Lines drawn for bud­get show­down

House, Se­nate pro­pose sim­i­lar amounts, dif­fer on fund­ing meth­ods.

Austin American-Statesman - - FRONT PAGE - By Sean Collins Walsh scwalsh@states­man.com

The bat­tle lines have been drawn for a show­down over the state bud­get be­tween the Texas House and Se­nate, with the two cham­bers propos­ing to spend sim­i­lar amounts of money but pay­ing for their plans in dif­fer­ent ways.

The Texas House Ap­pro­pria- tions Com­mit­tee on Wed­nes­day unan­i­mously ap­proved a $106.8 bil­lion state bud­get for the next two years that uses $2.5 bil­lion from the rainy day fund, de­fers a $1.9 bil­lion pay­ment to the school fund­ing sys­tem un­til the fol­low­ing bud­get year and as­sumes $1 bil­lion sav­ings in Med­i­caid spend­ing due to fed­eral ac­tion.

The vote came a day af­ter the Sen-

ate unan­i­mously ap­proved its ver­sion of the bud­get, which spends $106.3 bil­lion in state dis­cre­tionary money, avoids tap­ping the $10.2 bil­lion rainy day fund and frees up $2.5 bil­lion by de­lay­ing a trans­porta­tion pay­ment un­til fis­cal 2020.

The gap be­tween the two cham­bers’ plans has nar­rowed, af­ter Se­nate and House lead­ers put forth ini­tial pro­pos­als that were $5.3 bil­lion apart. In­clud­ing fed­eral money and funds ded­i­cated for spe­cific pur­poses, the House plan spends $218.2 bil­lion and the Se­nate $217.7 bil­lion.

“In the world of this bud­get that we live in, that’s not too much money for us to get our arms around,” House Ap­pro­pri­a­tions Com­mit­tee Chair­man John Zer­was, R-Rich­mond, said of the roughly $500 mil­lion dif­fer­ence in the plans.

The over­all price tags, how­ever, mask dif­fer­ences in as­sump­tions that put them fur­ther apart than they ap­pear, and the two sides are still odds over how to stretch the state’s money in a tight bud­get year.

Due to low oil and gas prices cut­ting into state rev­enue and de­ci­sions made in the 2015 leg­isla­tive ses­sion both plans aim to spend less state money in the next bud­get cy­cle than in the cur­rent $108 bil­lion two-year bud­get. Af­ter fac­tor­ing in in­fla­tion and pop­u­la­tion growth, they amount to a roughly 7 per­cent cut from cur­rent spend­ing lev­els, ac­cord­ing to Leg­isla­tive Bud­get Board data.

State Rep. Donna Howard, D-Austin, said, “self-in­flicted wounds that we made last ses­sion” are the rea­son law­mak­ers can’t keep up with the needs of a grow­ing state.

“To many of us, this is the best we could do with what we have, but not some­thing to be proud of,” she said.

Ed­u­ca­tion spend­ing

One area where the House is push­ing to in­crease spend­ing is pub­lic ed­u­ca­tion. The House plan calls for $1.5 bil­lion in new fund­ing to the state’s school fi­nance sys­tem. The Se­nate bud­get leaves un­touched the cur­rent ed­u­ca­tion fund­ing for­mula, re­sult­ing in a $1.4 bil­lion de­crease in the state’s share of school spend­ing as districts pay more due to ris­ing prop­erty val­ues.

Dis­burse­ments from the House’s use of the rainy day fund, which is funded pri­mar­ily by oil and gas pro­duc­tion taxes and is pro­jected to grow to al­most $12 bil­lion by the end of 2019, in­clude al­most $670 mil­lion in bor­der se­cu­rity spend­ing, $500 mil­lion to help plug a short­fall in the re­tired teacher health care sys­tem and $187 mil­lion for state hos­pi­tals and sup­ported-liv­ing cen­ters.

Led by Lt. Gov. Dan Pa­trick, fis­cal con­ser­va­tives in the Se­nate have said the rainy day fund should only be used dur­ing nat­u­ral dis­as­ters or for one-time ex­penses.

For­mer law­mak­ers and Capi­tol staffers who drafted and ap­proved the fund in 1987, how­ever, have said that the in­tended use was to smooth out the in­evitable ups and downs in­volve in man­ag­ing and bud­get­ing in a state de­pen­dent on the boom-or­bust en­ergy in­dus­try.

Snip­ing be­tween the cham­bers

In lay­ing out the new House pro­posal Wed­nes­day, Zer­was took a jab at the Se­nate’s plan to de­lay a $2.5 bil­lion trans­fer of gen­eral sales tax rev­enue that law­mak­ers and vot­ers in 2015 de­cided should be ear­marked for high­way projects in the 2019 bud­get year un­til fis­cal 2020. Zer­was said the move would vi­o­late a pro­vi­sion in the Texas Con­sti­tu­tion re­quir­ing that the sales tax trans­fer oc­cur in the same fis­cal year that it is col­lected.

“The (House) bud­get does not rely on bud­get gim­mickry that puts the state’s in­vest­ment in trans­porta­tion at risk,” he said.

The House’s plan to de­lay a $1.9 bil­lion monthly pay­ment to the Foun­da­tion School Pro­gram un­til the first month of 2020, an ac­count­ing ma­neu­ver the Leg­is­la­ture has made in the past, is dif­fer­ent, Zer­was said, be­cause there is no con­sti­tu­tional re­quire­ment the pay­ment be made within a cer­tain time frame.

Se­nate Fi­nance Com­mit­tee Chair­woman Jane Nel­son, R-Flower Mound, con­tends the Se­nate plan still al­lows the Texas De­part­ment of Trans­porta­tion to spend the money in the 2019 bud­get year. The Con­sti­tu­tion, she said, con­tains con­flict­ing lan­guage on how to han­dle the trans­fer.

“The Se­nate is not will­ing to de­fault on a com­mit­ment that 83 per­cent of Texas vot­ers ap­proved,” Nel­son said. “This is con­sti­tu­tional — and com­mon sense.”

TAMIR KAL­IFA / AMERICANSTATESMAN

Leg­isla­tive aides dis­trib­ute the House bud­get bill Wed­nes­day be­fore a com­mit­tee meet­ing at the Capi­tol.

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