Leaders tussle over budget plans
Both proposals accused of using gimmicks, tricks
AUSTIN — The Texas House and Senate budget proposals are only $500 million apart, a minuscule amount when talking about spending more than $217 billion over the next two years.
The real gulf between the two chambers is how to pay for it, with each accusing the other of using accounting gimmicks and tricks to balance the books.
Under the Senate plan, the state would delay transferring $2.5 billion into a transportation fund for one month in 2018 to generate $2.5 billion in savings that would be used to avert deeper spending cuts in public schools, universities and health care programs. House Speaker Joe Straus, R-San Antonio, has accused Senate budget writers of “cooking the books.”
For its part, the House, under a plan initially approved Wednesday, would spend $2.5 billion from the state’s savings account — the so-called Rainy Day Fund — to shore up a revenue shortfall. It also would defer a $1.9 billion payment to the school funding system for a year and assume that not-yetapproved changes to the federal Medicaid program will yield another $1 billion in savings. Senate leaders accuse the House of hypocrisy.
“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 two plans. “At least in terms of total money spent, we have come very close to each other. We have chosen to find $2.5 billion in a very different way, but that’s just part of the conferencing process.”
Senate Finance Committee Chairman Jane Nelson, R-Flower Mound, said the upper chamber “is very confident” about the budget it approved by a 31-0 vote. “We are ready to sit down and get to work on the final product,” she said.
When they started out, the two chambers were much further apart, $5.3 billion overall.
The Senate budget passed last week totalled $217.7 billion, including federal money and other revenues from special accounts. The House budget to be voted upon in a week totals $218.2 billion.
In legislative parlance, however, nothing is close until it’s the same.
Because of rock-bottom oil prices and decisions they made two years ago to set aside $4.7 billion for transportation projects and to cut business taxes by $2.6 billion, lawmakers have about 7 percent less to spend in the next two years than they did in the biennium that ends Aug. 31.
Fighting over the state budget is nothing new, especially in lean times. Delaying approval until the final days of the legislative session, which ends in late May, used to be a bargaining chip to force an agreement.
Conflicting priorities
This year, both chambers’ budgets are expected to be completed well before mid-April, when the final stretch for legislating usually starts and horsetrading on bills intensifies.
For seasoned lawmakers in both chambers, the early fireworks over the budget year say more about the personal distance between Lt. Gov. Dan Patrick and Straus than they do about budget principles.
The two have never been in political lockstep. Though both claim the conservative mantle, Straus is viewed as a moderate, while Patrick walks proudly and loudly on the far right.
Lately, however, Straus has eschewed his usual measured tone in favor of more forceful critical assessments of the priorities of Patrick and the Senate.
His initial target was Senate Bill 6, the Texas Women’s Privacy Act, also known as the “bathroom bill,” which would require Texans use bathrooms in public buildings that correspond to the sex listed on their birth certificates. While Patrick has made it a cornerstone of his legislative priorities this session, Straus is not a fan of the bill and has little interest in moving it through the House.
When Patrick recently told a Dallas radio station audience that Straus was “out of touch,” the speaker jabbed back.
“He has a different audience,” Straus told the same talk show host. “I mean, literally an audience. He was in your business. He’s an entertainer, a talk show guy. And a statewide elected official. I’m not.”
When the Senate Finance Committee approved its budget plan days ago, Straus responded in unusually blunt language: “Counting money twice in order to balance a budget is not a good idea. This is the Texas Legislature. We are not Enron.”
‘How politics works’
Both chambers, Sen. Eddie Lucio, D-Brownsville, said, are following their leaders in the budget fight.
“When I came to the Senate in 1990, there were 23 Democrats here, a majority,” he said. “Some of them had their own agendas, and that made for what we’re seeing here now, only it’s Republicans. But that’s how politics works.”
In recent days, the differences have played out with Straus and Zerwas calling out the Senate plan. Zerwas on Wednesday charged the $2.5 billion transfer was unconstitutional, comments that rankled Senate leaders.
“The (House) budget does not rely on budget gimmickry that puts the state’s investment in transportation at risk,” Zerwas said.
Nelson blasted back, accusing the House of “borrowing money to increase spending” by delaying a $1.9 billion monthly payment to the Foundation School Program until the first month of 2020, a maneuver the Legislature has used in the past.
Zerwas said the House plan on the school funds is allowed that because there is no constitutional requirement the payment be made within a specific timeframe, unlike the Senate’s proposal to delay a $2.5 billion payment of the transportation funds.
Nelson said the Senate plan still allows the Texas Department of Transportation to spend the money in the 2019 budget year, and is allowable because the Texas Constitution contains conflicting language on how to handle the transportation transfer.
“The Senate is not willing to default on a commitment that 83 percent of Texas voters approved,” Nelson said, referring to the results of a 2015 election approving the transportation set-aside. “This is constitutional and common sense.”
Abbott absent
Tapping the Rainy Day Fund would “create a hole in the base budget next session (that) is not sustainable,” she said.
House leaders pointed out that the Rainy Day Fund was created in 1987 as a financial cushion to buffer against roller-coaster changes in the state’s economy that force massive cuts in state programs when boom goes to bust. This is exactly the time it should be used, they said.
Patrick and fiscal conservatives in the Senate have said the fund should only be used during natural disasters or for onetime expenses. Despite their hard-line stance, some Senate leaders have hinted they may consider using Rainy Day money for one-time projects.
Conspicuously absent from the growing budget brouhaha is Gov. Greg Abbott. Top aides said he is fine with staying out of the fray to see whether the two chambers can come together on their own, before stepping in to ensure a balanced budget is adopted that meets the state’s most pressing needs.
In a speech on Wednesday to the Dallas Regional Chamber of Commerce, Abbott was sanguine about the contentious budget process, which so far has hammered many of his priority projects with less-than-requested funding, particularly his pre-K initiative.
“The House has a plan, the Senate has a plan and anybody who knows anything about it realizes that the real plan is the one that will come out in conference committee,” he said. “And that will be sometime in late May.”