Texas House approves budget that makes sweeping cuts

By Corrie MacLaggan

AUSTIN, Tex (Reuters) – The Republican-dominated Texas House late Sunday passed a budget for the next two fiscal years that does not add taxes or dip into the state’s rainy day fund but does make sweeping cuts to education and health care.

“This budget paves the way to help Texas recover from the impacts of the national economic recession,” Republican Governor Rick Perry said in a statement. “You cannot tax or spend your way to prosperity, and Texans expect their elected leaders to govern under that truth when it comes to taxpayer dollars.”

The vote was 98 to 49 with two Republicans voting against along with all Democrats. The measure now goes to the Senate, which is expected to offer a proposal that has fewer cuts.

The House’s $164.5 billion budget for the two fiscal years 2012 and 2013 spends $23 billion less than the last two-year budget cycle. The budget includes billions of dollars less for public schools than state law now requires and is billions of dollars short of what state officials expect will be needed to cover caseload growth in Medicaid, the federal-state health insurance program.

The severe cuts in spending in the 2012 and 2013 plan allow the House to show a balanced budget, as required by the Texas Constitution.

The House budget proposal could lead to 300,000 fewer state and private jobs, according to a March analysis by the Legislative Budget Board, a joint committee of the Texas Legislature.

House Democrats blasted the measure, saying it would lead to nursing home closures, teacher layoffs and college students missing out on financial aid.

“Texas House Republicans have chosen to let the people’s money sit in the rainy day fund while our most vulnerable citizens are left in dire straits,” said state Representative Eric Johnson, a Dallas Democrat.

The House last week approved a bill that would use about a third of the $9.4 billion rainy day fund to close a deficit of $4 billion in the 2011 budget, which ends August 31. That proposal, which was sent to the Senate, has the blessing of Perry, who is against using the fund for the 2012 and 2013 budget.

During his reelection campaign last year, Perry boasted that the Texas economy was doing better than most states struggling to recover from the recession. States such as California, Illinois and New Jersey are in even worse shape financially. But even in Texas, budget forecasts have worsened since the election and Perry was recently forced to publicly abandon his pledge not to use the state’s reserve fund for this fiscal year.

(Editing by Greg McCune)

Texas House approves budget that makes sweeping cuts