Key budget bills pass as legislators break impasse

Détente descended upon the Texas Capitol on Wednesday night after several tense days during which it seemed a delicate political deal to craft the state budget might fall apart.

Two budget-related bills, providing tax relief and water funding that Gov. Rick Perry has demanded, passed out of their respective chambers before a midnight deadline.

The two bills are essential complements to Senate Bill 1, the 2014-15 budget bill, and their passage clears the way for lawmakers to complete their budget task by the end of the 140-day legislative session Monday. SB 1 is expected to come up in both chambers for final approval on Saturday.

The Senate broke the stalemate by taking up a House Bill 1025, a $5.4 billion emergency budget bill that includes $450 million for repairing heavily traveled roads in the oil patch and $200 million in additional education aid.

HB 1025 also authorizes pulling nearly $4 billion out of the state’s rainy day fund, which is projected to have $12 billion available to spend during the 2014-15 budget period.

The $200 million education aid had been a key demand of House Democrats, who wanted proof the Senate would deliver it before they would support a proposed constitutional amendment creating a water infrastructure bank.

Once they got proof of life for the education money, House Democrats agreed to vote for Senate Joint Resolution 1, the water fund measure. In the end, it passed on a vote of 130-16, easily crossing the two-thirds threshold needed to put a constitutional amendment before voters.

The Senate gave only preliminary approval to HB 1025 late Wednesday on a vote of 29-2, but held off final approval until the House had acted.

“We have an Amber Alert out for SJR 1 right now,” said Senate Finance Committee Chairman Tommy Williams, R-The Woodlands, who opted for cheeky after a testy few days.

When word of the House vote on SJR 1 reached the upper chamber, the senators quickly gave HB 1025 final approval on a vote of 28-3.

The 55-member Democratic House minority wielded outsized influence throughout the standoff because a passel of tea party Republicans objected to pulling $2 billion from the rainy day fund to create the water fund. They argued that the rainy day fund should be kept off-limits except for emergencies.

State Rep. Van Taylor, R-Plano, spoke against SJR 1, saying the proposed change to the constitution is really about appropriating public money in a way that skirts the state’s constitutional cap on spending.

“It’s about accounting games,” Taylor said. “It’s about dishonesty.”

State Sens. Dan Patrick, R-Houston, and Ken Paxton, R-McKinney, voted no on HB 1025. Paxton said he didn’t have enough time to fully review the bill before the vote occurred. The details were handed out to senators about 30 minutes before the vote.

State Sen. Donna Campbell, R-New Braunfels, joined in opposing the bill on final passage. “I wanted more money for transportation, wanted money from the rainy day fund to be used for one-time capital expenditures, and I wanted a vote of the people,” Campbell said.

But other tea party conservatives, such as state Sen. Brian Birdwell, R-Granbury, supported the bill and use of the rainy day fund because the money wouldn’t be used for ongoing expenses.

About $1.8 billion of the rainy day fund money will be used to settle up the state’s obligations to school districts in the current budget. That one-time expense undoes one of the accounting tricks that was used to deal with the severe budget shortfall in 2011.

Using the rainy day fund for that school expense freed up enough money to bring the total tax relief package to $1.5 billion, near Perry’s demand for $1.8 billion. Businesses will receive a break on franchise tax bills while most electric utility customers will get a rebate of about $100.

The rainy day fund will be tapped for an additional $2 billion only if voters approve a constitutional amendment to create the water infrastructure bank, while $185 million goes to wildfire recovery, which includes help for Bastrop County.

A few other pieces of the budget puzzle still need to fall into place. One potentially contentious measure would rebate $631 million to electric utility customers from a fund that is intended to help low-income Texans cover their electric bills.

House Democrats have objected to that move, but Williams has made the whole budget package contingent upon its approval.

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