Straus: Se­nate 'cook­ing the books' in plan

Se­nate fi­nance panel OKs bud­get that de­lays $2.5 bil­lion pay­ment.

Austin American-Statesman - - FRONT PAGE - By Sean Collins Walsh

The Texas Se­nate Fi­nance Com­mit­tee on Wed­nes­day unan­i­mously ap­proved a $106.3 bil­lion two-year bud­get us­ing an ac­count­ing trick that de­lays a $2.5 bil­lion pay­ment for trans­porta­tion fund­ing to the fol­low­ing bud­get cy­cle.

The ma­neu­ver prompted harsh crit­i­cism from House Speaker Joe Straus and fur­ther dis­tanced the two chambers as they strug­gle to find com­mon ground in a tight bud­get year.

Fi­nance Com­mit­tee Chair­woman Sen. Jane Nel­son, R-Flower Mound, said de­lay­ing the trans­porta­tion pay­ment, a move she said Comptroller Glenn He­gar has ap­proved, “solved a lot of our prob­lems.”

“Even with that, it’s a tight bud­get. I could not be prouder of the prod­uct we are putting for­ward,” she said af­ter the 15-0 vote.

Straus, R-San An­to­nio, fired back min­utes later, telling re­porters that the Se­nate plan amounts to “cook­ing the books.”

“Count­ing money twice in order to bal­ance a bud­get is not a good idea. This is the Texas Leg­is­la­ture. We are not En­ron,” Straus said.

Straus, whose ini­tial bud­get pro­posal to­taled $108.9 bil­lion, would pre­fer to tap the state’s $10.2 bil­lion rainy day fund to avoid more se­vere cuts, but hard-line Repub-

li­cans have said the fund should only be tapped for one-time ex­penses or nat­u­ral dis­as­ters.

“I’m not in­ter­ested in cook­ing the books just to avoid a vote on the rainy day fund. We have op­tions,” Straus said.

Propo­si­tion 7

The trans­porta­tion money in ques­tion was set aside by a state con­sti­tu­tional amend­ment pro­posed by the last Leg­is­la­ture and adopted by vot­ers in a 2015 ref­er­en­dum. The amend­ment, known as Propo­si­tion 7, takes up to $2.5 bil­lion per year of the state’s gen­eral sales tax money — which can go to schools, pris­ons and health ser­vices — and di­rects it to high­way spend­ing.

The Se­nate Fi­nance Com­mit­tee’s bud­get would de­lay by one month the trans­porta­tion pay­ment from Au­gust to Septem­ber. Be­cause the bud­get year ends at the end of Au­gust, the 2019 pay­ment would come dur­ing the first month of the 2020 bud­get year.

That ma­neu­ver frees up money by al­low­ing the state to ex­ceed the $104.9 bil­lion He­gar has said is avail­able for law­mak­ers to spend in the 2018-19 bud­get. But Straus said that de­lay­ing the pay­ment while also al­low­ing the trans­porta­tion projects that de­pend on it to move for­ward, which Nel­son said the Se­nate plans to do, amounts to dou­ble-count­ing the same $2.5 bil­lion in sales tax rev­enue be­cause it will ap­pear on the books of both the state’s gen­eral fund and the high­way fund dur­ing 2019.

Af­ter Straus’ com­ments, Nel­son is­sued a state­ment say­ing: “This is a smart money man­age­ment de­ci­sion that al­lows us to re­spon­si­bly meet our needs with­out raiding the rainy day fund.”

Lt. Gov. Dan Pa­trick on the Se­nate floor called the ma­neu­ver “a very sound fis­cal method.”

The trans­porta­tion fund- ing ma­neu­ver is the lat­est in a se­ries of dis­agree­ments be­tween the House and Se­nate that have many won­der­ing whether lead­ers in both chambers will agree on a bud­get by the end of May, when law­mak­ers are sched­uled to de­part Austin. If they don’t, Gov. Greg Ab­bott will have to call a spe­cial ses­sion on the bud­get.

Nel­son said the Se­nate will vote to ap­prove its bud­get pro­posal Tues­day.

Rainy day fund

The House Ap­pro­pri­a­tions Com­mit­tee hasn’t yet voted on its bud­get, but Chair­man Rep. John Zer­was, R-Rich­mond, re­cently un­veiled a stop-gap bud­get mea­sure that spends $2.5 bil­lion from the rainy day fund, for­mally known as the Eco­nomic Sta­bi­liza­tion Fund. The re­serve, funded pri­mar­ily by oil and gas pro­duc­tion taxes, is the largest of its kind in the coun­try and is pro­jected to grow to $12 bil­lion by the end of the next bud­get cy­cle. Zer­was’ mea­sure, known as a sup­ple­men­tal bud­get, would use the money to plug holes in the cur­rent bud­get and also pay for some things, such as border se­cu­rity and a short­fall in the teacher re­tire­ment health care sys­tem, that would oth­er­wise fall to the next bud­get.

Nel­son on Wed­nes­day said there is “no ap­petite” among mem­bers of the more con­ser­va­tive up­per cham­ber to use the re­serve money. But she also hinted that us­ing the money for pre­vi­ously de­ferred main­te­nance of state in­fras­truc­ture might be con­sid­ered a one-time ex­pense, open­ing the door for com­pro­mise with the House.

“I per­son­ally wouldn’t ob­ject to us­ing rainy day for de­ferred main­te­nance needs that are health- and safety-re­lated that we can’t af­ford to pay for in the bud­get we just passed,” she said. “But again, that has to be a full Se­nate de­ci­sion.”

With fed­eral funds added in, the Se­nate com­mit­tee’s 2018-19 bud­get to­tals $217.7 bil­lion, which is a 0.7 per­cent in­crease over the cur­rent two-year bud­get. Af­ter fac­tor­ing in in­fla­tion and pop­u­la­tion growth, the new plan amounts to a 7.1 per­cent cut com­pared with cur­rent spend­ing, ac­cord­ing to the left-lean­ing Cen­ter for Public Pol­icy Pri­or­i­ties. The new Se­nate bud­get cuts deeply into higher ed­u­ca­tion, trim­ming 6 to 10 per­cent off the state money that goes to ev­ery public col­lege and univer­sity. It also leaves un­touched the state’s K-12 ed­u­ca­tion fund­ing for­mula, which will re­sult in a $1.4 bil­lion de­crease in the state’s share of the fund­ing as school dis­tricts’ share in­creases due to ris­ing prop­erty val­ues.

The Se­nate plan con­tin­ues the cur­rent $800 mil­lion fund­ing level for the state’s on­go­ing border se­cu­rity ini­tia­tive, which Democrats have been push­ing to cut in light of Pres­i­dent Don­ald Trump’s prom­ises to ramp up U.S. Border Pa­trol spend­ing.

In t he com­mit­tee-ap­proved bud­get, fund­ing for the scan­dal-plagued Child Pro­tec­tive Ser­vices in­creases by $430 mil­lion, a big­ger bump than was orig­i­nally pro­posed by Nel­son, and men­tal health ser­vices get a $240 mil­lion boost.

The re­serve, funded pri­mar­ily by oil and gas pro­duc­tion taxes, is the largest of its kind in the coun­try and is pro­jected to grow to $12 bil­lion by the end of the next bud­get cy­cle.


Se­nate Fi­nance Com­mit­tee Chair­woman Sen. Jane Nel­son, R-Flower Mound, with state Sens. John Whit­mire (cen­ter), D-Houston, and Royce West, D-Dal­las, on Wed­nes­day, said the trans­porta­tion pay­ment de­lay “solved a lot of our prob­lems.”

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