Deadlines start to bite as state legislators stall on big-picture spending items

Posted by Jon Weist, on Sun May 05 2013 at 10:41 PM

As deadlines loom in Austin, state legislators demonstrated last week that they are perfectly willing to throttle down on approving on what everyone thought was agreed-upon priorities in favor of scoring ideological and partisan points.

With the last day for House bills to pass on at least second reading on Thursday, Democrats and some tea-party affiliated Republicans last Monday sent the bill that would pay for the state’s water plan – one of those assumed-to-be-agreed-upon priorities – down to defeat on a technicality.

House Bill 11 by Republican Allan Ritter proposed to take $2 billion from the economic stabilization fund – the rainy day fund – to establish a revolving account to provide loans and subsidies for local water projects. A rainy day fund allocation takes two-thirds of the available votes to pass, and that requirement allowed Democrats to take a run at putting their priority – restoring all of last sessions’ $5.4 billion in public education cuts – on the table as a bargaining chip. Democrats are seriously in the minority in the Texas House, but they have enough votes to block a two-thirds majority.

Republicans, sensing a way to blame Democrats for the bill’s failure, proposed an amendment that said, basically, if this bill doesn’t pass, we’ll take the $2 billion proportionately from other programs, including the very education accounts Democrats were trying to increase. The contentious debate ended up being mostly on the amendment, proposed by House Republican Caucus Chair Brandon Creighton, but after about three hours a technicality was noted, knocking the bill off the calendar.

And that didn’t even get to the argument that was ready to be served up by other Republicans, who wanted to cut other, unspecified programs to pay the rainy day bill. A group of Republican had freshmen had already tried that trick during the debate on the House budget bill, offering amendments to move money from programs they didn’t think were priorities – including, notably, a fund matching private sector technology research at state universities that has been tapped by the University of Texas at Arlington. Those efforts went nowhere, so it’s hard to imagine that running the same play on a different piece of legislation was going to bear much fruit.

But the underlying issue that lurks in the session’s final three weeks is how to pay for what everyone says they want with Democrats calling up the education shortfall on every bill and ideological Republicans unwilling to break the cap on state spending, a real but seldom important line that has been crossed in past sessions with no discussion at all. Even Governor Rick Perry, whose conservative bona fides are not in question, has shrugged off concern about busting the spending cap.

The cap, a number decided on last fall by the legislative budget board, is a formula that varies depending on which one the LBB picks, but it’s a variation of a limit on what percentage over the current budget – and only some of the spending in the current budget – can be spent. The Republican faction taking up the no government expansion, no spending, fee or tax increases ever wants to use the limit for their philosophical reasons, and you can bet they will use it in Republican primaries against any member who votes to bust the cap, whether they have the political cover Perry says he will provide or not.

With current revenue estimates, the spending cap can’t be broken at all without dipping into the rainy day fund, which LBB staffers ruled early in the session counts against the cap when added to the budget by legislators. If, however, rainy day appropriations come as a result of voters authorizing the spending as a constitutional amendment, then it doesn’t count against the cap.

The latter path is the one chosen by the Senate, which unanimously passed a massive constitutional amendment proposal – Senate Joint Resolution 1 – a couple of weeks ago. SJR dedicates $5.7 billion from the rainy day fund to the water plan, to transportation funding and to education. Since it requires a statewide vote, it gives lawmakers cover because it’s the voters spending the money, not them.

That approach, however, also seems doomed, as House leaders have all but dismissed the Senate approach. Appropriations Committee Chair Jim Pitts says it’s bad public policy to turn all rainy day fund allocations into constitutional amendments, and Speaker Joe Straus has indicated within the last week that SJR 1 may not see a vote on the House floor.

So with revenue up and a lot of pent-up need begging for more spending, at this point lawmakers are too tangled up in ideology and partisanship to see their way to clear to address the needs of this still-growing state. In free-wheeling, high-welfare spending states this turn of events might make some sense, but Texas has never been one of those states. While some call for ever-deeper reductions in spending and restrictions on the growth of public spending, it seems odd such a message prevails given the state’s growth and it’s Scrooge-like approach to funding programs – health care, education – has always carried the day.

And that approach does not extend to tax breaks. Various bills creating or extending tax incentives have made it through the House, all of which reduce the amount of money the state collects. Democrat Sylvester Turner of Houston, vice-chair of the Appropriations committee, asked for an accounting of the cost of tax breaks while on the floor last week. While none was forthcoming, Turner’s back-of-the-envelope math put the number at close to $1 billion, with what could be a special-interest feeding frenzy still to come on Tuesday.

Legislation changing the way some businesses are identified in the margins tax regime and changing rates for others, comes to the floor in the form of House Bill 500. Ways and Means Committee Chairman Harvey Hilderbran has tried to restrict debate on the bill by requiring amendments be pre-filed by Monday and by inserting a rule designed to limit how much any other bill can change the calculation. However, if other tax breaks are added – it’s a near certainty they will be proposed – there is no limit on how much revenue the bill could take off the table. The current estimate for HB 500 is about $400 million.

With time running out, transportation advocates are searching for enough votes to get a measure increasing auto registration fees – the money would be dedicated entirely to the road-construction fund – out of the Calendars committee and on the floor. House Bill 3664 was voted out of appropriations more than a week ago, but leaders apparently won’t bring it to the floor without a clear signal a majority or near-majority will support it. It is a far cry from a sweeping transportation revenue bill advocates have been seeking for about a decade now, but it’s the only thing this session still moving to put money into a tapped-out transportation program.

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