Lean budget bill starts spending talks in Texas

AUSTIN, Texas (AP) -- Republican lawmakers proposed early budget drafts Monday that would keep in place deep spending cuts to Texas schools but leave about $5.5 billion on the table, measures they called careful starting points in their efforts to limit spending and push tax relief this session.

Both the House and Senate also are opening budget talks with no new money for the state's beleaguered $3 billion cancer-fighting effort, further clouding the future of the Cancer Prevention and Research Institute of Texas as the agency reels under a criminal investigation.

Critics pounced on the lean proposals as tantamount to more spending cuts on top of the nearly $15 billion lawmakers chopped in 2011. Republicans said their proposals fund public school enrollment growth for an estimated 170,000 new students in 2014-15, but some budget observers argued that math only works if Texas once again decreases per-student spending.

Republican Lt. Gov. David Dewhurst said the Senate bill ensures that a roaring Texas economy will keep adding jobs.

"To maintain that opportunity, we need to make sure to keep our spending under control, fund our priorities and keep our taxes low," Dewhurst said.

The House budget bill comes in at $89.1 billion and the Senate's at $88.9 billion. Both are expected to be filed Tuesday, and the nitty-gritty details of the proposals were not immediately released.

When lawmakers returned to the Capitol last week for a new session, they were greeted with a sunny $101.4 billion revenue forecast to spend on the next two-year budget. Coupled with a nearly $12 billion projected balance sitting in the Rainy Day Fund, teachers and Democrats were hopeful of restoring at least some — if not all — of the $5.4 billion cut from classroom spending in 2011.

But Gov. Rick Perry made clear last week there were no promises to roll back any of those reductions, and the budget bills unveiled Monday appeared to deliver on that warning.

The budget proposals are significant but are merely a starting point for negotiations leading to May — a fact underscored even by the Republicans who introduced the bills. Dewhurst, for instance, left the door open for budget-writers to go back and fund CPRIT if lawmakers are able to beef up oversight and restore confidence in the troubled cancer agency.

Democrats recognized the bills as a first draft, too, but that didn't blunt their frustration.

"I'm disappointed the first draft of the budget continues the historic education cuts," said Rep. Mike Villarreal, a San Antonio Democrat.

Eva DeLuna Castro, a senior budget analyst for the progressive Center for Public Policy Priorities, had not immediately seen the full proposals Monday. But she said the only way the state could fund enrollment growth under the numbers announced — $53.6 billion total for 2014-15 — was by cutting per-student spending statewide. That's what lawmakers did in 2011, reducing funding by $538 per pupil while facing a $27 billion total budget shortfall.

DeLuna Castro has estimated that lawmakers need to pass a $96 billion budget this session just to maintain state services at the current levels and keep up with population growth.

"This comes nowhere near what is needed to fix our schools, ensure access to health care and do something about congestion on our roads," she said.

The decision to appropriate no new grant money to CPRIT came as somewhat of surprise. Although both Republicans and Democrats have been lining up to blast the embattled agency in recent weeks, lawmakers have mostly called for stricter oversight instead of cutting off funds entirely.

CPRIT is under a moratorium from handing out any taxpayer money while prosecutors investigate an $11 million grant to a private company. Agency leaders approved the award in 2010 without reviewing or scrutinizing the proposal, and the discovery in October was the last in a series of yearlong problems that resulted in sweeping resignations.

Republican Rep. Jim Pitts, chairman of the budget-writing House Appropriations Committee, said the Legislature is expected to pass a $6.8 billion supplemental spending bill in the coming weeks that will settle holes in the current budget. Most of that is in the form of a $5 billion Medicaid tab from last session.

The Senate proposal reflects a 1.8 percent increase in general-revenue spending compared to the current budget. Pitts said the House proposal covers Medicaid caseload growth for the next two years.

"For us to think that we can go back to the same spending levels that we did before the recession is unrealistic," said Democratic Sen. Juan Hinojosa, vice-chairman of the Senate Finance Committee.

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