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Senate Backs $5.7 Billion Plan for Roads, Water, Schools

After spending most of the day locked away in negotiations, the Senate unanimously approved a measure pulling $5.7 billion from the Rainy Day Fund for water and road projects and public education.

State Sen. Tommy Williams, R-The Woodlands, during a state budget debate on March 20, 2013.

Texas senators hammered out a sweeping deal to increase state funding for water and transportation projects and schools on Tuesday, tackling some of the thorniest issues of the legislative session all at once.

The senators voted 31-0 for Senate Joint Resolution 1, which would ask Texas voters to approve taking $5.7 billion out of the state’s Rainy Day Fund. Of that amount, $2.9 billion would go to transportation, $2 billion to water infrastructure projects and $800 million to public education.

“I woke up at 2:30 this morning worried about how I was going to get this bill out of the ditch,” said Senate Finance Chairman Tommy Williams, R-The Woodlands and the bill's author. “It’s a miracle.”

Senators also announced plans to allocate an extra $1.4 billion for schools that came about after the comptroller’s office informed the senators that property valuations have come in higher than previously estimated. Put together, the Senate's actions would restore $3.7 billion of the $5.4 billion in cuts to public education made in 2011, Williams said.

The deal was the result of day-long, closed-door negotiations among senators. Williams said Democrats and Republicans met separately for much of the day to “let people air their partisan concerns.”

How the House or Gov. Rick Perry will receive the proposals remains to be seen. Perry has said he does not support tapping the Rainy Day Fund — which contains oil and gas severance taxes — for education, and various House Republicans have echoed that sentiment.

The measure passed Tuesday is significantly different than what Williams originally proposed. His original plan had no money for education. The $800 million in the package approved Tuesday includes $500 million in formula funding and $300 million in merit pay for teachers.

On transportation, Williams had wanted to spend $3.5 billion on a State Infrastructure Fund that would either loan out money to local communities for road projects or help them borrow money more cheaply to fund the projects. Williams said late Tuesday that a majority of Senators made clear to him they were not interested in a plan that increased public borrowing.

The measure approved Tuesday will put $2.9 billion directly into the state highway fund, which the Texas Department of Transportation will use instead of issuing that much in bond debt. That will save the agency about $6 billion over the next 30 years in avoided debt service costs, Williams said.

Senators uniformly praised the measure and the various compromises all sides made in crafting it.

“We all gave up something when we signed up for this bill,” said state Sen. Dan Patrick, R-Houston.

Senate Democrats pledged their support while simultaneously trying repeatedly to amend it to put more money toward schools and to fund Medicaid expansion under federal health reform. All those amendments failed.

“We’ve made great strides in this budget process,” said state Sen. Kirk Watson, D-Austin. “I don’t want to lose that. I think it’s important that we restore some additional funding.”

Some Republicans expressed concern that the budget was pulling too much out of the Rainy Day Fund. The fund is projected to contain $11.8 billion by the end of the 2014-15 biennium.

“While it may not be as strong as I would like it to be, I still believe it is a strong RDF balance,” said state Sen. Brian Birdwell, R-Granbury.

Lawmakers have debated all session how much the state should preserve in its savings account. The Senate plan would leave just over $6 billion in the fund. Perry has said he believes $7 billion is more appropriate.

After it passed, Comptroller Susan Combs endorsed the plan, describing it as “an ideal, one-time use of taxpayer dollars.”

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Economy State government 83rd Legislative Session Budget Governor's Office Rainy Day Fund Texas Legislature Water supply