After final debates in the House and Senate, Texas lawmakers passed a two-year state budget on Saturday that cuts $15.2 billion from current spending — most of that in health and human services — but avoids increased taxes and leaves $6.5 billion untouched in the state's Rainy Day Fund.
The vote in the House was 97-53 and 20-11 in the Senate.
Our liveblog of the debate begins right after this description of what's in the budget approved by House and Senate negotiators. (Scroll down for updates.)
Still ahead is a Sunday vote on a critical piece of legislation — SB 1811 — that provides $3.5 billion in non-tax revenue for the 2012-13 budget and that revises school finance formulas to cut $4 billion from what the state would otherwise owe public school districts — and that's not counting funding for the estimated 80,000 new students that enter Texas schools each year.
The proposed 2012-13 budget is $15.2 billion smaller than the current budget. That's an 8.1 percent cut in all funds spending — a modern record — and it's an even bigger cut when inflation and population growth are figured in.
The biggest cuts are in education and in health and human services, which together make up 75 percent of the total budget. The proposed budget cuts 17.2 percent, or $11.3 billion, from health and human services, and cuts $844 million from public and higher education. What amounts to 1.1 percent cut comes from removing funding for discretionary grant programs for full day pre-kindergarten, remedial reading and math tutoring, and library resources. But on top of that, as part of the budget package, lawmakers will vote Sunday on a new set of school finance formulas. Without that change in law, schools are due to get $4 billion less than they'll get under current law.
Higher education gets a cut of about 4.3 percent.
The health and human services cuts are deceptive. Budget writers lopped $4.8 billion off of their estimates of what Medicaid will cost over the next two years. The idea is that costs might drop because of changes in law, including new managed care provisions passed by the Legislature, or that a recovering economy will simultaneously increase state revenue and lower the need for services. Lawmakers return in 2013 for their next regular session, and if neither of those things happen, they say, they've got at least $4.8 billion set aside in the state's Rainy Day Fund to cover their bet.
So-called general revenue spending — the part of the budget that comes from state taxes and other state revenue, totals $86.8 billion, or $1.6 billion less than the current budget. That difference would be larger if federal stimulus money was added back in. Lawmakers balanced the current budget with that federal stimulus money; general revenue spending, if that's included, is $9.9 billion smaller in the new budget than in the current one.
The higher education cuts include $180 million in formula funding and a 10 percent reduction to health-related institutions. Community colleges don't lose any formula money, but they and the other institutions don't get any money for expected larger enrollments. Special items funding at state colleges and universities gets cut by 25 percent, or $215 million. Financial aid for students is gut by $150.4 million, including cuts in TEXAS Grants, Texas Equalization Grants, scholarship grant sand B-On-Time funds. The state is cutting what it spends on group insurance for higher education employees by $99.3 million.
The budget for border security nearly doubles, to $219.5 million from $111 million in the current budget.
Funding for the Texas Emission Reduction Plan will drop 43 percent, or $98.3 million, in the new budget. Grants for local parks disappear, and state funding for two small but high-profile programs — boll weevil eradication and brush control — are being halved.
Business and economic development programs are being cut by $2.7 billion, most of it federal money, including some stimulus funds that are no longer available.
Spending on transportation will increase $3.9 billion, including $3.3 billion in general obligation bond proceeds.
"This has been the single most challenging process I have been involved in since running for the Texas House. "
He says, "We will not be short more than $5 billion under the most pessimistic scenario that I'm aware of."
"We won't use the word severe, let's use largest," responds Ogden.
Pitts: The only fees we increased since we left this chamber was bills that passed this chamber, and bills that passed the Senate chamber, that increased fees to pay for certain projects. I think it was $23-25 million.
It brings in about $4 billion less than anticipated, Ogden says, and that is making it much more difficult to keep property taxes low.
"Behind Medicaid," he says the business tax, "is the single biggest problem I can think of."
These funds are not included in HB 1 and are not part of the school finance package being presented to legislators. Because we are preparing to consider legislation and a budget that negatively impacts our school districts by $4 billion, we request the Legislative Budget Board provide a revised analysis without the Edujobs funds to more accurately reflect the impact our local districts will feel upon passage of HB 1 and SB 1811.
"So this budget is a budget that lives within our means and does not raise taxes?" he asks. "Yes," Ogden says.
And here we go with the vote.
"When we started this process, liberal interest groups were clamoring for a $10 billion increase in spending. The Texas budget shows Washington and the other 49 states that it's possible to make government live within its means without raising taxes. This budget makes a historic $15 billion cut from current spending, while still providing ample funding for our good teachers, our school children and our seniors."
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