House Appropriations approves Rainy Day Fund use, supplemental bill

Today’s Floor Pass is a guest post written by Alexa Garcia-Ditta.

Well, today was the day Jim Pitts has been waiting for.

It only took several weeks, a handful of canceled hearings, getting stood up by the governor’s office and presumably hours of negotiation for the House Appropriations Committee chair to get Gov. Rick Perry’s public blessing to tap the Rainy Day Fund for the current biennium.

More than an hour and a half after today’s House Appropriations Committee hearing was supposed to begin (and just as he went live on a SXSW Facebook Live Chat), Perry released a press release saying that he, state Comptroller Susan Combs and House Speaker Joe Straus had reached an agreement to use $3.2 billion of the state’s piggy bank to close this biennium’s $4.3 billion budget gap. Another $300 million in higher-than-expected sales tax revenue and $800 million in cuts also help close the current deficit.

The key words here are “current deficit.” While Perry’s move helps heal the crisis for the budget cycle we’re in now (which ends on August 31, 2011) it does nothing to address the expected needs for the 2012-13 biennium. The next budget cycle has a projected shortfall of $27 billion.

“I remain steadfastly committed to protecting the remaining balance of the Rainy Day fund, and will not sign a 2012-2013 state budget that uses the Rainy Day Fund,” Perry said in his press release.

State Rep. Sylvester Turner, D-Houston, and his fellow Democrats didn’t take that well.

“For the teachers who came to this Capitol on Saturday and yesterday, for the medical providers who have been walking the halls, for all the children concerned about their needs, there’s nothing to be used from the Rainy Day Fund for their expected needs,” state Rep. Sylvester Turner, D-Houston, said once the committee gaveled in and read Perry’s statement. “I don’t want anyone to be under the illusion that this statement minimizes the impact of the cuts for 2012 and 2013.”

This afternoon committee members unanimously voted to use $3.11 billion of the Rainy Day Fund this biennium. Pitts also succeeded in getting his supplemental bill (House Bill 4) voted out of committee, which touts $856 million in “savings” from last year’s state agency budget cuts and reductions suggested by the governor’s office. While the Republicans voted in favor of both bills, the Democrats voted to use the Rainy Day fund but not the supplemental bill, voicing concerns over the proposed cuts.

The D’s also raised concerns about not using the Rainy Day Fund for the upcoming shortfall. Most though were quick to point out that they weren’t criticizing Pitts’ belabored efforts but the invisible budget “Oz” working behind closed doors.

State Rep. Mike Villarreal, D-San Antonio, argued that just using Rainy Day Fund money for the remaining six months of this fiscal year is “irresponsible.”

“I believe we need to pay our bills; it would be a financial disaster and an embarrassment to the state,” he said. “But I look at what we’re about to do, and it seems like we’re willing to tap the Rainy Day fund to save face but we’re not willing to tap it to mitigate the harm that’s about to be inflicted on our students’ education.”

State Rep. Scott Hochberg, D-Houston, worries that some will tout today’s decision as a victory for cutting spending, but in reality, he said, that’s short-sighted.

“I understand what’s being done,” he said. “But before any of us brag about finding [$856 million] in efficiencies and making state government work better, we have to admit that we’re passing some of the buck on to other people.”

Pitts took the licks, but calmly (and even with a few smiles) continued to make his case for balancing the current budget. The Waxahachie Republican told members and a crowded meeting room this afternoon that this has had one of the longest weeks (with arguably one of the hardest jobs) this session. He’s been fielding criticism from both sides—ultra-conservative groups have accused him of not making enough cuts while advocates for sick and low income Texans, not to mention teachers and parents, have demanded he not support widespread cuts to health and human services or education in 2012 and 2013.

“All my energies have been to take care of this current budget shortfall,” he said. “Now my energies will take care of House Bill 1.”

After weeks of negotiating with state leaders from their “no Rainy Day Fund use” to today’s compromise, in Pitts’ own words – “we’ve come a long way, baby.”

We may have come a long way, but we have an even longer way to go—the state is still about $24 billion short to maintain its current services for the next two years.