There are several points of view on whether new federal stimulus money can be used for general, ongoing purposes, or whether it must be directed toward one-time-only spending on discrete projects. Gov. Perry has said he will refuse supplemental money that would require a substantive, and presumably permanent, policy change in the way unemployment benefits are distributed. Then there's the whole question of the state's "rainy day" fund. Must it be depleted before federal dollars can be used to plug "holes" in the budget? Hey, isn't it raining?
The result could affect formula appropriations to community and technical colleges—at least to the degree that any budgetary relief in one area (say public education or transportation) could liberate funds for use somewhere else. And that's just the beginning of the interesting possibilities. However, many officials are reluctant to go after funds that may evaporate from the revenue stream after the economy recovers.
The Senate's chief budget writer says he's relying heavily on federal stimulus money.
Senate Finance Committee Chairman Steve Ogden says, though, that he's not worried that Gov. Rick Perry will reject any more economic recovery aid from Washington.
Earlier this month, the governor said he'd reject about a half-billion for expanding unemployment benefits money because too many strings were attached. But Ogden, R-Bryan, unveiled plans Monday to spend about $14.2 billion, saying he has "no concern" Perry would reject any more of the funds.
Ogden made his comments as the Senate Finance Committee put finishing touches on a two-year budget he said would spend $177 billion, counting federal funds. He said that's $5.4 billion more than proposed in the Senate's "base budget," filed in January.
Of the $14.2 billion of stimulus money Ogden wants to spend, $10.9 billion would be inserted into the two-year state budget. The rest would plug holes in this year's budget, which ends Aug. 31 – plus add some money for roads and public schools.
Sen. Jane Nelson, R-Flower Mound, objected to the plan, warning that use of stimulus money to expand ongoing programs is a mistake. But other Republicans backed Ogden, as did all Democrats on the committee.
Ogden and Lt. Gov. David Dewhurst said using most of the stimulus funds means budget writers haven't had to tap the state's "rainy day fund," which Comptroller Susan Combs has said will have $9.1 billion by August 2011.
As lawmakers try to determine what can and cannot be done with the stimulus money, a crucial question has arisen. The purpose of the stimulus money is to help states fill holes in their budget. The question is: Does Texas have a hole—or, to put it another way, will the feds decide that Texas doesn’t have a hole? The issue here is the Rainy Day fund. Texas has socked away $7 billion with more to come. Will the feds say that Texas doesn’t really have a hole, because it could use the Rainy Day fund to fill it? This is a question that is worrying appropriators. Will the feds say, you have to use your own money before you can use our money?
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