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Lacking Governor's OK, Pitts Adjourns Rainy Day Fund Hearing

House Appropriations Chairman Jim Pitts, R-Waxahachie, thought he had a deal with Gov. Rick Perry and his staff to tap the Rainy Day Fund to close the current biennium shortfall. But with no public support from the governor's office, Pitts adjourned his hearing.

State Rep. Jim Pitts, R-Waxahachie, lays out House Bill 1.

An impromptu hearing on Monday afternoon with House budget writers turned into a waiting game that left the chairman of the committee feeling a bit stood up by the governor. 

“Well, left at the altar, maybe,” said House Appropriations Committee Chairman Jim Pitts, R-Waxahachie, after telling his members and the audience he was waiting for Gov. Rick Perry’s staff to call or text during the hearing to offer his green light on tapping the state’s Rainy Day Fund. The call never came, and neither did anyone from Perry's staff. Pitts said he believed that he had worked out a deal with the governor on the issue.  

“Our understanding is they were coming. We need them to be crystal clear [about where they stand on tapping the Rainy Day Fund] for a lot of people on this committee,” Pitts said. 

The hearing lasted well over an hour, during which time the comptroller’s staff was asked to testify before committee members. Some representatives still balked at the idea of resorting to using the savings account at all. Pitts assured them HB 4 and HB 275 would only address the current biennium's shortfall — and does not signify the Rainy Day Fund will be used to reduce the next biennium’s budget shortfall of between $15 billion and $27 billion. That upset some Democratic lawmakers like Rep. Mike Villarreal, D-San Antonio, who said he will tell his constituents that this Legislature cut scholarships for students. 

At stake is the state’s ability to pay its bills for the remaining five months of the fiscal year, which ends in August. Comptroller Susan Combs added $300 million to her estimate of what the state will bring in during the next two years — based on higher sales tax returns. But the state still faces a $4 billion deficit in the current budget. Pitts said that unless those bills are paid, state workers could be furloughed and school days could be cut short. 

Lawmakers are stuck with few options. They can authorize use of the Rainy Day Fund, defer payments or raise revenue. They could also cut the budget, but with only a few months left in the fiscal year, finding enough in savings to cover the deficit would be very difficult. Meanwhile, many lawmakers have pledged not to raise taxes or fees this session. 

Pitts told reporters after the hearing he still believes he has the 90 votes necessary to get the bills out of the House, but that he wants the governor to publicly support pulling funds from the Rainy Day Fund. He tried to make the bill more palatable to conservative members of the committee by telling them nearly $6 billion would be left in the account. 

Political theater in the hearing reached its peak toward the end of the meeting, when Pitts reported to the audience, "We've called every budget person in the governor's office — and no one is answering their phone."

Lacking Perry’s blessing, Pitts adjourned the meeting and said he would try again Tuesday.

On Monday evening, the governor's press secretary, Katherine Cesinger, responded to our request for a comment. 

"The governor’s office testified and answered members’ questions for several hours at the last committee hearing. Today, the governor’s office received a last minute request to appear before HAC with no information on the issue they wanted to discuss," Cesinger wrote in an e-mail. "The governor has always felt the Rainy Day Fund should be used as a last resort and only for non-recurring expenses.  The governor and our office continue to be very engaged in the budget balancing process and will continue to work with lawmakers on closing the FY11 gap."

Update: The House Appropriations Committee canceled two meetings scheduled for Tuesday morning. 

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State government 82nd Legislative Session Budget Rainy Day Fund Texas Legislature