Texas House budget chief says deal in the works

AUSTIN, Texas (AP) -- A deal on a new Texas budget that includes $2 billion for a new state water fund and partly reverses historic classroom spending cuts appeared within reach Tuesday in a possible breakthrough between the House and Senate after talks had stalled.

"We're going to have a deal on everything," said Republican state Rep. Jim Pitts, the House budget chief.

The Legislature adjourns May 27. A spending deal between the House and Senate would not definitively avert a special summer session, but would resolve the biggest order of business left for lawmakers.

According to Pitts, the deal would track the Senate plan of $3.2 billion in restored funding for public schools that lost $5.4 billion two years ago. The new water fund, a bipartisan priority throughout the 140-day session, would be kick-started with a withdrawal from the state's Rainy Day Fund.

Pitts said the final details would be hashed out by Wednesday, but spent Tuesday racing from one meeting to the next with the state's top spending decision-makers. That includes Gov. Rick Perry, who did not stop to speak with reporters after emerging from one closed-door session.

"I think we're in good shape," Pitts said.

Perry told lawmakers he would haul them back to work in June unless they put a budget with $1.8 billion in tax relief and funding for the water plan on his desk. Since becoming governor in 2000, Perry has forced the Legislature to work overtime in four out of six biennial legislative sessions.

Several business tax-relief bills that have cleared the House add up to more than $1 billion, while the Senate is targeting a $731 million rebate from a long-collected energy surcharge. Democrats, who are in the minority in both chambers, have been insisted on restoring at least $4 billion for public schools.

Pitts would not yet reveal the fine print of the budget deal with his Senate counterpart, Republican Tommy Williams. Among the details that have yet to emerge is whether lawmakers will vote to bust the state's constitutional spending cap, which has so far been a deal-breaker in the Senate.

Pitts and Williams suspended talks for several days last week over differences in how to finance the state's biggest priorities. The Senate wanted to ask voters to approve drawing down $5.7 billion from the rainy day fund for water, roads and schools in a November referendum.

"My issue always has been is having the money constitutionally dedicated and inside the treasury. How the money got in there makes little difference to me," Williams said Tuesday. "My understanding is that (the House) agreed to that."

The House has balked at punting a decision over whether to drain nearly half of the rainy day fund to voters. Left unspent, the fund is projected to balloon to $12 billion.

"We were not going to do referendum-style government in Texas, like they do in California," Pitts said.

By late Tuesday afternoon, Pitts and Williams were back in Perry's office.

Most of the relatively smaller issues in the 2014-15 budget were approved by a panel of Senate and House negotiators Monday. Pitts said Tuesday that both sides remain more than $300 million apart on higher education.

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