Texas Senate's budget proposal better than the House's

The Senate Finance Committee and its chairman, Sen. Steve Ogden, R-Bryan, deserve praise for putting together a proposed 2012-13 state budget that shows common-sense improvements over the plan adopted by the House.

Still, they could have done even better.

Through stubborn willpower, Ogden and his committee found ways around many of the overdone spending cuts the House budget would impose. While the committee's budget would trim education expenditures by $4 billion, school administrators say that looks good when compared to the $7.8 billion reduction in the House plan.

The Senate is expected to debate the committee's $176.4 billion proposal this week. The House approved its $164.5 billion version on April 3.

With revenue down significantly in a slow economy, both plans show big drops in spending from the $182.2 billion budget approved by the Legislature two years ago.

Already, conservative stalwarts are calling the Senate committee proposal unaffordable. After the Senate votes, a conference committee probably will work on reconciling differences with the House before the session ends May 30.

Ogden and his committee used a combination of house cleaning, spending cuts, $4.1 billion in "non-tax" revenue/accounting shifts and a $3 billion marker from the state's rainy-day fund to reduce the budget cuts.

Senate Democrats like Fort Worth Sen. Wendy Davis are right when they say the Senate plan only looks good in comparison to the House proposal. It can be improved.

The Finance Committee left money on the table. Probably most noticeable and significant for Tarrant County and the surrounding area, they could and still should revise the "high-cost gas" tax exemption that has been a bonanza for Barnett Shale natural gas producers.

A recently disclosed report from the Legislative Budget Board said natural gas companies reaped $1.2 billion from the tax break in 2009 and have enjoyed severance tax reductions totaling $7.4 billion since 2004. The report also said state auditors found the program riddled with abuse, and state manpower is insufficient to keep those abuses from recurring.

In a budget with $4 billion cut from education, a 6 percent reduction in reimbursements for health and human services providers and a drop in financial aid for college students, such largesse for big-bucks companies is perverse.

The Senate committee considered several ways to stop the bleeding -- from restricting what qualifies as "high-cost" gas drilling to hiring more auditors, suspending the tax exemption for two years or ending it for new wells -- but did not take advantage of them.

Not surprisingly, the natural gas industry has lobbied hard to keep the exemption, calling it "an unqualified success" in bringing thousands of jobs and billions in revenue to the state. Without it, industry representatives say, gas companies would go to other states to drill.

It used to be that Texas leaders didn't take kindly to threats and abuse. Nowadays, accommodating them seems to be the norm.

The Senate committee also left other opportunities untouched out of a list of 89 possibilities totaling $5.5 billion. The full Senate should look over the list again.

The possibility of drawing $3 billion from the rainy-day fund drew heat when the committee unveiled its budget. Gov. Rick Perry has said he wouldn't sign a 2012-13 budget that relied on that fund.

But there would still be a healthy $3 billion balance in the fund at the end of the biennium. Are we really going to refuse to use the rainy-day fund in hard times while letting gas companies walk away with millions of state dollars?

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