March, 2007:

After the opening snuff of multiple Democratic amendments, things got better from a Democratic perspective as an amendment to give teachers an across-the-board pay raise as part of the budget bill.

“Bottom line, members, do we want to give teachers a pay raise?” asked Rep. Rick Noriega. He offered the proposal to shift $583 million in funding from the incentive programs to the raise for teachers and other school personnel.

The Houston Democrat’s proposal passed 90-56 in the Republican-dominated House, which gave approval to the overall budget with a vote of 129-14 after 3 a.m. today. Now it goes to the Senate for consideration.

Defenders of the incentive programs — including top GOP budget-writers — worked hard to try to ward off the provision. They argued the switch could work against deserving teachers, provide a raise that’s less than intended and cost deserving campuses money.

Perry earlier Thursday, before the incentives were cut, had singled them out for praise: “I think the performance pay that is in this budget will put Texas at the top of the heap from the standpoint of a really strong, powerful message about competition in our public schools.”

Those who supported the pay raise said money for the incentive programs could be restored later. But, said Rep. Rene Oliveira, D-Brownsville, “This is the only time this session you will be able to vote for a pay raise for your teachers back home.”

Although the move still could be changed as the budget goes through the process in the House and Senate, it was a dramatic stand against the position of GOP budget writers on House Speaker Tom Craddick’s leadership team, including Rep. Warren Chisum, R-Pampa, Appropriations Committee chairman.

We all know how well the incentive pay thing went over here in Houston, right? Like Burka, I don’t necessarily think that incentive pay is per se a bad thing. My company gives out year-end bonuses that are determined in part by one’s performance (and by the company’s performance and some other factors). But it also gives out regular base-salary raises, and most of us get them annually. We’re all clear on why people were cranky about this, and why there was so much political will to do something about it, right? Look at some of the Rs who supported this. This wasn’t a rebellion so much as it was reality.

I’m getting to this very late (today was a busy day for me), so let me just point you to Vince‘s exhaustive listing of relevant amendments and how they were voted on, the Observer on Rep. Laubenberg’s controversial CHIP amendment (later withdrawn), BOR‘s budget recap, and Burka on how the teacher pay raise passed, and how the ParentPAC Republicans voted. See you tomorrow.

Note: See second update below

Whatever you may think of today’s budget bill, keep this in mind: It’s 100% the work of the Republicans, because Democratic amendments are being snuffed before they even get a chance to be debated.

The Democrats have a number of amendments to take money away from the Governor’s Texas Enterprise Fund. The money in the fund is not general revenue but is dedicated by an assessment on employers. Craddick sustained a point of order that these amendments violate the Calendars Committee rule.

The Ds are really mad about this, because their amendments in some cases were drafted by the Legislative Council–for example, Eiland’s amendment. The mistake, or the failure to realize the problem, was the Legislative Council’s. Craddick said to Eiland, in response to a parliamentary inquiry, that the responsibility for the mistake is the legislator’s, not the Legislative Council’s. Gallego went to the microphone to say that the traditional practice has been to let members cure errors. This was done during the special session, Villareal pointed out. Craddick said that this was not the policy of the chair. Eiland is really mad: You mean to tell me that these amendments were inappropriately drafted, and we can’t fix them. Craddick reiterated that it’s the member’s responsibility. Merritt went to back mike and pointed out that the head of the Legislative Council is a political hack. This is an old sore. Craddick had that slow, measure tone of voice that he uses when he is really furious.

The head of the Legislative Council is not just any old political hack, but as the Observer points out (by generously linking to this old post of mine), he’s a hack who’s a wholly owned subsidiary of one Tom Craddick. You’ll never find a bow tied up as neatly as that.

All that moots some of the latest Legislative Study Group analysis, but I’ll quote it beneath the fold anyway. Meanwhile, on a side note, today’s quote of the day comes from John Sharp, who says “I can’t think of anyone who knows less about [the new business] tax than David Dewhurst.” Click the preceeding link for context.

UPDATE More on the Craddick Hack here.

UPDATE: My bad. The stuffed amendments were not all of them, but a set of them having to do with Governor Perry’s Texas Enterprise Fund. As noted in the comments, some Dem amendments, like this one, were accepted. My apologies for the confusion.

(more…)

Today the House will take up the Committee Substitute for House Bill 1 (CSHB1), which is the state budget bill. I’m sure I’ll have plenty to link to and talk about later today, but for now, here’s two items regarding this budget that you might not see elsewhere. First, from Capitol Inside, some early responses from the Democrats:

On the eve of the House floor debate on a $150 billion two-year state spending plan, Democratic leaders said they have no plans to offer a full floor substitute like they did in the school finance battle in special session two years ago. But the Democrats indicated that they’d be giving their colleagues substantial opportunity to shift funds to items they see as higher priorities within the parameters of a Calendars Committee rule that prohibits the bill’s bottom line from growing beyond the total amount approved by the Appropriations Committee.

State Rep. Pete Gallego, an Alpine Democrat who chairs the Mexican American Legislative Caucus, said House Bill 1 in its current form would leave TYC spending at 2003 despite a sexual abuse scandal that has rocked the juvenile corrections agency and sent shock waves through the Texas Capitol.

State Rep. Ana Hernandez of Houston accused Republican budget-writers of essentially ignoring the explosive situation at the youth commission at a time when it’s quickly become the biggest crisis facing the state. Hernandez called the proposed spending on TYC “inexcusable” and “unconscionable.”

The spending bill that’s being sponsored by State Rep. Warren Chisum, a Pampa Republican in his first year as the Appropriations Committee chairman, would leave fewer Texas children with Medicaid and CHIP benefits instead of boosting the number of kids who have health coverage, State Rep. Garnet Coleman of Houston asserted. Coleman said health and human services spending in 2008 and 2009 would be about the same as it had been in the last budget that the Legislature approved when Democrats still controlled the lower chamber in 2001.

Coleman said that Republicans had found a way to spend a record amount of money without getting more in return than the state had received in exchange for the funds that it had been spending before deep cuts were enacted in the face of a record deficit in 2003.

According to State Rep. Abel Herrero of Corpus Christi, the House will be debating a state budget with $8.5 billion more available but out of reach despite a need for more funds for essential services. Republicans are putting some of a current surplus in reserve for property tax cuts while proposing to keep more than $4 billion in the rainy day fund.

Chisum and other members of the leadership team have been reluctant to earmark all of the funds that are available in anticipation of an upcoming federal court ruling in Medicaid suit that could cost the state billions of dollars.

And from the Legislative Study Group:

Writing a budget is the only task the Texas Legislature is required to accomplish each session. Spending priorities are typically debated side by side to allow members to make a more informed decision on how to appropriate state funds. The General Appropriations Act, HB 1, is intended to lay out how state dollars will be allocated for the next two years.

It became evident at the beginning of this session that tax cuts were the top priority. The first order of business was the passage of SCR 20 and HB 2, ensuring that the constitutionally imposed spending cap was lifted for the sole purpose of providing property tax cuts. To fund this priority, $8.1 billion from the Property Tax Relief Fund and $6.1 billion in General Revenue was spent. Before a budget was able to be reviewed by the full House, $14.2 billion was eliminated from the budget – funds that otherwise could have been allocated for important budget priorities – such as improving our public schools, providing health care coverage to Texas families, making college affordable, reforming TYC, maintaining our state parks and properly funding the state’s transportation needs. After the rush to pass out the property tax cuts, HB 2 has yet to be taken up in the Senate Finance committee.

This year, as state agencies were submitting budget requests for the coming biennium, they were instructed to limit their funding requests to 90% of their 2006-2007 budget. Items not able to be included in this “base budget” could be listed as exceptional items, in hopes of receiving additional funding to cover these expenses. A partial reinstatement of this initial 10% reduction was appropriated to some agencies, and could be misinterpreted by some as an increase in funding to that agency. Agencies were required to work up to meet their priorities – first by fighting to reach funding levels from last biennium, then fighting to maintain services with the growth of the state, and finally fighting for improvements to those services.

There is $8.5 billion in unspent GR left on the table that full House is unable to access – $4.3 billion in the Rainy Day Fund, $4.2 billion in unappropriated funds. Today’s budget debate is the only chance for the House to vote to fund the state’s priorities. After the bill leaves this chamber, conference committee members will ultimately decide the funding levels in the budget and House members will be only be allowed a straight up or down vote on the conference committee report.

Typically, all of the state’s spending for the upcoming biennium is done in the General Appropriations Act. This session, three separate appropriation bills have been introduced to account for spending in the 2008-2009 biennium. It is important to take into account all three of these bills when evaluating the state’s spending priorities.

-The main budget document, CSHB 1, appropriates $150.1 billion in All Funds, including $72.5 billion in General Revenue. This is an increase of $5.4 billion in All Funds and $4.7 billion in General Revenue from the current biennium’s budget.

-HB 2 spends $14.2 billion on property tax cuts, including $6.1 billion in GR.

-The Supplemental Appropriations Bill, CSHB 15, spends $224.4 million in funding for fiscal year 2008-2009, leaving $40 million in funds vetoed by the Governor unappropriated.

All told, the state is spending $164.5 billion for the coming biennium, leaving $9 billion unspent and leaving the state’s priorities fighting to keep up with growth.

More to come, so stay tuned.

I wish I could say I’m surprised by this, but I’m not.

Texas’ new business tax may bring in $500 million to $900 million less per year than originally projected, the state comptroller said in a draft letter to lawmakers that was obtained Tuesday by the Houston Chronicle.

When the business tax expansion was approved last year as part of a school finance package, it was expected to bring in about $3.4 billion extra per year to help subsidize local school property tax relief.

If you recall, the $14 billion in lost property tax revenue for the 2007-2008 biennium was to be made up by $6.8 billion in business tax revenue, $1.2 billion in tobacco and other tax revenue, and $6 billion of general revenue. What this means is that if this projection is accurate, that’s another $1 to $1.8 billion per biennium of general revenue that would be needed. Assuming that it could be taken from the $4 billion or so that Chisum and Company want to squirrel away for the next go-round, it wouldn’t have any immediate effect, but as with all things involving this irresponsible tax cut, the bill will come due soon and when it does it’s gonna suck.

“There could be some room for concern,” said Rep. Warren Chisum, R-Pampa, House Appropriations Committee chairman, who added that Comptroller Susan Combs may increase her overall revenue estimate.

“We know that we’re going to get some additional tax revenue, so we’re going to have enough money probably to cover it,” Chisum said. “The overall revenue estimate is not lowered and … very well could be raised by that much.”

Ways and Means Committee Chairman Jim Keffer, R-Eastland, said he expects lawmakers will “have more than enough to cover what we need to do. We just need to go through this bump in the road here to get us where we want to go.”

“But he’s got high hopes, he’s got high hopes/He’s got high apple pie, in the sky hopes”

Sorry. Couldn’t help myself. There’s no plans here, but hopes a-plenty. Given that the plan for the property tax cut going forward was to hope like heck that the business tax did better than expected, in some sense this is no change from the status quo.

Combs’ letter states, “As guarded as these less-than-definitive results may appear, they must be balanced against the overall fiscal condition of the Texas economy, which is still generating revenues above expectations so far this fiscal year.”

She said her estimate of revenue available for general-purpose spending remains unchanged at $82.5 billion, providing $14.3 billion in new revenue over and above revenues earmarked for specific purposes, including local tax relief.

The new business tax law required 3,404 entities to submit a report this year providing information on their expected tax liability under the new tax, which starts next year. Reports were submitted covering only about 2,500 of them and, Keffer said, “a lot of those that were filled out were filled out wrong.”

Combs has said previously there are no consequences in the law for “having guessed everything totally wrong.”

And with such precision methods as these, it’s almost hard to criticize Chisum and Keffer for waving their hands at Combs’ estimates. Maybe we should just take a cue from Tinkerbell and clap louder. At this point, it couldn’t hurt.

Burka revisits the subject of the Frew v. Hawkins class action lawsuit over Medicaid and the state’s obligations for same, which I last mentioned here. April 9 is fast approaching, and you should expect several shoes to drop once this one is announced.

Meanwhile, there are multiple Medicaid-related bills set to come up in the Lege this week. The CPPP takes a look at them and offers six things Medicaid reform should not do. Check it out.