Senator Eliot Shapleigh - El Paso, Texas

AUSTIN, Texas — Several Senate Democrats are complaining that the state budget as currently drafted would inappropriately use federal stimulus dollars to free up money that will eventually provide tax cuts for wealthy Texans.

The partisan bickering derailed an unrelated debate Friday in the Texas Senate, where both GOP leaders and Democrats huddled behind closed doors for more than an hour. Afterward, members from both parties vowed to patch things up, with one top Democrat expressing regret about the "tone" of his party's complaint.

The flap got started when 11 of the 12 Senate Democrats signed a letter sent Thursday to U.S. Education Secretary Arne Duncan. It said that the recently passed Senate budget, now facing a work-over in the Texas House, inappropriately spends $3.2 billion of the education dollars contained in the Texas piece of the federal stimulus pie.

Texas is getting almost $17 billion from a federal rescue package for states. Some Democrats say Republican leaders want to use the money to free up state money that otherwise would have been spent. The language in the bailout bill is generally designed to prohibit states from piling up big surpluses with the injection of federal dough.

"Instead of using that funding to pay for needs facing the state education system today, state leaders believe it is instead wiser to park the funding for use as future property tax cuts that primarily benefit the wealthy," the Democrats' letter said.

At issue is the state's so-called Rainy Day Fund, which — fattened with oil revenue — is expected to have a balance of over $9 billion by 2011. Critics say the budget essentially used federal money to supplant state revenue in order to preserve the surplus — money that could be used to fund future property tax cuts.

The Democrats' letter quotes from an exchange last month between Sen. Florence Shapiro, R-Plano, and an unidentified member of the Legislative Budget Board, a nonpartisan panel that advises the Legislature on spending matters.

"So we've taken money that's in the (federal stimulus package) and, for lack of a better word, and I know we hate this word, supplanted it for our general revenue?" Shapiro said.

"Yes ma'am, that's what that does," the board official responded.

Republican leaders, including Gov. Rick Perry, said in their own letter sent Thursday to congressional Democrats in Washington that the budget adheres to federal regulations that prevent states from putting stimulus money into rainy day funds.

In the state Senate, GOP officials reacted somewhat angrily to the Democratic complaints. After a private meeting with members of both parties, Sen. Steve Ogden, R-Bryan, author of the $182 billion Senate budget, said the reference to future tax cuts was "just a political partisan comment."

Meanwhile, the near-united front by Democrats seemed to be falling apart. Standing alongside Ogden was Sen. Juan "Chuy" Hinojosa, a McAllen Democrat who suggested he hadn't read the letter all that closely — even though he signed it.

"What I do regret is the tone of the letter," Hinojosa said. "I think the way we used the money was proper."

Hinojosa said Sen. Eliot Shapleigh, D-El Paso, was responsible for drafting the document. That prompted a hot reply from Shapleigh, who said the senators who signed on — Democratic Sen. Royce West of Dallas was the only one who didn't — had plenty of time to review it.

"I would hope that people would read what they sign," Shapleigh said.