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Larry Gonzales, Our Texas State Representative, District 52 » Texas lawmakers close in on budget accord after tentative water deal

Texas lawmakers close in on budget accord after tentative water deal

By ROBERT T. GARRETT Austin Bureau rtgarrett@dallasnews.com
Published: 14 May 2013 10:46 PM
Updated: 14 May 2013 10:46 PM

AUSTIN — Lawmakers appeared close Tuesday to striking a deal to finalize the state budget, undo $3.2 billion of last session’s cuts to public schools and create a $2 billion fund for water.

The tentative pact followed days of deep concern about whether the water provision in particular could clear the bar.

“We’re going to land it,” Sen. Tommy Williams, the Senate’s lead budget writer, said of a session-ending money deal.

House Speaker Joe Straus, R-San Antonio, cautioned that the deal wasn’t quite complete but sounded confident as budget negotiators worked late into the night.

House and Senate budget negotiators face a deadline to complete the budget — the only bill that lawmakers must pass before their session ends May 27. The two-year blueprint is likely to spend between $195 billion and $196 billion, counting federal funds.

Meeting in small clusters and dashing back and forth to top leaders’ offices, lawmakers sought to nail down the big framework on public schools and water but also on tax cuts, funding for state colleges and universities, and repairs for truck-torn rural roads near the booming oilfields of West Texas and South Texas.

But with GOP leaders determined not to raise taxes nor tap much of the state’s rainy day fund, the last amounts of money needed for all of that appeared hard to come by.

It was unclear whether budget makers would fund major transportation improvements and an across-the-board pay raise for state workers. Also uncertain was how much headway they would make on leaders’ desire to stop or greatly reduce the use of budgeting tricks to balance the books.

On Monday night, they signaled there are limits to their New Year’s resolution on honesty in budgeting by approving a Medicaid budget that experts said was $800 million to $1 billion short of state tax revenue. Williams, R-The Woodlands, said he was awaiting updates that might show lawmakers already have budgeted enough for the health insurance program for the poor.

Even as state revenues have rebounded from the national recession, lawmakers struggled to undo cuts made in 2011, when they faced a $27 billion budget shortfall. They also had to keep a gimlet eye trained on Gov. Rick Perry’s evolving demands for tax cuts and infrastructure investments.

The Republican governor has threatened to call lawmakers back to Austin this summer if they fail to enact enough tax cuts and infrastructure improvements.

Water fund

Last week, after the two top budget writers’ talks broke down, a special session seemed likely. But Williams and his House counterpart, Waxahachie GOP Rep. Jim Pitts, held productive sessions late Friday.

After that, things moved swiftly. The two men, with the blessing of their chambers’ leaders, Lt. Gov. David Dewhurst and Straus, sealed an agreement late Monday on a plan to start a proposed water fund.

Its launch has been vexing.

While Straus has made providing $2 billion for the revolving-loan fund his top priority, he and other House leaders sharply criticized a Senate proposal to have voters decide whether to tap rainy day dollars for that purpose.

Passing a constitutional amendment would dedicate the money to loans for water reservoirs, pipelines and conservation projects. Business groups and elected officials agree that’s necessary for a drought-stricken state with a surging population.

However, budget writers are bumping up against the state constitution’s limit on how much spending of nondedicated state tax revenue can increase. Some GOP lawmakers are nervous that opponents in their own party could oust them in a primary if they vote to bust the cap.

Putting the question on the ballot would dedicate the money and let lawmakers duck a direct vote.
Straus and House leaders, despite reservations, swallowed hard and agreed to pass a constitutional amendment creating the fund. They stressed the amendment would not contain a dollar figure or appropriate a single cent.

“We insisted that we were not going to start doing a referendum-type of government in Texas like they do in California,” Pitts said.

Still, the plan would require both chambers to approve taking $2 billion from the rainy day fund, which is expected to hit $12 billion soon. That requires a two-thirds vote, giving clout to minority Democrats.

With 55 of 100 members in the House and 12 of 31 in the Senate, they can deny the necessary supermajority, if they stick together.

Education rift

Rep. Sylvester Turner, D-Houston, said he and fellow Democrats haven’t bought into GOP leaders’ proposal to undo only $3.2 billion of last session’s $4 billion of cuts to basic state aid for elementary and secondary education.

In 2011, lawmakers also whacked $1.3 billion of grant programs for pre-kindergarten, remedial help and teacher merit pay. This session, the Senate voted to put back $300 million for the incentive pay, while the House didn’t restore any of the grants.

Late Tuesday, it was unclear whether budget negotiators salvaged any grant funding.

Also murky was whether the scaled-back constitutional amendment to set up the water fund — shorn of the Senate’s rainy day drawdowns of highway and school money — would negate the need for a vote to exceed the spending cap.

Williams said he had no doubt it would, though Pitts asked Attorney General Greg Abbott’s office for assurance.

On higher education, Pitts said House members want to spend about $300 million less than senators.
“They gave a lot more money in the [higher education] formula,” Pitts said. “We’d like to, but bottom line is, there is a bottom line.”

Leaders were tight-lipped about tax cuts. Perry has demanded $1.8 billion worth, even if they have to be partially financed through rainy day dollars. In January, House leaders showed little enthusiasm, but the House in recent days has passed tax cuts totaling more than $1.3 billion.

The GOP leaders’ desire to dial back taxes rankles advocates of more spending on schools and health care. They point to the state’s abysmal rankings in spending for such items.

“Tax cuts, when Texas already has some of the relatively lowest state taxes in the nation,” said Eva DeLuna Castro, budget analyst for the center-left think tank the Center for Public Policy Priorities. “Seriously?”

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