AUSTIN -- House leaders late Thursday announced a major breakthrough on education funding, saying they have agreed to accept Senate budget recommendations to reduce state public school funding by $4 billion over the next two years.
That's almost half the amount that House members had voted to cut in the budget they adopted in April. Many education groups, while fighting to avoid funding cuts, have touted the Senate proposal as the preferred scenario.
"Given the available options, that is the best outcome," said Lonnie Hollingsworth, director of governmental relations for the Texas Classroom Teachers Association. "Given what was on the table, this is good news."
Lawmakers outlined the agreement as House and Senate leaders continued tedious negotiations to reach a final budget agreement before their May 30 adjournment.
Several thorny issues were still on the table -- including the size of a proposed drawdown from the state's rainy-day fund -- but leaders of both chambers said they were still hopeful that they could strike a deal and avoid a midsummer special session.
Negotiations also continue over higher-education funding, but House leaders said that they were within $300 million of closing a $1 billion gap.
"We're pretty darned close," said House Speaker Joe Straus. Earlier in the day, Lt. Gov. David Dewhurst, the Senate's presiding officer, told reporters that "it's moving in the right direction."
House and Senate negotiators have signed off on most elements of a compromise budget, but steep differences in education funding had emerged as major sticking points. Despite progress in that area, negotiators were at odds over on how much to draw from the state's $9.7 billion rainy-day fund to help close a deficit for the current biennium. House officials indicated that they won't go beyond the $3.1 billion withdrawal approved by House members. The Senate this week called for a withdrawal of nearly $4 billion.
Negotiators are trying to hammer out a final budget that will have to be approved by both chambers without amendments. The House budget called for $164.5 billion for 2012-13, -- a $23 billion reduction (12.3 percent) from current spending. The Senate budget of $176.5 billion proposed an $11 billion reduction (5.9 percent).
Lawmakers opened their session in January facing a budget shortfall of up $27 billion, largely due to a recession-caused downturn in state revenue. Original spending proposals that started the budget deliberations called for up to nearly $10 billion in cuts to public school assistance, prompting widespread fears of teacher layoffs and school closures.
Under the House-passed budget, state funding for school districts would have been reduced by $7.8 billion. The Senate's proposed reduction was $4 billion.
House officials said they would be able to match the level in the Senate bill through $1.2 billion that Comptroller Susan Combs said would be available in additional revenue and $2.9 billion from various revenue measures moving through the House.
Combs issued the revised revenue estimate this week, based on the state's improving economy. Straus said that House conferees "promptly agreed to put those dollars toward our first priority, our public schools.
"The House has gone more than halfway to meet the Senate," Straus said in a statement, "and it is now time for the Senate to do its part by making additional cuts."
Dewhurst and a delegation of senators presented Straus and other House leaders with a proposal that had the support of 21 of the Senate's 31 members -- all 19 Republicans and Sens. Royce West, D-Dallas, and Juan "Chuy" Hinojosa, D-McAllen. Participants declined to detail specifics.
Time running out
Emissaries from Gov. Rick Perry's office also participated in the discussions. Perry has insisted that lawmakers balance the budget by shrinking the size of government, avoiding new or increased taxes and not withdrawing from the rainy-day fund beyond the $3.1 billion for the current biennium.
The hang-up over the budget has forced House leaders to repeatedly postpone debate on a package of savings designed to avoid further cuts. The measure would generate more than $2 billion through accounting changes and streamlining government services. The biggest portion is designed to save $1.8 billion through a brief deferral in state aid to public school districts.
Also Thursday, the Senate Finance Committee charted another potential source of revenue by approving a proposed constitutional amendment that would allow the State Land Office to make millions of dollars in direct payments to public school funding. The amendment, sponsored by Rep. Rob Orr, R-Burleson, would be presented to voters in November.
Lawmakers have expressed growing concern that the late tie-up over the budget could force Perry to call lawmakers back for a 30-day special session, likely in July. Many acknowledged that they have only a few days at best to resolve their differences or face a steamy summer in Austin.
Questioned about that possibility, Rep. Vicki Truitt, R-Keller, said, "Ask me in 24 hours."
Dave Montgomery is the Star-Telegram's Austin bureau chief. 512-476-4294