by allowing issuance of the last of voter-approved bonds. They made some cost-saving changes in Medicaid, but will need federal approval to realize more savings.

On school finance, they are working in a special session to pass a bill to allow $4 billion less through the next two years than required under current funding formulas.

“The governor and the tea party deserve the credit or the blame, depending on one’s point of view,” for the lack of reform, said Rep. Rene Oli­veira, D-Brownsville, a former Ways and Means chairman. “I believe the majority of Texans know we have a very serious tax code problem, and they want and expect us to address it.”

We started with a structural deficit, and we’re finishing with a structural deficit. Nearly $5 billion of the Rainy Day fund will be needed by the next legislature just to cover the hot check written for Medicaid. The Republicans made billions in devastating cuts to vital services, especially public education, but did nothing to solve the underlying problems. The Democrats need to pound that theme every day between now and November of 2012. Nothing will change until the Legislature changes.

Cut education now, pay later?

That’s the question for Republican legislators, isn’t it?

GOP legislators didn’t budge this session from their commitment to reduce Texas’ education spending even in the face of protests, negative ad campaigns and reams of criticism.

The outcry didn’t faze them because it wasn’t coming from within their party.

That might change, some Republicans say, once parents see the aftermath in their child’s school of the state’s $4 billion — or 5.6 percent — reduction in what is owed to local school districts. The fallout could include teacher layoffs, school closures and elimination of extra programs or higher property taxes.

Republican incumbents “are going to be sent home by Republican primary voters because what they’re doing in public education is not in any way conservative,” said State Board of Education member Thomas Ratliff, R-Mount Pleasant. “Our version of conservative is mainstream conservative, not extreme conservative.”

Of course, there’s more to it than just the Republican primary, which is what this story focuses on. Republicans voted as a unified bloc all session, so legislators in swing districts will be running on the same record as legislators in safe R seats. There will be a lot more voters who don’t vote in Republican primaries to persuade that this was the wrong thing to do. If it really is the case that education is seen as the most important issue, then that will help. Right now it’s anybody’s guess, and there are too many factors that can influence things to have any clear idea about what will happen. It’s just too early to say.

I will say this much: The Tea Party influence on Republican legislative primaries may be a tad bit overstated. A grand total of three Republican incumbents fell to primary challenges. Two of them – Tommy Merritt and Delwyn Jones – were longtime targets of the more radical elements. The third – well, let me ask: Can you name the third Republican incumbent to lose in a 2010 primary? Off the top of your head, without using the Internet? I’ll tell you that I had either never realized this particular legislator had lost, or I’d forgotten it because the winner of that race has been completely invisible (to me, anyway). I’ll put the answer beneath the fold. Other targeted legislators like Charlie Geren and Todd Smith survived. Some of the noisier teabaggers, like James White, Jason Isaac, and Jose Aliseda, were unopposed in their primaries. The teabaggers did do well in primaries for open seats, and Bill Birdwell’s victory in the SD22 special election against the establishment candidate David Sibley was a big deal, but the overall record isn’t deep. While it’s clear that the threat of getting teabagged worked wonders for party unity this year, what will happen in 2012 if the interests of the Republicans’ monied interests diverge from the teabaggers is unknown. EoW has more.

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About that Rainy Day fund

Peggy Fikac puts it in perspective.

Why are state GOP leaders so firmly against spending more money from the rainy day fund for public education? As some explain with increasing clarity, it’s because budget writers have all but spent it already.

The fund is projected to have $6.4 billion uncommitted after taking care of a deficit this fiscal year. But because of accounting maneuvers that lawmakers plan to use to balance the upcoming two-year budget, they’ll need more money to fully fund it. They just won’t have to come up with that money until they return in regular session in 2013. The biggest maneuver is leaving as much as $4.8 billion in Medicaid caseload costs unfunded, meaning they’ll run out of money at the beginning of May 2013 and will have to make an emergency appropriation when they return in regular session. It’s common for them to underestimate Medicaid caseload growth, but not by that much.

“The rainy day fund has been committed indirectly because of the accounting methods that we’ve used, particularly underfunding Medicaid,” said Senate Finance Committee Chair Steve Ogden, R-Bryan.

So on the one hand, when legislators tell parents and teachers that they can’t use Rainy Day funds to help mitigate the cuts to public education, they’re telling the truth. On the other hand, when legislators – and especially Rick Perry – say they “balanced” the budget without using the Rainy Day fund, they’re lying. They just chose to use it for other things and hoped nobody would notice. I hope we’re all clear on that.

Senate Finance committee does its thing again

I wouldn’t call the pace of this special session “fast”, but they do have the ball rolling, starting with the Senate Finance committee as they re-approve a budget, or at least a budget figure.

The Senate Finance Committee voted 10-1 to approve the bill. The full Senate could vote [Friday] on the legislation. The House Appropriations Committee wants to pass the measure on Saturday, sending it to the full House for consideration early next week.

I’m not sure which bill is being referred to here. SB1 and SB2 are the two budget-related bills that were on Thursday’s Senate calendar; there was no House calendar for June 2. SB1 passed 10-3, with one present not voting and one absent. SB2 passed 12-2 with one absent. I don’t know if this was transcription error that should have been caught by an editor or if I’m down a rabbit hole somewhere.

GOP leaders said it would be impossible to get the two-thirds legislative vote needed to spend more from the $6.4 billion in uncommitted rainy day funds, even though a former lawmaker who helped create it in the 1980s testified that it was meant specifically to ensure public education funding did not get cut during hard times.

“The original intent of the rainy day fund was to deal precisely with the circumstances that we are in right now,” Paul Colbert, a former Houston legislator and public education committee chairman, told the House Appropriations Committee.

Colbert said the savings account never was intended to be used to deal with natural disasters – for which Gov. Rick Perry has insisted it be saved.

“It was intended specifically to make sure that we would not make cuts to public education,” Colbert said.

Now it’s just going to be used for the hot check that was written by underfunding Medicaid. Make no mistake, we will use more of the Rainy Day fund for this biennium. We’re just using it in as inefficient and dishonest a manner as possible, because the GOP just doesn’t care to do it any differently. Just look at the attitude that was expressed towards those who made it on such short notice to testify.

“You have a choice to use your savings but you are choosing not to,” Sue Diegaard, who has two children in Houston public schools, told the House Appropriations Committee. “You cut $4 billion from public education, and you expect us to think it’s a gift.”

Carol Fletcher, a Pflugerville schools trustee, said her district, which has more than 50 percent of its students on reduced-cost lunch plans, is already one of the lowest-funded in Central Texas and more cuts will hurt.

Comparing her district to a car, “Right now, we’re driving a ’72 Ford Pinto, not a Cadillac,” Fletcher said.

After hearing several witnesses urge lawmakers to use the reserve Ogden pointed his finger and told them to forget it.

“Hope is not a plan,” Ogden said shortly before the bill passed the committee.

Ogden tried during the regular session to rally support for spending the reserve fund, but was fiercely opposed by Gov. Rick Perry and other Senate and House Republicans.

“I’m saddened that we gave up so easily,” said Sen. Eddie Lucio, D-Brownsville.

Ogden also said he doesn’t believe what he called threats of “draconian” cuts to local schools.

“We’re not cutting school budgets,” Ogden said. “We’re just not giving them as much money as they think they are entitled to.”

I have no earthly clue what Ogden means by that. I can’t think of any interpretation of the facts that lends itself to that conclusion. In addition, the Texas Progressive Alliance documented over 12,000 jobs lost from a small fraction of Texas’ school districts a month ago. How many more need to be lost before it’s taken seriously by those who could choose to do something about it?

I like the way Ed Sills described this in his daily email:

Perhaps anticipating the political fallout to come, the rhetoric on school cuts by Republicans is changing. Sen. Steve Ogden, R-Bryan, who chairs the Senate Finance Committee, has begun claiming that the spending on public schools is actually increasing and that the amount going to the Foundation School Program is billions higher than in the last budget.

Ogden is no one’s fool and he might be able to produce the asterisks to make some kind of case. But who believes the current budget is not a major break in the Legislature’s commitment to provide funding to public schools, colleges and universities, the poorest of the poor and others who depend heavily on adequate state services? Even the Republicans were conceding that the budget cuts $4 billion from public schools just a week ago. All session long, Republicans have discussed “the new normal” with regard to school funding. Just this week, Sen. Dan Patrick, R-Houston, argued that public school funding is not an entitlement. They don’t get to back out of that rhetoric now.

Yes, let’s do remember what Dan Patrick said about how we’re finally gutting cutting public education as he and his fellow travelers have wanted to do for a long time. The Republicans don’t get to have it both ways.

In the end, both SBs 1 and 2 were approved by the full Senate, so on to the House they go. Relatedly, the Senate Finance Committee approved a bill that would allow for teacher furloughs and pay cuts. Numerous other education-related bills, some of which are budgetary in nature and some of which are not, await their turns. The Trib, Texas Politics, EoW and PDiddie have more.

Vote on school finance today

On Friday night, the Lege finally reached an agreement on school finance, which is to say on how to distribute the $4 billion in cuts to public education to the school districts. Today the Lege gets to vote on that deal.

House leaders wanted a two-year plan cutting school funding across the board by about 6 percent.

The Senate insisted lawmakers address the controversial “target revenue” system that has created disparities in school district funding. The compromise will use across-the-board cuts for the coming school year before turning to the Senate’s version for the 2012-13 school year.

“We believe it’s the best way to distribute those dollars out to our communities,” Shapiro said.

The deal has been called part Eissler and part Shapiro, which is to say part of HB400 and part of SB22.

Preliminary numbers indicate that Houston ISD will lose about $84 million the first year and an estimated $119 million in the second year — or cuts of roughly $328 per student in the first year followed by $490 the second year. Those numbers are based on earlier printouts that should be fairly close when the newest district-by-district impact figures come out, Shapiro said.

Based on the preliminary details, HISD faces a smaller cut next year than district officials had projected, but they expressed concern about deeper cuts the following year.

Hair Balls noted on Thursday that the HISD Board of Trustees was cautiously optimistic that their remaining shortfall would end up being less than they had originally planned for.

Although leaders reached an agreement on school funding, individual lawmakers will have to assess the impact of the funding cuts on the school districts they represent before ratifying the plan. Most if not all 49 House Democrats are expected to oppose the plan to cut funding to public education — especially when use of the state’s rainy day fund could have avoided those cuts.

“It’s unbelievable that we would lay off teachers, increase class sizes, cut Pre-K programs and hurt our schools across the board while there is more than enough money sitting in the rainy day fund to avoid the cuts completely,” said Rep. Scott Hochberg, D-Houston.

Without Democrats, House Republicans would need 76 of their 101 members to support the agreement. Rep. Charlie Geren, R-Fort Worth, one of the House negotiators, said, “I think we can sell this.”

I hope you can, too. I can’t wait for the 2012 campaigns to start noting that this Republican or that voted to cut billions of dollars from public schools. Remember, the House and every Republican in it originally voted to cut $8 billion from public education, so whatever cuts they end up approving for their own schools, they were prepared to approve cuts twice as big. Oh, yeah, I’m ready for this to quit being a legislative issue and start being a campaign issue. Have fun voting on your cuts, Republicans. School Zone and EoW have more.

Budget passes

It’s official.

The Texas House and Senate passed a state budget Saturday that cuts billions from public schools, state universities and health care for the elderly.

The $172 billion legislation now goes to Gov. Rick Perry for his signature.

Facing a massive revenue shortfall, lawmakers crafted the budget by making cuts and using deferrals rather than raising taxes or dipping into the $10 billion reserve fund.

The Senate voted 20-11, mostly along party lines. McAllen Sen. Chuy Hinojosa was the only Democrat who supported the bill.

[…]

In all funds, the plan for 2012-2013 is $15 billion less than the current budget, but that doesn’t account for the costs of providing services to new population.

According to Postcards, the House vote was 97-53 for the budget – guess that means the Speaker cast a vote as well – and according to the Trib, one of the four Republican votes against was the turncoat Aaron Pena. Nice to see that he remains consistent in his lack of principles. That means that all 49 House Dems voted No, which is exactly what they should have done. Not much else for me to say about this, so let me turn it over to the numerous statements I’ve received, all of which are reproduced beneath the fold.

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We have a budget

Such as it is.

Budget negotiators met briefly this morning and voted 9-1 to adopt a conference committee report that cuts the state budget over the next biennium by $15 billion, or 8 percent. The total amount of funding from taxpayers, known as general funds, is $80.4 billion. The total expenditures for all funds, including federal money, is $172.3 billion.

Senate Finance Chair Steve Ogden, R-Bryan, and House Appropriations Chair Jim Pitts, R-Waxahachie, told reporters their respective chambers are expected to vote on the report as early as Saturday afternoon.

“We have covered the entire (2010-2011) biennial deficit and the budget is balanced for the next two years. And at the end of the day, that’s a pretty extraordinary accomplishment considering the challenge we were in,” Ogden said.

I suppose a Hollywood accountant might call this a “balanced” budget, but between the delayed payments to school districts, the $4.8 billion hot check for Medicaid, the fantasizing about federal waivers and higher-than-projected property tax revenues, it’s a budget built on cotton candy and hallucinations. And that’s before we consider the cost of slashing $4 billion from public education, which was the best case scenario for that. What still hasn’t been done is to figure out how to spread that $4 billion in cuts out over all the school districts.

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said there’s a provision in the budget agreement that makes Foundation School Program payments to school districts contingent on the House and Senate agreeing on school finance.

“If there is not agreement … there’s no appropriations to the Foundation School Program. We’d have to come back in special session,” Ogden said.

Abby Rapoport has more on what the school finance options are at this point. I assume they’re strongly motivated to avoid having to go into a special session. But even if they do, there’s still the question of whether or not the Comptroller will certify the budget. Rep. Garnet Coleman has some questions for Comptroller Combs:

1. Will you evaluate the combined revenue and expenses of all major pieces of legislation regarding the state’s fiscal matters, not just the primary budget bill (House Bill 1), in determining whether or not Texas has passed a balanced budget?

The Legislature is deliberating numerous “fiscal matters” bills that have consequences on our state’s finances for FY 2012-13. In 2003, the last time Texas faced a massive budget shortfall, Comptroller Carol Keeton Strayhorn determined that the budget was a “’patchwork’ piece of legislation that depends on several other bills to determine some of the spending” for the FY 2004-2005 budget. (Source: Associated Press, “Strayhorn criticizes lawmakers for ‘smoke and mirrors’ budget,” June 5, 2003).

Which, if any, bills other than House Bill 1 do you anticipate your office evaluating in order to determine whether or not you will certify the Texas budget?

2. Will you certify $4.8 billion in Medicaid expenses if they are not paid for with revenue Texas can identify in its budget?

Wayne Pulver, an assistant director at the Legislative Budget Board, stated before the Texas House Committee on Appropriations on Monday, May 16 that, “it is our estimate that with these funding decisions, the bill is short $4.8 billion in general revenue.” (Source: Associated Press, “Texas budget plan kicks Medicaid funding problem down the road,” May 21, 2011.) It is your intention to certify the Texas budget as balanced, even if we are budgeting to pay for something we do not have the money to pay for?

3. If you cannot certify the $4.8 billion in Medicaid expenses, will you send the budget back to the House in which it originated to ensure Texas passes a balanced budget?

In 2003, Comptroller Carol Keeton Strayhorn refused to certify the state’s budget because it spent $186.9 million more in the FY 2004-2005 biennium than the state could count as available revenue. Governor Rick Perry, under a special provision inserted by budget writers, was able to use line-item veto authority to cut expenditures in the budget by $186.9 million. Comptroller Strayhorn was then able to certify the budget.

However, the current $4.8 billion shortfall in Medicaid expenses is over twenty-five times the size of the 2003 budget shortfall Comptroller Strayhorn originally did not certify. It is my request that, provided you do not certify the $4.8 billion in Medicaid expenses that remain unaccounted for in any legislation being considered by the Texas Legislature, you do not send the budget to the Governor to balance the budget.

It is our duty, as legislators, to pass a balanced budget. Should you determine that the budget is not balanced, I would request that you send it back to the House in which the budget originated, as prescribed by Article 3, Section 49a(b) of the Texas Constitution.

You can read Rep. Coleman’s full letter to Comptroller Combs here. A statement from the CPPP is here, and a statement from Rep. Mike Villarreal is here. Trailblazers and EoW have more.

It’s always been about controlling women

Sadly, there’s nothing new about this.

Senate Finance Committee Chair Steve Ogden, R-Bryan, said Monday afternoon that budget negotiators will likely adopt a 2012-13 family planning budget that is “pretty close” to the House’s proposal — $37 million for low-income women under the Department of State Health Services — compared to the $100 million proposed by the Senate.

Meanwhile, Sen. Bob Deuell, R-Greenville, and Rep. Garnet Coleman, D-Houston, agree that the Medicaid Women’s Health Program, operated under the Health and Human Services Commission with a 9 to 1 federal match, is likely dead.

Both pots of money are a casualty of GOP lawmakers’ efforts to keep Planned Parenthood or any other clinic that provides abortions in some of its affiliate branches from getting state dollars for family planning. (No clinic that provides abortions may receive state or federal funds.) But Coleman and Deuell said it’s something more: lawmakers’ increasing desire to link contraception to abortion.

“Apparently the anti-abortion movement has morphed into the anti-contraception movement,” Deuell said.

Added Coleman: “The objective to end contraception funded by the state is another religious intrusion into the lives of individuals.”

With all due respect to Sen. Deuell, there’s been no metamorphosis. The anti-abortion movement has always been about controlling women’s sexuality. This has nothing to do with the motives of sincere individuals who oppose abortion on principle, it has to do with a reactionary and radical political ideology that unfortunately got a huge boost last November despite being at best a stealth item on the political agenda. It’s also unfortunate that Sen. Deuell, who recognizes this movement for what it is, however belatedly, has nonetheless played right into it with his own legislative attacks on Planned Parenthood. Perhaps he and others like him who do distinguish between opposing abortion and promoting a fanatically misogynistic worldview through legislation might learn something from this. If so, that would at least be a tiny sliver of daylight to emerge from this terribly dark session. It’s up to those of us who have seen this coming for years to make sure they realize it.

http://www.chron.com/disp/story.mpl/metropolitan/falkenberg/7574416.html

More on the budget deal

From the Statesman:

The agreement is hinged on the House passing a so-called fiscal matters bill, Senate Bill 1811, that would free up money to help pay for the $3 billion in additional spending to which the House negotiators agreed.

“Once they get (SB) 1811 passed, I think we’ll resume deliberations on the budget, and hopefully we can get it closed out tomorrow,” Senate Finance Chairman Steve Ogden, R-Bryan, said Friday.

The Senate agreed to back off $1 billion in spending to reach consensus on the budget – of paramount importance to the state’s Republican leaders, who want to avoid a special legislative session this summer.

[…]

On the other side of the Capitol, the Senate did its part to deal with the budget package by advancing its school finance plan.

The budget deal shorts school districts by $4 billion over the next two years compared with current law. But neither chamber had passed separate legislation that would change that law and reduce the state’s obligation.

Sen. Florence Shapiro, R-Plano, had previously been unable to muster the 21 votes to bring the school finance bill up for debate in the Senate because Democrats refused to support a $4 billion reduction in funding for school districts. But an opportunity presented itself when Senate Bill 1581, a budget-related education bill, got kicked back to the upper chamber because of a procedural issue.

Senators voted 17-13 to attach their school finance proposal, which changes how state aid is distributed to districts. The House might take it up as early as Monday.

Shapiro said this approach is “the best chance, the very best chance that we have as a body to protect the classroom.” She added that the Senate plan might not be perfect, but it is an effort to soften the impact of reduced funding for public education.

Sen. Kirk Watson, D-Austin, said cuts to public education are inevitable. But he said he voted against the measure because Senate leaders had failed to fix a system that they acknowledge is broken. “We are going to accept broken as normal,” he said.

As noted by the Trib’s liveblog, the House passed SB1811 at about 1AM Saturday morning. I figure today and tomorrow will be about passing other bills, with SB22 being a top priority for the House next week. Stay tuned.

UPDATE: If you really want to get into the nuts and bolts of SB1811, read the LSG analysis of it and the many amendments to it that were filed.

Budget deal reached

One less reason for a special session. Assuming nothing else goes wrong, and Rick Perry doesn’t veto it out of whatever sense of grandeur and vanity drives him.

House Speaker Joe Straus indicated legislative negotiators have reached an agreement on the state budget, and the House soon today will consider the much-delayed revenue-generating bill crucial to balancing it.

“We wouldn’t be going with this bill until there was an agreement, so you can draw your own conclusion,” Straus told reporters, referring to Senate Bill 1811. “We’re ready to go.”

Straus didn’t give details, but one sticking point had been higher education, an item on which senators initially wanted to spend $1 billion more than the House. The House countered with an offer to narrow that gap by $300 million.

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said a bit earlier after leaving a meeting on the House side, “We’re working on it … We’re in better shape than we were a few hours ago.”

SB1811 “has to pass in some form in order to balance the budget,” Ogden said. The measure includes deferring about $2 billion in state school payments.

Postcards and the Trib have more. Looks like Sen. Florence Shapiro’s SB22, which was added as an amendment to SB1811, will be the plan to officially reduce funding to the public schools. We’ll see if those House teabagger freshmen and others who’ve been expressing heartburn about voting to slash funding to their own schools wimp out or not.

I normally put statements from elected officials beneath the fold, but this one from Rep. Garnet Coleman deserves to be seen by everyone.

Rotten Deal Bad for Texans, Nursing Homes, Schools and Colleges

Republicans in the Texas House and Texas Senate have come to an agreement for the 2012-2013 state budget. The rotten deal cut by the Republican supermajority cuts nursing homes, public schools and universities, and financial aid for college students. Their celebratory rhetoric does not match the reality of their budget’s painful cuts to Texans.

Texas needs to pass a budget with $99 billion to provide the same level of services to Texans. No real effort was made by the conference committee to improve the painful cuts made in the House and Senate.

$21 billion short of current services – House budget
$16 billion short of current services – Senate budget
$18 billion short of current services – “Rotten Deal” Budget

All Republicans have done is come to an agreement between bad and worse. Republican leaders are boasting that they cut a deal, but for some reason haven’t bragged about their cuts to nursing homes, public schools, and public universities, all of which will adversely affect Texans. Those in control in the two chambers have come to an agreement to burn down the house we know as Texas.

The cuts from the current biennium, like the 3% rate cut for nursing homes, carry forward under this budget. On top of the new level of cuts, the rotten budget deal uses funny money and accounting gimmicks like delaying payments to push off the cost to the next Legislature. They also left money in the Rainy Day Fund during a storm and didn’t even address the permanent budget shortfall created by Gov. Perry in 2006. Republicans are writing a hot check so they can skip town and not fix the mess they’ve made.

Untouched money sitting in the bank:
$6.6 billion Rainy Day Fund
Drastic Cuts:
$4 billion cut from public schools for Texas children
Funny Money:
$4.8 billion in unfunded Medicaid services for elderly, disabled, children and pregnant women
Accounting Gimmicks
$700 million “assumed savings” from Medicaid waivers that likely won’t be approved.
$2.2 billion “deferral” of Foundation School Program payment
Permanent Structural Shortfall Not Addressed
$10 billion shortfall every 2 years

Future shortfall
$10 billion shortfall every 2 years
$700 million “assumed savings” from Medicaid waivers
$2.2 billion “deferral” of FSP payment
+ $4.8 billion in unfunded Medicaid
$17.7 billion shortfall for the 83rd Legislature

There’s no way this is a balanced budget. It’s billions short of where Texas is supposed to be on Medicaid and education. Even worse, it means Texas is going to be at least $17.7 billion of current services next session. Those in control of the budget should have crafted a budget that invests in our children, ensures that our seniors are cared for, and protects vulnerable Texans. Instead, they’ve developed an irresponsible budget, made devastating cuts to Texans, and created a huge shortfall that Texas families will have to make up for in the next legislative session.

Keep an eye on that $17.7 billion number. There’s no question that a lot of the “cuts” from this budget are just bills being deferred to the next Lege, and as we’ve discussed before, the Rainy Day Fund that Perry and his minions have been so mulish about not using will be tapped at some point in 2013 to pay the piper. What I want to know is, what excuse will the Republicans use for the next ten-digit budget shortfall? Who will they blame next time? The 2014 elections may wind up being more interesting than the 2012 elections will be. A statement from Sen. Wendy Davis is here and a statement from Sen. Rodney Ellis is beneath the fold.

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House punts on budget bills till tomorrow

After getting off to a slow start, budget negotiators realized they were going nowhere fast and put a merciful end to things for the day.

The House has punted to Thursday any floor consideration of the “non-tax revenue” bill and related bills needed to close out a deal on the two-year state budget.

Rep. Jim Pitts told members from the front microphone Wednesday afternoon that House-Senate budget negotiators are within sight of a budget deal.

“I want to be able to get an agreement before we take up” the non-tax revenue bill, said Pitts, the House’s lead negotiator. “We’re very, very close.”

Actually, depending on who you ask and when you ask them, the Lege is either “very close” to a deal or they’re “stuck”, amid “politics at its worst”, and there either will be a special session or there won’t. Got all that? Postcards and the Trib have more.

Combs raises revenue estimate

Looks like Sen. Ogden and his fellow dreamers got their wish.

Comptroller Susan Combs added $1.2 billion to her estimate of state revenues, making that much more money available to budget writers who are scrambling for cash. She said the state’s income from sales taxes, motor vehicle sales taxes and oil production are all up, and that those numbers justified the increase in the amount available to spend during the 2012-13 budget.

That’s not enough money to settle the differences between the House and Senate — their budgets differed by $4 billion in education alone — but it’ll help. The House is scheduled to consider a package of finance bills on Wednesday; the outcome of that debate will determine whether the legislators writing the budget can finish their job this week, or whether the budget will have to be written in a special session this summer.

There’s still a big gap between the House and Senate budgets, and the final product is still going to suck. But every little bit helps, I guess. On a tangentially related note, see Nate Blakeslee.

Senate passes supplemental appropriation with extra rainy day funds

I guess I hadn’t realized that the Senate hadn’t gotten around to passing a bill to close the deficit from the last biennium, since the House had done that a long time ago amid a huge debate about using Rainy Day Funds, but it’s just now that they passed the House’s bill, with a little vig thrown in.

The Texas Senate approved a $3.97 billion draw on the state’s Rainy Day Fund to cover a deficit of the same size in the current budget, but not before rejecting efforts to add on a larger amount to help balance the 2012-13 budget.

Sen. Steve Ogden, R-Bryan, matched the size of the withdrawal to the size of the current deficit. But he asked the Senate to use more of the fund than the House used, casting aside other revenue sources that were in that chamber’s mix. If that prevails, it would mean a bigger draw on the Rainy Day Fund and would make an additional $855.9 million available for the next budget.

[…]

Ogden said the bill — HB 275 — isn’t supposed to finance the next budget. He limited the size of the draw on the savings account to the size of the deficit in the current budget. “I’m using the Rainy Day Fund for a single purpose, and that is to cover the current deficit,” he said.

Point being, and I confess I lost some of the details along the way in the fog, the deficit that needed to be closed was bigger than the total amount of Rainy Day Funds that the House voted to use, so the Senate version of HB275 frees up a bit more cash for this biennium. Not that much in the grand scheme of things, but we are well past the looking gift horses in the mouth portion of this session.

Whether the House will go along with this, and whether the two chambers can reconcile their budgetary differences remains an open question. A special session is not just a possibility at this point, it’s a near certainty – as Robert Miller points out, the House did not pass a Congressional redistricting bill before Thursday’s deadline, so at the very least there’s that. Ogden has suggested that a special session could be limited to school finance issues, meaning that other areas of the budget, including Medicaid, could be agreed upon before sine die. That now appears to be the case.

House and Senate negotiators have reached agreement on everything in the state budget except for public and higher education and a section of general provisions that can be used later to make sure the numbers in the budget balance.

They left some controversial issues — like funding for family planning — for later. And the leaders of the conference committee — Appropriations Chairman Jim Pitts, R-Waxahachie, and Sen. Steve Ogden, R-Bryan — said they need to resolve their differences over education quickly if they’re going to finish a budget during this regular session.

Time is running short. The conferees have to agree on a budget and coordinate that with other pieces of legislation that plug in, including a group of “fiscal matters” bills that generate money for the budget with cuts, accounting tricks and other measures, and on two bills that cover a nearly $4 billion deficit in the current budget, which runs through the end of August.

[…]

Lawmakers are also hoping Comptroller Susan Combs will make more money available. She’s been waiting to see what that business tax will produce — it was due this week — before making any adjustments to her forecasts. Sales tax returns lagged for the first year of the two-year budget period, but have been growing at a robust rate for the last several months. As a result, some budget writers expect her to raise her estimate of what will be available to spend, and expect to hear one way or the other in the next few days.

I don’t know how much hope to have about that. This agreement shorts Medicaid by $4.8 billion, at least some of which is to be appropriated later. The House will tackle some key budget bills tomorrow, at which time we’ll have a better idea of how the rest of this mess will play out. Whatever the case, the end result will be a disaster and an abject failure for the state. That much is already known, and won’t be resolved any time this year.

Nothing is dead, and nothing is certain

The deadline for passing House bills on second reading was midnight Friday last week, which means that tons of bills are technically dead, as they can no longer be brought to the House floor for a vote. However, bills can still be attached to other bills that are eligible for consideration as amendments, so nothing can be ruled out at this stage.

“As long as the budget is alive, any fiscal measure is still alive,” said Rep. Todd Hunter, R-Corpus Christi, chairman of the influential House Calendars Committee, which determines which bills go to the House floor for debate.

“I think gambling is still alive because it’s a revenue measure and, as the budget process is alive, so is any revenue measure.”

A watered-down gambling bill to allow slot machines at racetracks and Native American reservations moved out of the House Licensing and Administrative Procedures Committee last week

“There’s not enough interest on the House floor — at the moment,” said Rep. Mike “Tuffy” Hamilton, R-Mauriceville, the committee chairman who moved the gambling bill.

Support for the gambling bill could build later — perhaps in a summer special session, he said, as members look for more non-tax revenue. The limited gambling bill could raise about $3 billion, he said.

You knew gambling would come up in this conversation, right? There are still big disagreements about how much money the Lege will actually spend this session, and how cuts to public education will be distributed, and these issues are not close to being resolved.

The House and Senate each has passed its own budget plan, with the Senate spending $4 billion more state dollars than the House in order to mitigate proposed spending cuts to education, nursing homes and other priorities.

The two sides now have little time to hammer out a compromise , and they’re struggling to reach common ground. The Senate thinks the House cuts are too deep, and the House thinks the Senate is unrealistic about how much money is available.

“It’s going to be real tough to get to a compromise,” one high-level legislative staffer said Friday, speaking on the condition of anonymity as to not further disrupt the negotiations.

Senate finance chief Steve Ogden said on Friday that a special legislative session on the budget is “pretty likely.”

Anything can happen, but I’d put my money on a special session. The question is whether another thirty days would be enough to resolve the disagreement, since what that really means is who capitulates. There, I’d be putting my money on the Senate finally giving in to the fanatics in the House. At which point we’ll have the budget the Republicans have been dreaming about for years. What happens after that is up to us.

School finance issues holding up budget deal

News flash: School finance reform is hard. Especially when all it’s doing is taking money away from everyone.

The clock is a-tickin’ for Texas lawmakers to cobble together a budget compromise that enacts deep cuts to public education.

But with less than three weeks left in the legislative session, neither chamber has debated, much less passed, a school finance bill that would reduce the state aid owed to school districts by as much as $6.5 billion.

Both the House and Senate budgets are precariously balanced on the assumption that such legislation would be approved. Failure to do so would probably force lawmakers into a special session this summer.

“It’s essential that we pass some type of school finance reform in order to successfully end the session. So it’s the No. 1 priority right now,” said Senate Finance Committee Chairman Steve Ogden, R-Bryan.

On the House side, Calendars Committee Chairman Todd Hunter, R-Corpus Christi, said the school finance legislation would not be among the bills to make it to the floor before a key deadline at the end of the week.

“There are a lot of interconnected parts that aren’t fitting together yet,” said Public Education Chairman Rob Eissler, R-The Woodlands.

The House plan could still hitch a ride on another piece of legislation, but at least one local lawmaker, Rep. Paul Workman, R-Austin, said he wouldn’t be able to support it.

Although Workman backed the House budget bill that reduced the school funding, he said Tuesday that the House school finance bill hurts his school districts too much to get his vote.

Well that’s mighty thoughtful of him, and I’ll bet he has plenty of company in that regard, but just what exactly did Paul Workman expect when he voted to cut $7.8 billion from public education? The attitude he’s expressing here is basically “it’s all right to cut as much as needed from everyone else, just not from me”. Hey, you voted for those cuts, you live with the electoral consequences. If you don’t like what you see, you should have done something different. I have no sympathy at all, even if his dithering may work to put pressure on the Republicans to ease the pain. But let the lesson be learned: It’s easy to favor “living within our means” and “cutting spending”. It’s a lot harder to vote for cuts to your own school district.

Senate passes its budget

Once the rules were suspended to allow the budget bill CSHB1 to come to the floor, this became a mere formality.

The Texas Senate took minutes to tentatively approve a proposed $176.5 billion, two-year state budget Wednesday in a party-line 19-12 vote, steamrolling Democrats who said it cuts back crucial services while leaving billions unspent in the rainy day fund.

Senate Republicans said the proposal is the best they can be offer to preserve priority spending in the face of a mammoth revenue shortfall and demands that Texas preserve its savings account for future needs.

[…]

Ogden got all 19 Republicans in the 31-member Senate on board when he stripped the rainy-day contingency from the bill, but he lost any Democratic support.

I’m just wondering if there’s any polling data to back up this belief that massive cuts are preferable to dipping into reserves, especially given that we’ve had no problems using it before and that the same Governor who’s standing guard over the RDF like Ebenezer Scrooge over Bob Cratchit’s Christmas bonus is telling school districts to use their reserve funds instead of firing teachers. Obviously, one would have to word the questions carefully, but I think any reasonably accurate description of the RDF, a/k/a the Economic Stability Fund, would yield a lot of support for using it. I sure hope we ask the voters about this in the next election.

Of course, what the Senate really did was more sleight of hand than anything else, as Nate Blakeslee explains.

But here’s the thing—Ogden’s solution is a change in name only, because the Rainy Day Fund is still in the stew. Under the new plan, the budget balances only by pushing $1.25 billion of Medicaid funding into the next biennium. Keeping in mind that the Senate budget already shorts Medicaid by at least $2.7 billion, we are now talking about a shortfall of nearly $4 billion for an entitlement program. This guarantees an enormous supplemental bill in 2013. How will we pay for it? Last night, after the budget debate, Dewhurst pointed out that by taking the Rainy Day Fund out of HB 1, we will have plenty of money in the fund to pay for any shortfall due to entitlement programs like Medicaid. So under the new Odgen/Dewhurst plan, the Rainy Day Fund will act as a sort of, what’s the word…backstop. Here’s your takeaway: By taking out the backstop now, we will have the Rainy Day Fund available as a backstop in 2013.

You remember how this Lege closed the budget gap from the previous biennium, right? Guess what the next Lege will be asked to do as a first order of business. Assuming they don’t fix it with a supplemental appropriation next year. Barring a sufficiently strong recovery that blows current revenue projections out of the water, we’re going to use this money sooner or later. In the name of appeasing the teabaggers, Republicans voted to move the money from their left pocket to their right pocket, call it “savings”, and hope no one notices. You do have to give them credit for having brass. The Trib, Postcards, and Burka have more.

Senate fails to bring the budget to the floor

It started Monday when Senate Finance Chair Sen. Steve Ogden said he might pull same Rainy Day funds out of the budget in order to get more Republican (read: Dan Patrick) support for it. After some discussion about alternate ways of incorporating Rainy Day funds and some griping about the Comptroller, CSHB1 was brought up for debate about suspending the rules on Tuesday afternoon. The Trib liveblogged the action, in which Ogden laid out the game plan:

Ogden started by telling lawmakers that if they vote to suspend — to take up the budget bill for debate — he’ll take out the provision that would dip into Rainy Day Funds if state revenue comes up short. He’d reduce Medicaid spending by $1.25 billion (more on that in a second), and would include a contingent appropriation equivalent to a 1.2 percent across-the-board spending increase in everything except public education and debt services.

The across-the-board cuts would take place if the comptroller says the money isn’t available; if it is, those cuts won’t happen.

And the Medicaid cuts are a sleight of hand: Lawmakers will be back in January 2013 and if Medicaid comes up short — by, say, $1.25 billion — they’ll take care of it then. In fact, the budget without any changes pushes $3 billion in Medicaid spending off for the next Legislature to deal with.

That was not acceptable to Democrats, and after three hours the vote to suspend fell short, 19-12, on straight party lines. But as Nate Blakeslee noted, the Republicans have another card to play.

Under the Senate rules, Wednesdays are “House bill days” in which House bills already on the calendar may be brought up for consideration without suspending the regular order of business—that is, without a two-thirds vote of the senators present. You do have to take the House bills in the order they currently appear on the calendar. The next House bill on the Senate’s official Regular Order of Business calendar—that green book you see floating around the Senate that nobody ever looks at because it is usually totally irrelevant–is HB 1, the budget. Tomorrow is a Wednesday.

It’s clear that this is what will happen today.

Sen. Rodney Ellis, D-Houston, said the decision before the senators is not about the budget but whether “to change the whole nature of how things operate here.”

Ogden agreed that if he could not get the 21 votes needed today, Senate traditions were at risk.

“That is why I have worked so hard and done everything that I could possibly think of to get to 21 votes,” Ogden said.

But Ogden pointedly noted that “we were not sent down here to preserve the two-thirds rule. We were sent down here to govern.”

“People of the state of Texas don’t give a diddly about the two-thirds rule,” he said.

I do agree with Sen. Ogden about that. People for the most part don’t know or care about procedural minutiae. I for one am not going to defend any supermajority requirements, not after all the crap we saw in the US Senate these past two years. Let the debate happen, and if in the end it passes on another straight party vote, as was the case in the House, then so be it. If this is what the Republicans want, if this is what they think they were elected to do, then let them do it. I’m happy to have that debate. There was some speculation earlier in the week that Democrats, on the House side at least, were hoping for Senate budget talks to break down and force a special session, but politically speaking this does nearly the same thing.

So we’ll see where it goes from here. Robert Miller thinks this is the demise of the Senate’s 2/3 rule, and I think he’s right. Jason Embry had wondered why conservative activists hadn’t been rebelling against it before; now they may not have to. What I know is that ownership of all of the bad effects of the budget is now fully in the Republicans’ hands. Let’s get the next election season started, shall we? A statement from Sen. Kirk Watson is here, a statement from the Texas AFL-CIO is here, and a letter to Sen. Wendy Davis from the Legislative Budget Board about her request “regarding historical funding of student enrollment growth in the Foundation School Program” is beneath the fold.

UPDATE: EoW and the Trib have more.

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Senate makes progress on the budget

They still haven’t gotten to the actual budget yet, but they’ve passed a bill that allows for some extra “non-tax revenue” plus a bunch of accounting gimmicks, which makes their less-penurious-than-the-House budget possible.

The Texas Senate, digging publicly for money while it battles quietly over a proposed budget, approved a “non-tax revenue” bill that would make $4.3 billion available for spending over the next two years. The vote was 21-10, with all of the no votes coming from Republicans.

Senators walked around taxes, wary of a constitutional provision that requires revenue-raising measures to start in the Texas House. They talked about taxes on small cigars, on full-time residents of hotels and motels, and on ending exemptions to producers of high-cost natural gas. Other ideas, like sweeping the balances in the governor’s economic development funds, were presented and then pulled down before they came to a vote.

The Senate Finance Committee voted out a budget a week ago that depends on the money in SB 1811, and also contains a provision for tapping into the state’s Rainy Day Fund for up to $3 billion. That provision, combined with the fact that the budget cuts 5.9 percent from current spending, has senators struggling to assemble the 21 votes it would take to call up the budget for debate.

Given the 10 Nays from Republicans, you can see how difficult it is for the Senate to thread the needle on this budget. Ogden thinks the budget may come to the floor on Monday. I’ll bet there’s an awful lot of intense negotiations between now and then.

Along the way, the Senate rejected Republican amendments to impose a hiring freeze at state agencies as well as some other salary cuts, and they adopted some transparency initiatives that had been pushed all session by Sen. Kirk Watson. All this happened while Lt. Gov. David Dewhurst was whining about Democrats being mean and partisan without saying who he had in mind, which drew a sharp retort from Sen. Judith Zaffirini, who is generally not one of the hotheads. Like I said, this ought to be a fun weekend for them. And finally, in separate action, a Senate committee voted to stick a knife in the guts of Planned Parenthood, which as we all know will do ever so much to improve the health of women everywhere. EoW and BOR have more.

Dewhurst flips, then flops, on using rainy day funds

First he says he’s against it.

[Lt. Gov. David] Dewhurst sounded supportive of the overall level of spending in the Senate plan, but voiced a preference for using what he calls nontax revenue items instead of the rainy day fund. Some of the supposed nontax revenue ideas that senators haven’t embraced include selling some state land and property, or trying to liquidate state tobacco settlements that are now in endowments.

“I disagreed with them,” said Dewhurst, who presides over the GOP-dominated Senate. “But again, this is a process; we want to keep it moving; we want to get it into conference (committee).”

You can see a transcript of the conversation Dewhurst had with reporters over this here. The man is good at ducking and weaving, I’ll give him that.

The rainy day fund money is a critical difference between the Senate plan and the House plan, which does not spend any rainy day dollars. The Senate version also spends more than the House’s because it would allow some accounting tricks, including a speedup of tax collections and a brief delay in payments to school districts; however, the House has appeared willing to support those measures as well.

So if Dewhurst does not support using rainy day dollars, members of the Senate — particularly Democrats — may have little incentive for bringing it up for a debate on the floor. Those dollars could disappear in a conference committee with the House, since House leaders, and Perry, have said they don’t want to spend rainy day money over the next two years.

The question of whether to bring the budget to the floor has set off considerable debate in Democratic circles. One school of thought says that if Democrats block the budget, perhaps pushing the debate into a special session, Republicans will have no incentive to work with Democrats and will pass the House’s cuts-heavy approach.

But without the rainy day fund, there may be little difference between the House and Senate approaches. And the rule requiring a two-thirds vote to bring the bill to the floor would not be in effect for a final House-Senate compromise, meaning Republicans could pass it without any Democratic support.

In a memo to Democratic colleagues obtained by the American-Statesman, Sen. Kirk Watson, D-Austin, said Tuesday that he believes the use of the rainy day fund will vanish in a House-Senate conference committee.

“I truly believe it would be a mistake to take any position on the budget that assumes the final version will have significant new revenues — particularly from the Rainy Day Fund — to pay for Texans’ basic needs and priorities,” Watson said. “I’m unconvinced we can trust that those in control of this process truly intend to put significant new dollars into these priorities.”

Then he says he’s for it, more or less.

A day after telling reporters that he’d resisted and been surprised by the Senate Finance Committee’s decision to allow for the use of $3 billion more from the rainy-day fund to support its spending plan, Lt. Gov. David Dewhurst issued a letter to senators saying he supports the measure and asking them to do the same.

Dewhurst leaves himself a bit of wiggle room in the letter, saying that if “Texas keeps growing the way it is now, we may not need much, if any, from the Rainy Day Fund”, and calling on Comptroller Susan Combs to certify an increase in future revenue for the Senate to use, with any remaining gap to be taken from the RDF. What Plan B is if Combs refuses to do that is unclear.

I think there’s a lot of merit to Sen. Watson’s concerns. Dewhurst’s comments changed the dynamic of the debate over the Senate budget, as Rep. Garnet Coleman and the CPPP are now urging a No vote on it. I don’t know if they still feel this way after his latest change of direction. Republican Sen. John Carona is pushing back as well. Not surprisingly, Finance Committee Chair Sen. Steve Ogden, who has been struggling to find 21 votes for the budget, called Dewhurst’s remarks not helpful. You can say that again.

Consideration of HB1 is on the Senate intent calendar, but a vote may or may not happen today as there aren’t enough Yeas to suspend the rules for it – via Texas Politics, Nate Blakeslee says at least four Republicans are No votes on it, which means it may not have even a majority, let alone two thirds support. Should be a fun day in the Senate today. The Trib has more.

Senate Finance Committee passes its budget

The fight over the Rainy Day Fund is now officially on.

A $176.5 billion budget for the 2012-13 biennium — 5.9 percent smaller than the current budget but almost $12 billion larger than the version passed earlier by the House — won approval from the Senate Finance Committee Thursday morning and will come to a full Senate vote after the Easter break.

And, unlike the House version, the Senate would use up to $3.1 billion from the Rainy Day Fund for the .

The vote was 11-4, with Sens. Eddie Lucio Jr. of Brownsville, Dan Patrick of Houston, John Whitmire of Houston and Judith Zaffirini of Laredo voting against it. All but Patrick are Democrats. Two Democrats — Juan “Chuy” Hinojosa of McAllen and Royce West of Dallas — voted for the bill.

The chairman of the committee, Sen. Steve Ogden, R-Bryan, said the Senate version spends more money on nursing homes, on public education and on Medicaid. “It doesn’t generously meet the needs of Texans, but I think it’s adequate,” Ogden said. He said he wasn’t spending more to set up a compromise in coming negotiations with the House. “I’m going to fight for this bill,” he said.

[…]

The House version would spend a total of $164.5 billion. Senate Finance’s version totals $176.5 billion. The current budget totals $187.5 billion. Spending from state sources — general revenue — comes to $80.7 billion in the Senate plan, as against $77.6 billion in the House plan and $82.1 billion in the current budget.

The Senate’s biggest cuts, compared with current spending, come in health and human services, which would get $7.8 billion less. Ogden said the budget leaves Medicaid spending about $3 billion short of what current law requires. But with changes afoot in Washington on health care and Medicaid, he said current law could change before the money is needed. If it doesn’t, the state will have the money. “That’s why we need to leave some money in the Rainy Day Fund,” he said.

According to an analysis prepared by the Senate, the upper chamber’s version makes smaller cuts in Medicaid reimbursement rates than the House, provides $200 million more for mental health services, and restores proposed cuts to foster care programs. It puts $4.3 billion more into public schools, $400 million more for textbooks and makes smaller cuts to teacher retirement and health plans than the House. Almost $200 million more would go to TEXAS Grants. The Department of Public Safety would get $249 million more than in the House version, and prisons would get $358 million more — enough, according to the analysis, to maintain current probation and capacity needs in prisons.

Let’s be clear on this: The Senate budget still sucks. It’s better than the House budget, by a lot, but that’s like saying that it’s better to be smothered in your sleep than to be eaten alive by piranhas. The end result is still the same, which in this case is a budget that does not meet the needs of the state. Don’t get me wrong, I’m glad the Senate has done what it has to make the truly wretched House budget better, and I’m glad that Sen. Ogden intends to fight for his version. That’s a fight that can only end with one or both sides giving in, now or after some number of special sessions, so if he really means that, it’s saying something. It’s just too bad that even in the case of a clear win for Sen. Ogden, the victory will be extremely hollow.

Sen. Kirk Watson sums it up well:

For weeks, politicians and pundits have focused on a genuinely horrendous plan approved by the Texas House of Representatives to hack away at schools, nursing homes and so many other priorities that Texans hold dear – even knowing that such a devastating proposal would never be approved by the Senate.

So compared to that gore-fest, the milder horror show of the Senate budget must look pretty good, right?

But compared to anything else – Texans’ priorities, Texas’ history, even the status quo – the Senate plan that’s now on the table remains unworthy of this state and its people.

And make no mistake: had we been told back in, say, September that the state was about to take about $4 billion from Texas schools and billions more from universities and the uninsured – all the while using the same debt, diversions and deception that have been a staple of the state’s budget-balancing practices for years – I suspect most of you wouldn’t have called that a “best-case scenario.”

I doubt you’d conclude it was an acceptable solution simply because “it could have been worse.”

Meanwhile, the Rainy Day Fund that Rick Perry and the band of radicals in the House are fighting to preserve is doing just fine on its own, thank you very much. Thanks to robust oil and gas prices, the fund may increase by another $3 billion or so in the next two years, far more than the current Comptroller projection. Given that sales tax revenues are ticking up as well, one might wonder why we plan to sit on a huge pile of cash when teachers are getting fired and nursing homes are closing. That’s a question that needs to be at the forefront of the 2012 elections. In somewhat related news, the House adjourned for the weekend without taking action on a bill that would allow for greater class sizes and give school districts some more flexibility in dealing with cuts by getting rid of the minimum salary schedule for most employees. This is similar to but not the same as the Senate bill that would allow for furloughs, among other things. For the more wonkish among us (you know who you are), here are three documents of interest sent to me from the office of Rep. Mike Villarreal: The Legislative Budget Board summary of CSSB 1; the LBB summary of CSHB 1; and a comparison of HB1 and CSHB 1. Robert Miller, Abby Rapoport, and EoW have more.

UPDATE: The Statesman story from today notes that the class size provisions in Sen. Shapiro’s SB12 have been removed by Sen. Dan Patrick, who was their main booster. “I didn’t want to do anything to make it any more difficult to pass,” Patrick said. “There are too many good things in the bill to have the whole thing go down on one area where we don’t agree.” For more on Rep. Eissler’s HB400, the bill that was postponed until next week, see here, here, and here. Finally, RG Ratcliff writes on BurkaBlog “If you think of the two-year budget passed by the Texas House as a bankruptcy filing for the State of Texas, then the budget approved by the Senate Finance Committee yesterday is a reorganization plan that requires a substantial liquidation of assets.” Good way to look at it.

Is it time to fix school finance?

It’s pretty much always time to fix school finance, since school finance is always broken, so here goes the Senate. Maybe.

State Senate leaders want to end the much-despised public education funding system by 2017, although they disagree on how to do it — and time is growing short.

Some prefer a goal to end the “target revenue” system based on what school districts received in 2006. That system has not been adjusted for inflation and has created huge funding disparities over the past five years. A goal of ending target revenue will keep pressure on lawmakers, Senate Education Committee Chairwoman Florence Shapiro, R-Plano, said Monday.

But others argue that such a goal is meaningless until the state fixes its $5 billion-a-year structural revenue deficit.

Lawmakers don’t lack pressure, said Sen. Leticia Van de Putte, D-San Antonio. “We lack courage, courage to admit that we made a mistake and how to fix it. … We’re not going after the core problem. All we can do is make the patient feel a little better while they are totally miserable, and we’re not doing the cure.”

That’s about the size of it. There’s no plan on the table, so speculation is all we have. But anything that doesn’t address the structural deficit – and to his credit, Finance Committee Chair Sen. Steve Ogden has talked about this – is broken right out of the box. And they’re doing it from a starting point of cutting $4 billion from public ed, which is still a hell of a lot better than the House. But only if they can pay for it, and now that Sen. Ogden has admitted they need to tap the Rainy Day Fund for $3 billion to achieve the revenue restorations they’ve budgeted, it’s not clear they’ll get there. They’re right to go for the RDF, but they’ll be fighting the House and Rick Perry for it. All we can do is watch and hope.

House approves a little more money, Senate readies its budget

Just a little.

Texas House budget-writers voted Monday to free up an additional $3 billion for key state services through such moves as speeding up tax collections, delaying payments and suspending the back-to-school sales tax holiday.

The bills next go to the full House, which Appropriations Committee Chairman Jim Pitts, R-Waxahachie, predicted could be willing to add $4 billion to $5 billion to a bare-bones spending plan it passed earlier this month.

“I think that we can come up with that number, and I think we can still pass the bill. It’s non-tax. It’s not additional fees than what was already assumed in the introduced bill,” he said.

The proposed two-year $164.5 billion House budget would cut 12.3 percent, or $23 billion, from current state and federal spending.

It would leave school districts short nearly $8 billion of money they would get under current funding formulas; cut Medicaid reimbursement rates so much that nursing home closures are threatened; and slash college student financial aid. Extra funds could be used to soften those cuts.

It should be noted that the bulk of what the House actually did was vote to delay making payments to school districts from August to September, which pushes them into the next biennium. That “saved” $1.8 billion, and while that means it’s $1.8 billion more that can be spent this biennium, it has to be made up somewhere. If we’re lucky, revenue projections will be adjusted upward and that money can be paid back before the next Lege meets. If not, that’ll be another $1.8 billion they find themselves in the hole. This is also why school districts maintain reserves, since they know damn well that the Lege is going to do stuff like this to them.

It remains the case that the Senate is planning to spend more than the House is. The Trib documents some of the Finance Committee’s work.

The proposals from Sen. Robert Duncan, R-Lubbock, total $4.8 billion and include $2 billion in deferred payments, which help balance the budget by moving costs from the end of fiscal 2013 into the beginning of 2014. The state still has to make the payments, but not as part of the new budget. Another $1.4 billion comes from accelerated tax collections, in which the state moves the receipt of some of its taxes — on motor fuels, alcoholic beverages, corporate franchise and sales — from a later budget into an earlier one. Both maneuvers allow the state to pick which payments and which receipts will count for and against the budget they’re writing. Another $593 million comes from unspecified measures that, he said, would not require any changes in law.

The remaining $800 million comes from property sales, fee increases (on custom brokers stamps, process server certificates, a tax on small cigars labeled as a fee), changes in unclaimed property programs, and other measures.

Duncan said that all but a handful of the ideas are already in various bills being considered by the Legislature. He didn’t say whether any of the money on his list was already counted in either the House or Senate budget, or both.

The matter of moving more funds from the Permanent School Fund to the Available School Fund came up as well, though if the divided vote in favor of using it is any indication, it won’t have enough support to make into a ballot referendum. I note also that Land Commissioner Jerry Patterson, who vocally opposes using additional funds from the PSF, advocated using more of the Rainy Day Fund instead. Good for him.

Robert Miller puts the differences between the House and Senate budgets in context.

The House has passed a biennium budget spending $77.6 billion in General Revenue. House Appropriations Chairman Jim Pitts has said that he believes he sees another $4.3 to $4.5 billion in non-tax revenue the House would spend. […] Assume the House budget ultimately increases by $4.5 billion to $82.1 billion. The question is what number will it take to make a deal with the Senate in the Regular Session?

Senate Finance is scheduled to vote out its version of the budget on Thursday and take it to the Senate floor next week. I don’t know the amount of the budget, but I believe that it will be in the $85 to $87 billion range. The real gap between the Senate and House when the budget gets to conference during the first week of May is likely to be $3 to $5 billion. At this point, it is anybody’s guess whether that gap can be bridged by May 30.

All of this is without taking into account the possibility of expanded gambling, for which Texas Association of Business President and CEO Bill Hammond advocated in the Trib on Monday. That appears to be a non-starter in the Senate, but if the House passes a joint resolution, who knows? There’s still a lot that can happen. Abby Rapoport and EoW have more.

UPDATE: Per the comment left by Land Commissioner Patterson, I have clarified the post to more accurately convey his intent. My apologies for the confusion, which came directly from my own confusion about what exactly was on the table.

Here comes the Senate budget

We know that the Senate budget will spend more money than the House budget, not that this is a high bar to clear. We know that the Senate has searched high and low for the funds to support the higher appropriations they want. This week, we find out how they plan to do it.

Senate leaders are looking at non-tax revenue and, possibly, dipping further into the rainy day fund than Gov. Rick Perry has said he is willing to do. If they do not find agreement on revenue, spending may have to be shaved.

“This is a pretty aggressive effort to fund as many critical items as we could. It’s going to be a challenge to make sure it balances,” Senate Finance Chairman Steve Ogden, R-Bryan, said after the panel sent a two-year budget proposal to the printer Thursday night in anticipation of a committee vote next week on the overall bill.

“If we’re successful, we’ll still be substantially reducing funding as compared to the current biennium,” he said.

Ogden did not give a final tally on the proposal. He said last week that as the Senate plan stood then, it would spend $16 billion more than the House measure. Senate budget-writers since have voted to add money in some areas.

I’ve no idea how this will play out. We’ve seen that there’s not much there in terms of non-tax revenues, and some of the more recent proposals have been controversial. If the Senate reaches in for more Rainy Day money, it’s not clear that either the House or Rick Perry would go along with it. If the Senate budget has to be cut back because they can’t come up with enough funds, Democrats may block it and force a special session. This is going to be a critical week.

When you find yourself in a hole, go ahead and keep digging

So Texas has this big budget shortfall. You’ve probably heard about it. A big part of that shortfall is structural, thanks to the 2006 property tax cut that was supposed to be funded primarily by the business margins tax. Unfortunately, that tax was projected from the beginning to fall short, and it has turned out to perform even worse than originally expected. This has led to a deficit of about $10 billion for this biennium, and more of the same for the future until the Lege does something to fix it. To his credit, Senate Finance Committee Chair Sen. Steve Ogden is willing to attack this problem. Unfortunately, he can’t do anything about it because tax legislation must originate in the House. As it happens, the House Ways and Means Committee is talking about the business margins tax, and is considering legislation to amend it. The only problem is, the legislation they’re considering would make a temporary exemption for the tax to businesses that gross less than $1 million a year permanent. This would add another $75 million to that structural deficit. Makes perfect sense, right? Go read Burka and Abby Rapoport for the details and marvel anew at the way our state government works.

The House finds a few extra bucks

Where has this been all along?

State Rep. Rob Orr, R-Burleson, introduced two bills to the House Appropriations Committee that could add several million dollars to the public schools budget over the next two years.

HB 2646 proposes allowing the School Land Board to transfer at least half of the net revenue it collects from a land trust it oversees to the Available School Fund (ASF), an endowment that puts money directly into public schools in Texas. Orr said that pot of money has risen to more than $2.5 billion in market value and contains more than $1 billion in cash. If that trend continues, the fund could supply the state with an additional $500 million in the next biennium.

“I think it’s irresponsible to have that much cash sitting around when our public schools need that money,” Orr said.

Getting this measure to pass requires companion legislation, so Orr is also sponsoring HJR 109, a constitutional amendment that would allow the General Land Office, which oversees land that belongs to the Permanent School Fund, to distribute revenue directly to the ASF. The resolution would be placed before voters during the Nov. 8 election.

I’m not terribly familiar with the details of these funds, but judging by the reaction to Orr’s bills, which range from “sounds OK to me” to “praise Jeebus!”, I welcome the legislation and hope there’s more where it came from.

There’s also this.

The House’s chief champion of giving poor, elderly and disabled Texans discounts on their utility bills is so frustrated, he wants to kill a surcharge funding the program and use all unspent money as a one-time fix for gaping holes in the state’s social services budget.

“The surcharge needs to be ended. You cannot redirect it … and be honest with the people who are paying,” Rep. Sylvester Turner, D-Houston, said Thursday.

Turner reacted coolly to Senate budget chief Steve Ogden’s suggestion earlier Thursday that the fee money could help pay for Texas’ Medicaid program, presumably on a continuing basis.

“Either you end it or you rename it and call it what it is — a utility tax,” said Turner, vice chairman of House Appropriations.

This is the System Benefit Fund, which is supposed to be used for the purpose of helping the needy pay their utility bills in the summertime but which never gets appropriated for it; the sizable balance of the fund is used to certify the budget. That would be one of the usual accounting tricks the Lege is known for. I too would prefer to see the SBF used for its intended purpose, but if that isn’t going to happen, and history strongly suggests it won’t be, then putting it to use elsewhere is far better than pretending it’s general revenue so it can help balance the budget.

On a more general note, Burka examines the role that House GOP Caucus Chair Larry Taylor may play in determining how far the House will go with ideas for extra revenue. None of this stuff will matter if the slash and burn crowd decides that it’s not really about “living within our means” but about cuts for the sake of cuts.

Tax breaks are spending, too

Let’s see who among the “we have to live within our means” crowd opposes this.

Faced with a looming budget shortfall, the Senate’s most powerful member is carrying legislation that would cap state spending on school property tax breaks that are Texas’ primary tool to attract major business relocation or expansion projects.

Sen. Steve Ogden, chairman of the Senate Finance Committee, wants to cap the state’s overall financial liability for the tax breaks that local school trustees have granted to ventures as diverse as Gulf Coast refineries, West Texas wind farms and Samsung’s chip plant in Austin.

His Senate Bill 1590 would give the comptroller, not local trustees, the final say over which companies qualify for tax benefits. It also would eliminate the side deals that allow companies to pay school districts extra money outside the school finance system.

Since 2001, local school trustees have granted property tax breaks to qualifying businesses locating or expanding in their districts, and the state has covered the districts’ lost revenue by increasing their state aid. The estimated cost to the state is about $400 million over the next two years.

Ogden, a Bryan Republican, said the state’s tax and budget systems are out of sync and that Texas no longer can afford to reimburse school districts for what he called an unlimited liability largely out of state control. His bill would cap the state’s liability at $225 million per year, considering the total value of all school tax breaks.

“We’ve got an unsustainable situation,” Ogden said Monday. “I’m worried about this state.”

Business interests naturally howled about this during testimony before the committee. Funny how this sort of thing is always the one priority we can’t afford to lose, isn’t it? This is sort of an unfunded mandate in reverse, as local decisions affect the state’s bottom line. I agree with the intent of the bill, though I’d feel better about it if the state were half as sensitive to the more well-known type of unfunded mandate. Ogden is correct to say that our arbitrary tax code is out of sync with the budget. This is a relatively small potatoes fix, but to his credit Ogden is also willing to bring up the gigantic elephant in the room, the structural deficit caused by the insufficiently funded property tax cut of 2006.

Ogden’s committee is preparing to review and revise House Bill 1, the state budget for the next biennium, which proposes $23 billion in cuts. He said his committee is still looking for extra revenue to close some of that gap. Even so, he says there is only so much the Senate can do because revenue bills have to originate in the House.

“There’s a lot in motion right now, but one of the fundamental underlying issues in the budget approach that both the Senate and the House is taking is, ‘What are you going to do about the structural deficit?’ Basically, neither house is answering that question satisfactorily right now,” he said, adding that without a change in statute, the state will owe public schools $7.8 billion more than the House budgeted.

“All we’ve done is we’ve postponed and delayed and deferred our obligations into the next biennium. You think we’ve got a problem? Just keep doing that with the current budget and look at the car wreck you’re going to have in 2013.”

I’m afraid we’ll get a close look at that car wreck of which he speaks, because a fix for the structural deficit ain’t gonna happen this session. (The fecklessness of David Dewhurst is also an obstacle.) And frankly, unless an awful lot of Republican legislators get unelected in 2012, I wouldn’t hold my breath on it in 2013, either. Trail Blazers has more.

Senate restores some funds to Health and Human Services

Still not clear how they’re paying for any of it yet.

The Senate Finance Committee voted Thursday to restore a less-than-expected $4.3 billion in health spending in 2012-13 but promised to try to find more money in the coming weeks.

The panel adopted most of the recommendations made recently by the Medicaid subcommittee, including a widely sought provision reversing a planned 10 percent cut in Medicaid reimbursements for doctors and dentists.

Advocates had feared the cuts would force many physicians, already operating on thin margins, to stop seeing Medicaid patients.

But the committee held off on plans to reduce steep cuts to nursing home and hospital reimbursement rates despite fears that the action would force nursing homes to close and hospitals to pass higher costs on to other patients.

The Medicaid subcommittee, led by Sen. Jane Nelson, R-Flower Mound, supported spending almost $540 million to limit rate cuts to 2 percent for nursing homes and 3 percent for hospitals.

But Finance Chairman Steve Ogden, R-Bryan, backed away, saying the expense was too great — for now. “I don’t know yet how to pay for that,” he said.

Better figure it out fast. And it would be nice if we could find some ways to pay for it that aren’t one-time deals so that we don’t dig ourselves an even deeper hole for next time. Don’t get me wrong, I’m rooting for the Senate to pull this off and make things a little less horrible. With the House busy slashing and burning, I’m just trying to keep it all in perspective.