On the Edge…..

It is hard to find the words to describe this past week in the Capitol. Unusual?  Tense?  A cliff hanger?  A nail biter! 

However you describe it, the action has been fast paced and lively. It has had everyone on the edge of their seat.

Last week the Senate passed out its version of House Bill – 1 (the budget).  The House and Senate versions of the budget still are at polar extremes. The House has proposed a lean budget as it set out to do. The Senate version identifies additional revenue sources and proposes the expenditure of more funds, especially in public education and Health and Human Services.

The House quickly took up the Senate version and began the conference process. House conferees are House Appropriations Committee Chairman Jim Pitts (R – Waxahachie), Rep. John Zerwas (R – Richmond), Rep. Sylvester Turner (D – Houston), Rep. Myra Crownover (R – Denton) and Rep. John Otto (R – Dayton).

To hold the conferees true to the conservative “no new taxes and don’t use the Rainy Day Fund” desires of the House during the conference committee process, the House adopted “motions to instruct” the conferees as follows:

  • Conferees to adhere to floor amendments shifting family planning funds (Rep. Sid Miller)
  • Conferees not to use any funds from Rainy Day Fund (Rep. Phil King)
  • Conferees to keep amendment requiring separate legislation for fee increases (Rep. Phil King)
  • Conferees to use funding in House version for Emerging Tech Fund for schools, libraries, and nursing homes (Rep. David Simpson)
  • Conferees to prioritize any “found” money to public education and health and human services (Rep. Charles Perry)
  • Conferees to prioritize funding for women’s health programs (Rep. Warren Chisum)

 

Although the motions to instruct are non-binding, they certainly reflect the mood of the House and indicate to the Senate (and all others) that the super majority in the House will likely resist giving up any of its newly found power during this 82nd session.

 

On Monday morning the day began with the Senate announcing its conferees, which included Senate Finance Chairman Steve Ogden, (R – Bryan), Sen. Juan (Chuy) Hinojosa (D – McAllen), Sen. Jane Nelson (R – Flower Mound), Sen. Robert Duncan (R – Lubbock) and Sen. Tommy Williams (R – The Woodlands).

Conferees began meeting immediately and met diligently all week without reaching consensus on the very divergent budget proposals. Especially difficult to resolve are the differences in revenue proposed for public school funding and for health and human services funding. Late Friday, there was talk of a “special session” if agreement is not reached. According to precedent, the budget should be sent to the printers for formal codification by Thursday of the week (May 19, 2011). There is considerable skepticism whether or not that timeline is achievable.

This week also marked the deadline for bills to pass the House on second reading. Any bill not making the second reading by midnight Thursday meant almost certain death for the bill unless the author can successfully place it on another bill as an amendment. Most of the time, the author of a bill that has made it through the second reading will not agree to an amendment that may prevent the bill’s final passage (third reading).

So where does UTMB stand 17 days before session’s end? 

This is the most tense time of the session because others often attempt to add whole bills to existing bills still in the third reading process, which can produce unpredictable results. It is also a time that various desirable (or undesirable) items may find their way into fiscal matters bills. The House takes up fiscal matters issues on Monday or Tuesday, after letting the dust settle over the weekend while the conferees continue to try to reach some agreement on budget. 

 

The Tuition Revenue Bond Debt Service is in Article XI of the House budget and Article III of the Senate budget; overall it seems to have support in conference committee. Passage of this item in the budget will allow UTMB, with Board of Regents permission, to construct the Jennie Sealy Replacement Hospital.

 

UTMB Hospitals’ Base Funding remains a sensitive issue. The House version of the budget proposes a reduction of 25%, which would mean a $101M reduction to our hospital base budget over the biennium. We have prepared at the conferees’ request a "what if" scenario related to the impact of 25%, 15% and 10% reduction scenarios. We have also pointed out that the DSH-UPL that is generated by UTMB and placed into the state's General Revenue fund more than offsets any appropriation for our hospital base. Conferees will consider all options.

 

UTMB’s Post-IKE Recovery Funds ($150M from the 81st Legislative Session) remain of concern since the appropriation expires June 19, 2011.  UTMB is working to encumber these funds before they expire and has asked that the legislature consider an extension to the time for obligation of these funds past the June 19, 2011, deadline.

 

Correctional Health Care proposals in the Senate version of the correctional health funding bill call for a direct contract between the universities and TDCJ, with enhanced accountability, quality assurance and financial audit. Funding in the Senate bill was increased to approximately $900M (remember that this is for the whole program including Tech and UTMB). This is still an overall decrease of about 10% from the last fiscal year. The House conferees are making efforts to increase funding from their original $700M based on the recent HHSC audit of UTMB's cost structures.

 

The next two weeks will be filled with continued negotiations between House and Senate to reach an acceptable budget. If that does not occur, a “summer session” is  certain.

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