What a Week!

I began the week with heartburn so bad that I thought I must be having a heart attack. It started late last weekend and progressed. After a quick check-in Monday with one of the world's most brilliant doctors, Dr. Steve Quach, he quickly decided that I had "pill esophagitis" from swallowing doxycycline (antibiotic for acne) without drinking enough water. (Instructions with the prescription are very clear on the need to drink a full 8 oz. of water with the pill.) He predicted that the pill had stuck in my esophagus and eroded it. Go figure!  By the way, why I have acne and am married to a dermatologist is a whole other story! 

Another quick check-in with my ole med school friend Dr. Marc Shabot offered phone confirmation, medication, and some relief. I returned to Galveston Tuesday morning and met Marc's endoscope (must be named "Big Bertha"), and he confirmed a quarter size erosion in my mid-esophagus. I've been chugging meds all week and am well on the road to recovery. And a lot more attentive when it comes to following the doctor’s orders on how to take my medication.

The legislature has been very busy, as legislatures should be. They have passed out emergency legislation requested by the Governor in the first 60 days and have also gotten past those thorny subjects like voter ID. This week has been consumed on the House and Senate sides with more budget issues — past, present and future!  The Senate has held hearings and met in member work groups to review their options for creating their own budget recommendations.


Remember that the state health-related institutions are treated more equitably in Senate Bill 1. The Senate has taken an approach to building a budget that addresses the burning issues of education funding and health and human services funding, and that mitigates negative impacts on existing programs. Under the skilled leadership of Senate Finance Committee Chairman Steve Ogden, members have been collegial and deliberate in trying to find realistic ways to solve long-standing problems related to the state's financing methodology.

The House began action Thursday at 0830 with the second reading of HB4, the supplemental appropriations bill. The supplemental appropriations bill called for the expenditure of $3.1 billion from the economic stabilization fund and the use of newly identified revenue and savings to cover the $4 billion shortfall in tax revenue from 2010-2011. The debate was filled with passionate pleas to avoid cuts to state programs that disadvantage the elderly, children, the disabled, schools and other public programs.


Sixty-seven amendments were offered by members to add money and programs previously reduced back to former or near-former funding. Rep. Sylvester Turner waxed eloquent in his pleas to "save our nursing homes," and Rep. Mike Villarreal pleaded his case for more money for education by reversing cuts that had been made. Suggested funding for the reinstatements would require use of more Rainy Day Funds. Discussion of the matter followed party lines and lasted for the amount of time allocated; it was then tabled by a predictable party line vote.

HB4 (Supplemental Appropriations Bill) passed the House on its second reading virtually unchanged from its introduction, with three exceptions:

·         Rep. Phil King sponsored an amendment implementing a hiring freeze for vacant state positions.

·         Rep. Drew Darby offered an amendment that reduces funding in the current biennium to the Soil and Water Conservation board.

·         Rep. Strama offered an amendment that moves unobligated funds from the Emerging Technology Fund to the Foundation School program.

All three amendments represented a “new source of revenue” and all three passed.

The final vote FOR passage of HB4 was 100 – 46.

The House then took up the debate on HB275, which relates to use of the Rainy Day Fund (RDF) to fill the gap in the current biennium budget. The debate was fierce and focused on limiting any expenditure from the RDF to just $3.1 billion. Votes followed party lines among those members present, with an occasional "stray" objection. Much like the debate of HB 4, amendments were introduced and quickly tabled after the time allocated for discussion in House Rules. Only one amendment passed, and it was Rep. Zedler's language that makes HB 275 effective ONLY if HB4 or similar legislation is enacted and becomes law, with an effective date of July 1, 2011. This is important strategic move.

House Bill 275 passed with a vote of 142 – 2 approving the use of $3.1 billion from the Rainy Day Fund during the current state biennium.

On Friday morning the House had the third and final reading of HB1 and HB275 and passed both out of the House. It’s official!  The bills now go to the Senate for review.


The House took up HB1, the 2012-2013 state budget on Friday morning; it has almost 400 amendments!  The Governor's agreement with the House Appropriations Committee has been that the Rainy Day Fund could be tapped only for the purpose of paying off the state’s debts from the current biennium and not for use in the new state budget. However, this procedure in turn frees up about $4 billion for revenue for the upcoming budget. As previously noted, this allows some restoration of funds — about $2 billion each — for public schools and health and human services.

Adding money to any one appropriation area means taking it away from another area. The pie is only so big. It can be sliced a lot of ways. But unless the pie gets bigger (through new revenue that is not currently available), there is no way to increase funding in the current budget discussion until the budget passes from the House and moves to Senate. 


You know the rest of the story. HB 1 passed from the House with only minor modifications, none of which were significant to UTMB. In spite of a “rumor” that UTMB’s disproportionate cuts in its hospital funding had been restored, that was indeed rumor. Although there are still recommendations in Article XI of the bill for restoration, there is no money. Items put into Article XI are often referred to as “the wish list” and usually die on the vine without funding.


So what happens now?


The House’s work is partially done; another phase will begin shortly.


But first, the Senate must wrap up its work and produce its version of the budget. Senator Robert Duncan has been chairing a task force of sorts to identify other sources of revenue to add about $5 billion to the budget. That search has yet to produce a final report. Some say there is just no pot of gold; some say there is no rainbow either! 


But those more optimistic individuals (like yours truly) believe in miracles. Certainly if anyone can pull a miracle off this session it will be Senator Steve Ogden.  He has had the fortitude to confront the elephant in the room and spoke last week of the ultimate need to “fix the structural deficit,” referring to the margins tax enacted in 2006 that has failed to produce revenue to replace the state tax cuts enacted that same year.


The inevitability of a special session on the budget seems to loom more depressingly on the horizon as each day passes without resolution on this budget.


What next?


Indeed! What next?


On Thursday, the Senate Subcommittee for Health-Related Institutions discussed tapping the decade-old tobacco settlement trust fund, breaking it up into allocations that would provide each health-related institution with some cash in this year’s budget. There are many positives associated with that suggestion (instant cash) — but also some pitfalls (loss of future revenue). More thought and discussion regarding this alternative are inevitable.


The Senate will make its final attempt at a budget shortly, and then the two budgets will be brought together into a joint conference committee composed of five house members and five senators for deliberation. Their impossible and unenviable task will be to become King Solomon and determine what is fair and equitable in the budget and decide that which lives and that which dies by the budget axe.


Pray for them. 





House Bill (HB) 1:  "The" Budget Bill that lays out the budget for the 2012-2013 biennium.

House Bill (HB) 4:  The Supplemental Appropriations Bill; Texas will finish the current biennium (2010-2011) with a deficit in excess of $4 billion. Deficits by constitutional mandate cannot carry forward; the budget must balance at the end of the year. The Comptroller is allowed to take money from the economic stabilization fund (Rainy Day Fund) and pay all bills by August 31 of the end of the biennium with or without legislative permission. HB4 gives the House's endorsement to what would have been done anyway.

House Bill (HB) 275:  Provides for use of $3.1 billion of the economic stabilization fund for balancing the budget.

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