Texas Budget Stuck Over Revenue Issues, Rainy-Day Fund

DALLAS — The Texas Senate’s $176.5 billion budget bill remained stalled in legislative limbo Friday over resistance to proposed revenue increases and continuing calls to tap into the state’s $9 billion rainy-day fund.

Sen. Steve Ogden, R-Bryan, said he did not have the votes needed to bring the Finance Committee’s amended version of the House’s two-year budget bill before the full Senate. The move to consider must be approved by two-thirds of the 31 senators — 19 Republicans and 12 Democrats.

The Democrats want to restore at least $6 billion of the $7.8 billion cut from state aid to public education in the House’ $164.5 billion budget bill.

Several Republican senators, as well as GOP Gov. Rick Perry, object to a provision in the Finance Committee’s budget bill that would take up to $3 billion from the rainy-day fund if state revenues over the next two fiscal years do not exceed current expectations. Ogden, chair of the Senate Finance Committee, said the budget bill would be considered this week.

The Senate approved several minor revenue-enhancing measures Thursday, but Ogden said Democrats won’t support bringing the budget measure up for debate without the rainy-day spending. Republican objections to proposed revenue increases contribute to the delay, he said.

“The only alternative if we don’t pass these bills is to start cutting the appropriations,” Ogden said. “This Senate is going to have to sit down and get serious about passing the budget and how we’re going to pay for it.”

The Senate version calls for spending $12 billion more than the House-adopted budget, but $10 billion less than the current two-year budget that ends Aug. 31.

Lieut. Gov. David Dewhurst said early last week that he opposed tapping the rainy-day fund for the fiscal 2012-2013 budget, but on April 27 he sent a letter to senators in support of the spending plan.

Dewhurst said he supports a budget that would be contingent upon revenue collections exceeding the current estimate by Comptroller Susan Combs of $77.6 billion. “I suggested we write a contingent budget provision, first appropriating any increase in state revenue certified by the comptroller up to $3 billion, but providing a back stop appropriation from the rainy day fund as a short fall guarantee, meaning that any shortfall would be covered,” he said.

“While each of us could point to something in the budget we would change, I am comfortable with the method of finance for the budget.”

Perry maintained his opposition to the Senate proposal at a news conference Thursday. He said the surplus should be maintained to cushion state coffers from a major natural disaster or economic ­downturn.

“If we had a major Category 5 storm that went into Corpus Christi or to Beaumont or to Houston, and we didn’t have those dollars to leverage against those losses, we would be bankrupt,” he said. “I’m not willing to do that.”

Perry said he did not trust projections by the Legislative Budget Board that the rainy-day fund could total $12 billion by the end of fiscal 2013 due to higher-than-expected energy prices. “I’ve lost so much faith in the LBB and their ability to estimate what’s going on,” he said. “We got some people who don’t know what they’re doing over there.”

The current official estimate is for a $9.1 billion balance in the emergency fund, but that was before the Legislature took $3.1 billion to balance the fiscal 2010-11 ­budget.

For reprint and licensing requests for this article, click here.
Texas
MORE FROM BOND BUYER