AUSTIN -- Wasting little time in dealing with the dominant issue of the fledgling special session, the Republican-led Texas Senate voted 19-12 to pass a revived revenue and school aid package that had been felled by a Democratic filibuster days earlier.
The nontax revenue measure, which is essential to balance the $172.3 billion two-year budget passed during the final days of the regular session, includes $3.5 billion in savings, much of which comes through a brief deferral in state payments to school districts. The integral school finance component enables the state to implement $4 billion in reduced funding to school districts over the next two years.
The original bill collapsed early Monday, the last day of the regular session, after a Sunday night filibuster by Sen. Wendy Davis, D-Fort Worth. That led Gov. Rick Perry to call the special session that began Tuesday.
Also Friday, Perry added another item to the special session agenda: legislation that would restructure a windstorm insurance fund that covers hurricane victims on the Gulf Coast.
Possibly hundreds of parents and teachers were expected to rally at the Capitol today to protest the education cuts. Davis is expected to speak at the rally.
Democrats were powerless to stop the revenue package Friday but they reasserted concerns that the bill would have a devastating effect on schools. In her filibuster, Davis declared that the 82nd Legislature was failing to fund school enrollment growth for the first time in Texas.
Senators also approved a measure by Sen. Jane Nelson, R-Flower Mound, to save $467 million in Medicaid costs, another key measure tied to balancing the budget.
The school finance package was designed to change Texas law to enable the state to reconfigure formulas to match the reduced level of state education funding contained in the recently passed budget. Without the change, the state would be required to make up for the reductions in next fiscal biennium.
School districts in Tarrant County would lose $260 million under the school finance plan, according to initial calculations. The Fort Worth school district would lose nearly $40 million over the next two years. Arlington and Keller would each lose about $28.9 million.
The bill calls for a 6 percent across-the-board cut to schools in 2012 followed by reductions in target revenue funding the next year.
Republicans beat back several Democratic amendments, including one by Davis that would have repealed a tax break for the production of high-cost natural gas, an exemption widely used by drillers in the Barnett Shale. Davis said that repealing the provision would raise $1.2 billion that could be used to offset the $4 billion in school cuts.
An amendment to draw more than $1 billion from the rainy-day fund was also defeated.
"Through use of rainy-day funds and an end to corporate tax giveaways, we have offered repeatedly to add $4 billion back into public education, but those in charge have refused twice the opportunity to fully fund public education," Davis said. "It is clear that they would prefer to leave options on the table, which is clearly out of touch with the priorities of Texas families."
But Senate leaders defended the state's commitment to education.
Lt. Gov. David Dewhurst, the Senate's presiding officer, said overall spending on education is higher than what the 2009 Legislature appropriated, although per-pupil expenditures are going down.
"Would we want to do more? A lot of us would," Dewhurst said. "But under the circumstances we've made a real effort to provide adequate funding for our schools."
The bill, originally called SB1811, contains dozens of provisions that include accounting improvements, efficiency measures and changes in fee collection methods. The measure would raise $335.8 million through changes in collecting the motor fuel tax and $278 million by changing how the state comptroller manages unclaimed property, such as dormant bank accounts and uncashed checks.
Nelson's bill, SB7, consolidated three regular-session bills designed to curb costs in Medicaid, the state-federal program that provides health coverage for low-income residents. The bill expands Medicaid managed-care programs, which assures that Medicaid enrollees have a "medical home" with a primary care provider and rely more heavily on preventive and primary care over emergency room treatment.
The bill creates reviews to guard against fraud, calls for co-payments for nonemergency visits to emergency rooms and authorizes the reduction of payments for treatment associated with preventable medical errors.
Nelson said the measure was "critically needed" to roll back "unsustainable" Medicaid costs.
Dave Montgomery is the Star-Telegram's Austin bureau chief. 512-476-4294