Liveblog: Senate Debates Budget Bill

Sen. Steve Ogden, R-Bryan, just offered opening remarks. He says the Senate Finance Committee has worked hard to produce a bill that is acceptable to all. "It meets the essential needs of our state" without raising taxes, he says.

"The economy is coming back and it's coming back faster than the comptroller said in January," Ogden says.

"It is a far better budget than any alternative that's out there. It's a far better budget than any reasonable alternative in the future."

Other senators are talking now, Florence Shapiro, R-Plano, in support of the education provisions. Jane Nelson, R-Lewisville, in support of the health and human services section.

Shapiro: "The alternative to this bill represents a permanent and unsustainable blow to public education."

Van de Putte says she hasn't seen a harder working and diligent finance committee in her 25 years as a legislator. There's a "however" coming. "I do have some questions," she says.

Ogden started by telling lawmakers that if they vote to suspend — to take up the budget bill for debate — he'll take out the provision that would dip into Rainy Day Funds if state revenue comes up short. He'd reduce Medicaid spending by $1.25 billion (more on that in a second), and would include a contingent appropriation equivalent to a 1.2 percent across-the-board spending increase in everything except public education and debt services.

The across-the-board cuts would take place if the comptroller says the money isn't available; if it is, those cuts won't happen.

And the Medicaid cuts are a sleight of hand: Lawmakers will be back in January 2013 and if Medicaid comes up short — by, say, $1.25 billion — they'll take care of it then. In fact, the budget without any changes pushes $3 billion in Medicaid spending off for the next Legislature to deal with.

Van de Putte just asked Ogden whether this proposed budget would mark the first time the state hasn't funded enrollment growth for public education. Ogden's response: I don't think it's fair to say this is the first time... because there are so many other variables." Ogden points out his bill proposes just about half the cuts proposed in the House's public education budget.

Here's the play on the two-thirds rule in the Senate. It takes a two-thirds vote to consider bills out of order, and the Senate regularly has a "blocker bill" at the front of its agenda. Thus, it takes 21 of the 31 senators to bring something up for debate.

But on every other day, the Senate's calendar starts with House bills. And there's apparently no blocker in front of House Bill 1 — the budget — if it's considered on a "House day." Today is a Senate day, and if they've got 21 votes, they'll proceed with the debate. If they don't, they can bring it up tomorrow with only 16 votes.

If you don't have it in your head, here's the partisan arithmetic: The Senate has 19 Republicans and 12 Democrats.

Leticia Van de Putte asks how the Senate can write a budget without taking into account 180,000 students (other estimates are lower, in the range of 160,000) expected to join the schools over the next two years. Ogden says enrollment growth is funded if the Legislature also passes SB 22, which remodels school finance formulas in Texas.

Ogden says that over half of the difference between the House and Senate budgets goes to public education.

"If we take the position … that nobody can cut anything, that there are no efficiencies that can be found anywhere, then we're no different than Washington DC, which is bankrupting the country," Ogden says. "If the economy continues to grow… we'll be able to restore some of this in two years."

Ogden was commenting the other day on third parties and their influence on senators of both parties. With him proposing to pull Rainy Day money out of the budget, they're coming to his aid. This just landed, from former House Appropriations Chairman Talmadge Heflin, who's now with the Texas Public Policy Foundation:

"The Texas Public Policy Foundation welcomes the news that the Texas Senate may shortly consider a 2012-13 budget bill that does not include use of the Rainy Day Fund. This is a credit to the hard work and persistence of Sen. Steve Ogden and the Senate Finance Committee.

“The Foundation has consistently opposed use of the Rainy Day Fund for ongoing obligations, in the belief that cutting excessive spending and living within the state's means is the best way to a sound budget. We are pleased that the Texas Senate will have an opportunity to enact a budget that is consistent with this approach."

Shapiro frustrated that SB 12, a bill authorizing furloughs and eliminating other so-called unfunded mandates, doesn't have the votes to make it to the floor.

Conversation now is about whether teachers will have to be fired if this budget passes (school districts around the state have notified some teachers that they won't be renewing their contracts in light of coming budget cuts). Shapiro says the Senate should pass her SB 12, which she says would solve the problem. But it's been stuck: "I cannot get that bill off the floor of the Texas Senate."

Van de Putte responded to Shapiro’s frustration over SB 12, saying those measures could help in future years, but right now, districts “don’t want to use a reduction in payroll. They don’t want to reduce teacher’s salaries. They want the flexibility to do what they need at the local level.”

Royce West, the Dallas Democrat who voted for the budget coming out of committee last month but isn't for it now, says the Rainy Day change is not to his liking. If the comptroller says we're short by $3 billion, then we take that out of the Rainy Day Fund, he says. Without that backstop, he says, the state could fall short on public education and other programs. He says the Legislature has the money to sustain programs — in that fund — if it has the will.

Shapiro: "The idea that we're not fully funding public education is one that we're going to have to agree to. ... Is it enough? Probably not. Is it devastating? Absolutely not."

Shapiro: "This is not a perfect bill, but let's not let perfect get in the way of good."

Shapiro: "Rainy Day is a one-time stimulus money... why would we spend it at this point when we very well may need it next time?"

Shapiro emphasizing that the Senate budget contains $4 billion more than the House for public education. "We've got to stand tall for the Senate education budget," she says.

Whitmire tears into Shapiro's idea that her education bill would reduce pink slips for teachers.

The alternative to this is SB 12, which gives us furloughs, reductions in pay, and firings," he says. "That's not the kind of options that the great state of texas presents to the school districts.

"We ought to stop our discussion right now if we can't come up with a better alternative than that."

John Whitmire, D-Houston, asks Ogden what's changed since he got out of committee, with Rainy Day money in the bill, and now.

"I didn't have 21 votes on Friday," Ogden says. "I'm hoping I have them today."

He couldn't get the support needed with that money in, so he's trying now without it.

Ogden says he’ll add an amendment to cut 1.25 percent of general revenue across the board—an additional $690 million—if revenue is short.

But state agencies cannot absorb additional cuts, Whitmire says. Already being cut 29 percent, Texas Parks and Wildlife will have to change park hours, sell parks, or turn parks over to cities and counties for management, says Whitmire. “How would Texas Parks and Wildlife absorb additional cuts?” he asked Ogden.

Whitmire asks why ending the tax exemption for high-cost gas incentives aren't included (one estimate is that they'd bring in $1.9 billion). Ogden says he thinks those should be tied to prices, so there's an incentive to drill when prices are low, and it stops when prices are high. And, he says, he'd vote a white light (meaning he'd abstain) since he's in the business.

Whitmire: "I don't think we have to surrender to the circumstances." He says he's willing to vote for spending cuts, but that he'd vote to use the Rainy Day Fund and that he thinks senators should have pressed harder to raise more "non-tax revenue".

Ogden, asked by Kirk Watson, D-Austin, why he's not willing to use the economic stabilization fund — that's the name on the Rainy Day Fund's birth certificate — in this budget that's been knocked down by economic instability: "Where the debate is, among conservatives, is whether the rainy day fund should be used for future spending or only for current spending. And he says the Constitution makes it easier to use it for current deficits."

Ogden tells senators the debate on using the rainy day fund can wait: “This rainy day fund debate belongs on HB 4.” As an appropriations bill, senators don’t have to determine all the methods of finance—yet, he says. Certain bills, like SB 22, will have to pass in order for the budget to work, but “it is not necessary to put a rainy day fund contingency in this budget,” Ogden says.

Rodney Ellis, D-Houston: "If you don't have the votes to bring this up today, what happens?" Ogden: "Well, I don't know. I don't know."

Ogden doesn't want to push the idea of getting 16 votes tomorrow (a House day; see the earlier entry) if he can't get the customary two-thirds today. "If we cannot suspend with 21 votes, then I am worried about the traditions of this Senate," he says. That's why he's been trying so hard to get 21, he adds.

“I don’t think the choices that were made in this document...reflect a consensus in this body,” says Ellis. Senators haven’t reached “that sweet spot,” as they’ve referred to it in private — that establishes spending levels at least 21 senators will vote for, he says.

Texas voters “didn’t send anybody down here to start raising revenue,” says Ogden. Senators need to respect the “very loud and clear” message legislators received from the election last November, he says.

But Davis says current revenue isn't enough: The legislature hasn’t found a way to make up for revenue lost for public education when they compressed property tax rates and replaced that revenue with a lesser grossing margins tax. SB 22 says to voters, “we never could make it up to you,” she says. Constituents will be told, instead of making up funds, the state is going to “permanently institutionalize funding you with less,” Davis says.

Senators have expressed concern to Ogden about changes that will be made to the budget once it goes to conference between the House and Senate. But Ogden says without agreement in the Senate, he won't be able to gain traction in conference to fight for the Senate version. “The more members that vote for this budget, the easier it’s going to be for me to fight for it,” he says.

The fight will be hard regardless, he says, because the consensus coming from the supermajority of the House gives them “a huge negotiating advantage.”

Ogden: "We were not sent here to protect the two-thirds rule. We were sent here to govern. People in the state of Texas don't give a diddly about the two-thirds rule."

Dan Patrick, R-Houston, compares the state of Texas to a camel, and congratulates Ogden for getting the camel through the eye of the needle.

He says the Senate's budget is better, and says he thinks "the House wants to join us, and we need to give them a path." Patrick's against spending the Rainy Day Fund, but also wants to fund public education. He voted against the plan coming out of committee, but says he'll vote for it with Ogden's promise that RDF is coming out.

We're hearing now from Juan "Chuy" Hinojosa, D-McAllen, the vice chairman of the finance panel. He was one of two Democrats who voted to get the bill out of committee, but with the RDF money coming out, told reporters earlier today that he'll vote against bringing it up for full debate on the floor.

"Let’s face it, we are raising taxes with this budget,” Rodriguez tells senators. The current version of the appropriations bill is “passing the buck to local government,” he says. The most hurt will be cities and counties that lack the tax base to raise enough extra revenue to pay for unfunded mandates, he says.

Sen. Carlos Uresti, D-San Antonio, is asking questions now; he's the last of the 12 Democrats to do so, and it's possible that the Senate will vote fairly soon on whether to "begin" debating the budget. They've been talking about this for three hours so far.

Williams says it looks like there will be a partisan “lock down” on the budget, and expresses sympathy for Ogden’s position as Chair of the Finance Committee.

“This is not a partisan divide that was made by the Democrats. We voted on the bill coming out of committee,” Royce tells Ogden. Removing the contingency to use money from the Rainy Day Fund (to get the hold-out Republican, Patrick’s vote) created the divide, says West.

Tommy Williams, R-The Woodlands, says Ogden is facing the first partisan vote any Finance chairman has ever faced. "You've been a lot more gracious about this than a lot of us would have been."

West pushes back, saying Ogden got a bipartisan bill out of committee and then ran into Republicans who balked at the RDF provision. He says the Democrats came in asking, "Can we get some assurance on the backside that we're not going to get rolled? That's what we're talking about. And then we have speeches about partisanship on the floor."

This had been rolling along without the partisan stuff, although twelve Democrats in a row stood up to speak against the budget.

Ogden's closing, with an appeal to the Senate's history. "We have always been able to come together and unite," he says.

"I asked, when I was elected your president pro tempore, to leave your politics at the door."

"Outside groups have penetrated this Senate, and we are a weaker body for it."

Ogden: "This is going to be a sad day in this state, if we can not get 21 votes to suspend. It will be a sad day for the Senate."

The Senate votes 19-12 on partisan lines not to bring up the state budget for debate.