AUSTIN, Texas (AP) — Budget woes in Texas caused by a prolonged oil slump would be patched with cuts to higher education, kicking the can down the road on growing Medicaid costs and rebuffing priorities of Republican Gov. Greg Abbott under an austere spending bill passed unanimously Tuesday by the state Senate.
Texas’ finances are not as bleak as other energy states — Oklahoma is grappling with a roughly $870 million shortfall that could decimate core state services, and Kansas is considering big tax increases to offset serious budget problems.
But booming Texas is still belt-tightening in the wake of sagging energy prices. Budget observers put the state short as much as $6 billion to meet the current level of state services over the next two fiscal years.
That has increased tensions among Republicans over how to cut back at an already divisive time in the GOP-controlled Legislature. Lawmakers are at each other’s throats over thorny social issues, including a North Carolina-style “bathroom bill” targeting transgender people and an immigration crackdown on so-called “sanctuary cities.”
The $106.3 billion package, approved 31-0, doesn’t fully fund future Medicaid caseloads in rapidly growing Texas. It also closes a state prison and doesn’t give Abbott the dollars he wants for pre-kindergarten and bringing elite researchers to state universities.
Classrooms are spared from cuts, but the status quo is unsatisfying to schools and teachers after the Texas Supreme Court last summer ruled that the state’s school finance system is flawed but still barely constitutional.
Texas also wouldn’t let up on an $800 million border security mission, even though the Republican leaders have enthusiastically embraced President Donald Trump’s promises to build a wall along the state’s border with Mexico.
“This is a lean budget. But this is also a smart budget. It responsibly meets the needs of our state,” said Republican state Sen. Jane Nelson, the Senate’s top budget writer.
Democrats raised objections during hours of debate Tuesday, but ultimately backed the bill — knowing that what ultimately emerges from both chambers will look very different.
“It was a different conversation than I’ve heard” surrounding a budget, Nelson said afterward, when asked if she was surprised the proposal won unanimous support.
The era of good feelings isn’t likely to last, though.
The Senate spending bill has already been mocked as a non-starter by Republican House Speaker Joe Straus, who has accused far-right Senate leaders of “cooking the books” with accounting gimmicks to gloss over difficult decisions.
That sets up both chambers for a budgetary showdown in the final weeks of a legislative session ending in late May.
Texas has a luxury most states don’t — nearly $11 billion socked away in a state savings account, also known as the rainy day fund. Former Texas Gov. Rick Perry, who is now the energy secretary in the Trump administration, made that piggybank politically sacrosanct during his record 13 years as governor and Senate Republicans continue to resist using the dollars.
House Republicans, however, say the time to spend that money is now — instead of making deeper cuts.
“Other states in Illinois, in Kansas, they might think that’s the tough choice we are forced to make here,” said Eva DeLuna Castro, a former Texas budget official who is now an analyst at the left-leaning Center for Public Policy Priorities. “But they don’t understand what Texas is sitting on.”
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