Texas Senate Budget Spends Another $3 Billion From Rainy Day Fund
The Texas Senate Finance Committee has approved a budget that spends down an additional $3 billion from the state's Rainy Day fund, according to our political reporting partner the Texas Tribune. The 11-4 vote came faster than expected this morning, and it sets up a showdown between House and Senate lawmakers.
That's because House leaders have made it clear they will oppose using any more than the $3.1 billion in Rainy Day Fund money already approved to help balance the budget for the current fiscal year. The Senate's plan, championed by Senate Finance Committee chairperson Steve Ogden (R-Bryan), would increase Rainy Day Fund spending to $6.1 billion.
Ogden is likely more willing to spend down the Rainy Day Fund because of Legislative Budget Board forecasts that predict strong growth in oil and natural gas production, taxes on which fund the emergency savings account. Bloomberg News reports on how a rapid escalation in crude oil prices is fueling Ogden's optimism for Rainy Day Fund growth.
“That fund could easily rise to $12 billion,” Ogden said at a committee hearing. He based his estimate on revenue increases from taxes on oil and natural-gas production in the state as energy prices climb.
But the Senate plan is not expected to receive a warm reception from the more fiscally austere lower chamber, reports the Houston Chronicle's Peggy Fikac.
[T]he move could set up a face-off with the House, where Appropriations Chairman Jim Pitts said he doesn't see the necessary super-majority support to spend more from the [Rainy Day] fund than the $3.1 billion it has already approved. Gov. Rick Perry also has said he won't sign a budget that spends more from the fund.
So where does this Senate plan spend the extra money? Largely, public education. At the beginning of the legislative session, the Senate's first budget bill would have slashed K-12 education by almost $10 billion. Now, largely through Senate Bill 22, that number has been whittled down to about $4 billion. As the Texas Tribune's Thanh Tan reports, SB22 cleared the Senate Finance Committee yesterday in an 11-4 vote.
The legislation, authored by Senate Education Chair Florence Shapiro, R-Plano, would put $5.3 billion back into the Foundation School Program, which is the main source of funding for public schools. An additional $400 million would be available for textbooks and pre-kindergarten programs. Overall, Shapiro said they found the money by changing funding formulas for the schools. She said cuts would be made to every district, ranging from 1 percent to 8 percent, and averaging around 5 to 7 percent.
The Austin Independent School District has been predicting a budget shortfall of $94.4 million dollars for the next school year, a gap it has already slashed in half by eliminating more than 1,000 positions. AISD's deficit is based on a state cut to public education of $5 billion.