SENATE RELEASES BUDGET PROPOSAL

(Austin) — The state would spend $88.9 billion to cover services over the next two years under a preliminary budget released Monday. Senate Bill 1, announced at a press conference by Lt. Gov. David Dewhurst along with Finance Committee Chair Tommy Williams and Vice Chair Juan "Chuy" Hinojosa, sets a baseline budget that the authors say covers growth in public and higher education as well as public health funding for 2013 through 2014. Texas is the fastest growing state in the nation, and Dewhurst told reporters that state fiscal policy must account for that fact. " We've got people coming into the State of Texas for opportunity, " he said, "To maintain that opportunity we need to make sure that we keep our spending under control, fund our priorities and keep our taxes low."

This biennial budget would spend slightly more than the last approved state budget, representing a 1.8 percent increase. The proposed budget puts more money into public and higher education in order to keep up with enrollment growth. It includes more money for Medicaid, but the bill assumes that the legislature will be able to find $250 million in Medicaid savings to balance out. The bill also includes provisions for bond issuance to cover the cost of a comprehensive state water plan, a priority the Lt. Governor has highlighted as an important issue facing the 83rd Legislature.

One major difference in this first version of the budget from past proposals is that this biennial budget would use no dedicated funds to balance out. The state has a number of funds statutorily dedicated to certain services, ranging from transportation to low-income utility assistance. Past legislatures have used those funds outside of the statutory purposes to make up differences in other parts of the budget. This year's version, however, doesn't dip into other funds to cover education and health and human services funding, though that may change as the bill works its way through the committee process. Finance Chairman Tommy Williams of the Woodlands, the bill's primary author, said that the goal of a diversion-free budget should be reached in the next few years. "My suspicion is that it's going to take two or three sessions to bring that in for a landing," he told reporters. "But a good start is to begin with a budget that doesn't rely on the GR (general revenue) dedicated balances."

Williams stressed repeatedly that the bill as it stands today is simply a starting point for the final budget proposal the Senate will submit to the House. Over the next months, the Senate Finance Committee will hold meetings and hearings regarding every dollar the state would spend over the next two years, and the budget unveiled Monday may change significantly from the version eventually passed by the Senate. The Senate budget will likely come before the full body for a vote in April or early May and will then head to the House.

The Senate will reconvene Tuesday, January 15 at 11 a.m.

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