Senate Plans to Ease School Burden With Rainy Day Fund

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    A Texas Senate plan to ease massive cuts to public schools over the next two years would still require about $3 billion from the state's Rainy Day Fund, the head of the chamber's budget committee said Wednesday.

    Shortly after approving a proposal to add nearly $6 billion more to schools than was first proposed, Sen. Steve Ogden said the overall budget would still be short.

    "In my opinion, we need $3 billion out of the Rainy Day Fund to balance this budget," Ogden said.

    He said he would ask the committee to approve the amount as a last resort on Thursday, when the Senate Finance committee takes up the full two-year state budget.

    The fund, which is made up of oil and gas tax revenue, is estimated to have a balance of $9.4 billion, based on official state projections. Conservatives, including Gov. Rick Perry, have opposed tapping the fund for the next two years despite a revenue shortfall that will exceed $15 billion.

    Ogden said he would ask the Senate to approve a House plan to use about $3.1 billion to help close a deficit for this year, bringing the total in the Senate plan to about $6 billion.

    "My concern is only about the future and holding on to every dollar that we can because I don't know that we're going to be in a better situation next time," said Republican Sen. Dan Patrick, who said he would oppose using the Rainy Day Fund.

    But Ogden told wary lawmakers that he believes the available balance in the Rainy Day Fund would be closer to $12 billion because of higher oil prices and increased production.

    The school plan approved Wednesday by the Senate Finance Committee reworks the funding formulas to allow the state to legally give schools less money. Schools still would be underfunded by about $4 billion based on current law and enrollment projections.

    The Senate cuts, however, would be significantly less than those approved in the House plan, which would underfund schools by almost $8 billion.

    "This bill is about meeting a financial crisis," said Sen. Florence Shapiro, who sponsored the legislation. "That is what we were focusing on ... a plan that shares this downturn with all districts."

    Shapiro's bill would reduce the number of school districts that get state money based on "target revenue," a mechanism instituted in 2006 that was intended to keep certain school districts from taking a hit under a funding overhaul. Hundreds of school districts still get paid outside of the state's traditional funding formula laws, which are based on student demographics.

    "It's difficult to defend a system that sends a message that some children are worth less than others," Sen. Bob Deuell, R-Greenville, said of the target revenue system. Still, he said he would vote against Shapiro's plan because of the negative impact on schools in his East Texas district.

    Sen. Kel Seliger, R-Amarillo, called the system "broken and dysfunctional."

    The proposed cuts average about 6 percent per school district, Shapiro said.

    Ogden called the Senate's school funding plan "heroic."

    "I think this bill has the potential for saving public education in Texas," he said. "Even though it may not fund it at the level that we would like, it will keep public education alive and moving forward. And if we don't pass the bill, I think public education as we know it is in big trouble."

    The committee also agreed to use almost $5 billion in one-time revenue sources, such as selling state property and pushing large school payments into the next fiscal year.

    The options, which also include a repeal of the hotel sales tax exemption for long-term residents, were part of recommendations requested by Lt. Gov. David Dewhurst.