Boxed in by a constitutional limit on state spending, the House and Senate are struggling to find common ground on how to pay for $2 billion in new water projects.
Texas Attorney General Greg Abbott confirmed to House leaders this week that they cannot access the $12 billion rainy day fund to pay for those projects without first voting to exceed the spending cap. That unofficial legal opinion echoes what the Legislative Budget Board advised early in the budget-writing process.
The Senate got around that requirement by choosing to put the issue before voters in November with proposed constitutional amendments dedicating $5.7 billion from the rainy day fund for water, transportation and education.
Lt. Gov. David Dewhurst told reporters Thursday that the Senate’s approach is the only workable solution.
“The only way the the Legislature can take money out of the rainy day fund and not have it count against the constitutional spending cap is through a constitutional amendment,” Dewhurst said. “This is exactly what we talked about in the fall of 2012, and was one of the reasons that the Senate decided to rely on asking the voters of Texas to approve taking money from the rainy day fund for certain projects.”
The House, however, is not inclined to go that route.
“Texans expect their elected leaders to make difficult decisions, and the House will not shy away from those decisions,” Speaker Joe Straus said in a statement.
House Appropriations Committee Chairman Jim Pitts, R-Waxahachie, spent Thursday morning searching for the 100 votes needed to advance the Senate plan — with no luck, he said.
“We don’t have the votes for a constitutional amendment to appropriate money in this House,” Pitts said.
That leaves the House with the option of freeing up $2 billion in the 2014-15 budget, which Pitts said could not be done without taking money from public education, or voting to bust the spending cap so it can tap the rainy day fund.
Pitts seemed partial to the latter approach.
The spending cap, which was approved by voters in 1978, limits growth in parts of the state budget to the projected growth in the state’s total personal income. It was intended to keep the size of government proportionate to the size of the state economy.
It takes fewer votes — a simple majority — to bust the spending cap compared with the two-thirds needed to tap the rainy day fund, or put a constitutional amendment before voters. Yet those votes are harder to get because Republicans fear the issue could be used against them in a primary.
Senate Finance Committee Chairman Tommy Williams, R-The Woodlands, said his colleagues aren’t interested in taking such a vote, particularly since they see stronger taxpayer protections in setting up the $2 billion water fund through a constitutional amendment.
Nor will Dewhurst ask the senators to do so, the lieutenant governor said.
The $2 billion water fund is considered a must-pass measure by Gov. Rick Perry, who has said he’ll bring legislators back for a special session if they fail to get it done by the end of the month.
So with about two weeks left in the legislative session, the path forward to a budget compromise is unclear. The two chambers are pretty close in terms of what they want to spend money on. They just can’t agree on which buckets of money to use.
“It’ll get worked out,” said Pitts, crossing his fingers.