In August, Perry issued the execution proposal to pay for programs left unfunded from his line-item budget vetoes. He had tried to coax a vote for school finance reform by vetoing several budget line items. Those vetoes, together with the special legislative session’s failure to pass significant school finance reform, left billions of dollars unspent.

Legislative leaders cancelled LBB’s scheduled Sept. 21 meeting due to Hurricane Katrina. Dewhurst and Craddick said that before spending state funds on other programs they wanted to assess the non-reimbursed costs of taking in hurricane evacuees.  In a letter dated Oct. 21, Dewhurst urged Craddick to agree on re-scheduling the LBB meeting for early November. Dewhurst’s proposed agenda items contained almost all the items on Perry’s budget execution order.

“Both your office and mine agree that there is not sufficient veto monies to fund the attached list at recommended levels,” wrote Dewhurst. “However, this proposed list appears to be a good starting point to begin discussions at the LBB meeting we agreed in September to hold this month.”
Craddick, in turn, replied Oct. 31 that he was willing to fund only four projects: school textbooks; the Arts Commission; the Military Facilities Commission; and partial reimbursement of nursing homes.

“It would be fiscally irresponsible to consider any additional items given the potential supplemental needs that may be necessary to cover costs associated with Hurricanes Katrina and Rita, Medicaid caseloads and the uncertainties related to the pending Supreme Court decision on public school finance,” Craddick said.

At face value, Craddick’s take-it-or-leave-it approach doesn’t seem to leave much room for negotiation. Does this mean that many of the items in the budget execution proposal – with the exception of school textbooks – hang in the balance? Perry’s spokeswoman, Kathy Walt, said his office is currently talking with legislative leaders.

Following is a list of programs left unfunded this session, grouped according to whether there is general agreement or disagreement over what to fund:

General agreement
* School textbooks. Perry and legislative leaders, including Craddick, have agreed to fund $295 million in school textbooks. In August, Perry ordered the Texas Education Agency (TEA) to begin processing textbook orders that had been held up in supply warehouses due to legislative inaction. Even though the LBB has not formally acted on Perry’s budget execution proposal, both Craddick and Dewhurst have publicly endorsed paying for the Proclamation 2002 textbooks that were scheduled to be in the classrooms this fall.

Texas Military Facilities Commission. In August, Perry folded the functions of the commission into the Adjutant General’s office. The Governor proposed allocating $3 million to the Adjutant General’s office to help assume the debt payments on military facilities.

Arts Commission. The governor proposed $300,000 to restore funding for the salaries of three employees at the Arts Commission that were in jeopardy after he vetoed a line-item of $531,000 for a new computer system. The salaries were included in the line-item. Craddick proposes restoring most of the funds ($500,000) that were vetoed.

Disagreement
Nursing home rates. Perry and Craddick disagree on how much to increase nursing home reimbursement rates. The Governor has proposed $200 million to restore funding to previous levels, whereas Craddick proposed only $75 million.

In the future, Speaker Craddick said he would like to impose a “quality assurance fee,” often referred to as a “granny tax” on nursing home residents so that nursing home “rate stability may be achieved for the nursing home industry through self-funding mechanisms rather than reliance on pure general revenue.” Perry opposes it.

Personal needs allowance for seniors. Rep. Senfronia Thompson (D-Houston) struck an agreement with the Governor’s office to order the Department of Aging & Disability Services to raise the personal needs allowance for Medicaid residents in nursing homes from $45 to $60 a month.

Perry proposed $13 million in funding, with seniors allowed to use their personal needs allowance to purchase items such as clothes and hygiene products. The personal needs allowance is not on Craddick’s proposed agenda.

El Paso Medical Center & Irma Rangel Pharmacy School. Items on the governor’s list that have attracted the most political attention are the medical school in El Paso and the Irma Rangel School of Pharmacy in Kingsville.   Dewhurst has blamed Craddick for blocking funding. During their regular session, lawmakers failed to approve funding for the schools’ operations.

“We’re disappointed that the funding for the pharmacy school and the medical school were not on there [Craddick’s list],” said Mark Miner, Dewhurst’s spokesman. “We had the pharmacy school, a building built at taxpayers’ expense that is just sitting empty. We’re hopeful that everything will be resolved and that we’ll get an LBB meeting scheduled and fund some of these important projects.”
Perry suggests investing $38.5 million in start-up funds to open Texas Tech’s medical school within three years and $10 million for the pharmacy school.

The Governor also would give the Natural Sciences and Engineering building at the University of Texas at Dallas $15 million for debt service. The building was part of the proposal Perry used to attract a new silicon wafer plant to Richardson.

Trauma care fund. Perry wants to restore the money from increased traffic fines designated to go toward Texas trauma centers. The trauma funding was one of the big selling points used to pass Perry’s omnibus toll road bill in 2003. The 2005 legislature refused to appropriate all of the funding designated for the trauma care program. Perry’s budget execution proposal would appropriate $76.5 million from the fund to trauma care centers throughout the state.

Galveston National Biocontainment Lab. Construction began in August on one of only two bio-containment laboratories in the nation at the University of Texas Medical Branch at Galveston. The university won a $110 million grant from the National Institutes of Health to construct the facility. Perry has proposed $5 million to help pay for the debt service on the state’s share of the project.

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