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Gov. Perry Says Legislators Must Come Back, Get School Funding Right

Location: Austin,TX

Gov. Perry Says Legislators Must Come Back, Get School Funding Right

Vetoes More Than $35 Billion in Appropriations

Gov. Rick Perry today vetoed $35.3 billion in the Texas Education Agency budget and called lawmakers back for a special session to "get education funding right." The special session will start Tuesday, June 21, at noon.

"For all the successes of this past session, job number one was left undone when the session ended without the passage of school finance reform," Perry said. "I'm not going to approve an education budget that shortchanges teacher salary increases, textbooks, education technology, and education reforms. And I cannot let $2 billion sit in some bank account when it can go directly to the classroom."

Perry's use of his line-item veto authority means legislators will have 30 days to complete the task left unfinished in the regular session that ended in May. Perry has been meeting with the leadership since then to negotiate a compromise on education reform and property tax reduction bills. The special session also will afford legislators the opportunity to fund textbook purchases for schools and classroom technology.

"Make no mistake about my message today: While I respect the deliberative process and will continue to welcome and engage in negotiations, this issue has been studied and debated long enough and now it is time to act," Perry said.

Without a special session, about $2 billion that had been intended for teacher pay raises, education reforms and other school priorities would have gone unused instead of going to schools because House Bill 2 didn't pass. These funds cannot be redistributed under budget execution authority, meaning they can only be spent on education if appropriated during a special session. And without additional legislative action, textbooks would remain sitting in warehouses rather than in school children's hands.

"I recognize this is a bold step, and frankly one I wrestled with," Perry said. "Ultimately I determined this action was necessary to ensure we fully fund our schools, provide needed reforms in the classroom, and pass real and sustainable property tax relief."

Perry said his veto will, "deliver more, not less, for our children: more money for their teachers, more money directed to the classroom, and more results in their schools."

Perry assured parents, teachers and school children that there is ample time for legislators to finish the task and for schools to open on schedule, with better funding, better teacher pay and, most importantly, critical reforms that will ensure more children are challenged to achieve in the classroom.

Perry also vetoed about $1.7 billion in all funds for other line-item appropriations from the 2006-07 spending bill, freeing up a portion of these funds for property tax relief or education funding and making legislators' jobs easier in a special session. In his veto proclamation, Perry noted that in his State of the State address in January, he said Texans have a right to an unambiguous and understandable state budget that shows how tax dollars are spent. "Senate Bill 1 continues the recent practice of combining numerous programs into enormous line items of appropriation that allow too much discretion in the use of public dollars," Perry said in his veto statement.

"This practice restricts the ability of a governor to exercise the constitutional authority to line item veto. For instance, hidden in the Parks and Wildlife Department's budget is $1,000,000 to construct bird watching facilities. Over $18 billion is appropriated to higher education in lump sums that would require the governor to veto an entire university to reject any provincial, outdated or ill-advised spending item."

Other items in the budget that the governor vetoed are:

* $314,252 for computer services at the Commission on the Arts. Perry said the agency should maintain its computer technology within current funding.
* $6.9 million for Trusteed Programs in Governor's Office. This veto deletes the Governor's Emergency and Deficiency Grants, 94 percent of which were transferred by rider to another agency to fund ongoing operations substantially limiting the purpose of an appropriation to handle one time short falls.
* $440 million for the Federal Medicare Give-Back. These are savings that the State of Texas has accrued through efficiencies in operating the "dual eligibles program" for persons who are eligible for both Medicaid and Medicare services. "We are not going to turn over savings we have achieved in Texas to be spent on Washington," Perry said. "This veto in no way jeopardizes the drug prescription benefits that Texans receive. In the interim I will be working with President Bush, Secretary Leavitt and other governors on Medicaid and Medicare reform that does not penalize states."

Additionally, several states' attorneys general have raised concerns that this give-back provision is an unconstitutional levy on state treasuries. Perry said he will ask Attorney General Greg Abbott to review the issue and join in this review.

* $486,556 for the Office of Attorney General's (OAG) program to repay loans of law school students who go to work for the OAG. The veto is intended to lower law school tuitions for all Texas students because the loan repayment program is funded through a 1 percent surcharge on law school tuition. Perry further noted in his veto message that the OAG received pay increases of 17.5 percent for its lawyers.
* $19.8 million for Texas Department of Criminal Justice to contract for bed space in county jails in fiscal year 2006. TDCJ received $15.9 million in emergency appropriations in HB 10, but will not spend all of this funding in 2005. In addition, the appropriation for this purpose in FY 2007 is more than twice the appropriation for 2006. The projected need for contracted beds, combined with the lapsed funding over the next biennium does not support this increase. Since TDCJ has rider authority to move funds between fiscal years if necessary, the agency can use the 2007 appropriation to fund this strategy for the entire biennium. Federal funds included in this strategy would remain available to TDCJ.
* $7 million for the Texas Military Facilities Commission, eliminating all funding for the agency. The primary function of this agency is to acquire property and manage facilities for the Texas National Guard. At this time of transition, during the federal base realignment and closure process, it has become clear that the uniformed personnel of the Texas National Guard require and deserve the direct control of their facilities' management. This veto is intended to give the Texas National Guard a more direct way to maintain personnel readiness through facilities management. The duties and functions of this agency will be transferred to another entity by executive order.
* $8.8 million for administrative services at the Texas Workers Compensation Commission. The transfer of the functions of the Workers' Compensation Commission to a division within the Texas Department of Insurance is expected to result in significant savings, particularly in the administration of the agency.
* $1.2 billion to various agencies and programs. These funds were contingent upon passage of legislation that failed. This includes Perry's line item veto of $890 million in contingency funds for the quality assurance fee on nursing homes. "The proposed quality assurance fee would have unfairly penalized nursing facilities that do not have Medicaid clients by imposing a tax on those facilities for which the residents would receive absolutely no benefit," Perry said. "Future increases in nursing home appropriations should be funded with general revenue."

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