Perry opposed to part of Texas budget deal

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Associated Press

Posted on May 25, 2013 at 3:05 PM

Updated Saturday, May 25 at 4:32 PM

AUSTIN, Texas (AP) — Gov. Rick Perry on Friday joined the ranks of lawmakers dissatisfied with parts of a Texas budget deal.

But entering the final weekend for the Legislature to pass a spending plan, no changes to meet his concerns were expected, while GOP negotiators declared victory on a separate sticking point of Democrats.

Perry had been quiet on a roughly $100 billion budget framework struck between House and Senate negotiators last week. But spokeswoman Allison Castle said Friday that Perry objects to settling $1.75 billion owed to public schools by dipping into the state's Rainy Day Fund.

The 140-day session ends Monday. A new state budget is the only bill the Legislature is constitutionally required to pass, but a compromise between the House and Senate has proved elusive amid bouts of distrust, frustration and political standoffs.

"The governor does not believe it is a good idea to use the Rainy Day Fund to pay for a deferral that has already been paid for by a bill he signed earlier in the session using general revenue," Castle said.

Castle was referring to a $6.6 billion emergency spending bill signed by Perry in March.

Republican state Sen. Tommy Williams, the Senate budget chief, declined comment on Perry's concerns.

But Williams late Friday did unveil what he believed was a compromise with House Democrats over another battle that had threatened to derail a complex budget bargain. It calls for giving more than $800 million to low-income families to help pay their summer electric bills as intended under a program the state created in 1999.

Known as the System Benefit Fund, the program charges a 65 cent per-megawatt fee on electric bills; the average customer pays around $10 annually. The Senate had previously adopted taking $630 million from the fund and returning it to the people who paid in, which Senate leaders called a form of tax relief.

The new plan calls for doing away with the fund entirely by 2016. Williams said he still considered the new version tax relief because it means the state will no longer be collecting for the fund.

"I never in my wildest dreams thought we could end the program," Williams said. "This is far better than what we had on the table, from my perspective."

Perry's objection surrounded a bill that lawmakers fast-tracked to avert a deadline that would have left Medicaid providers unpaid for treating patients, but also tucked the deferred classroom dollars into the bill.

That bill used general revenue — the funds that pay for most state services and agencies — to settle the postponed payment. Lawmakers in 2011 made public schools wait on that money as an accounting trick to make the state budget look balanced.

Perry's opposition to the budget deal was first reported by The Texas Tribune.

The disputed bill is a $5.4 billion spending measure called House Bill 1025. It includes taking $2 billion of rainy day dollars to jump-start an aggressive, widely celebrated plan to build new water pipelines and reservoirs statewide.

Perry, a Republican, voiced resistance earlier this session to tapping the state's deep stockpile of cash reserves for education. He said in April there was enough money in general revenue without using the Rainy Day Fund for public schools.

If left unspent, the fund balance is expected to swell to nearly $12 billion by 2015.

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Follow Paul J. Weber on Twitter: www.twitter.com/pauljweber

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