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Stimulus funds throw wrench into Capitol works
February 25, 2009

State Rep. Sylvester Turner, D-Houston, asked House Speaker Joe Straus a series of questions Tuesday about which committee was in charge of spending stimulus dollars. Straus said it would be up to the budget-writing Appropriations Committee to act on the recommendations of a newly formed panel, led by Democratic Rep. Jim Dunnam of Waco , that is reviewing agencies' plans for spending the stimulus dollars.

Written by Jason Embry, The Austin American Statesman

Passage of a $787 billion stimulus package by the Democrat-controlled Congress has thrown the Republican-controlled Texas Legislature off-kilter.

Some small-government conservatives, most notably Gov. Rick Perry, say the stimulus package is an affront to the economic policies that allowed Texas to stay in relatively good budgetary shape while other states cope with huge shortfalls.

Advocates for more state services, meanwhile, see a rare opportunity to improve programs that they say have left too many Texans uninsured, underpaid and unprepared for college and the work force.

Nobody seems certain about who has the last word on how much of the money Texas will spend in a two-year budget expected to exceed $170 billion. But this much seems clear: The possible injection of $17 billion in federal stimulus dollars has dramatically shifted the dynamics of this year's legislative session. When the session began six weeks ago, lawmakers talked of dipping into their $9.1 billion rainy-day fund to cover growth in state programs stemming from population increases and inflation. Now the question has shifted to how much money, if any, Texas will leave sitting on the table.

"We no longer have a hole. We have a mound of dirt, and we're trying to figure out how to spread it around," said Dale Craymer , chief economist for the Texas Taxpayers and Research Association , a nonpartisan business group.

For Perry, the stimulus package is an annoyance and an opportunity.

Passage of the stimulus package has put pressure on Perry to spend more money on government, especially because that money is coming from federal tax dollars instead of state coffers. It becomes more difficult for him to describe Texas government as lean and efficient when the state budget will be padded by billions of dollars from Washington. At the same time, he doesn't want to turn away a pot of money that was filled in part with tax dollars from Texans.

But the stimulus package also has given Perry a platform from which to rail against Washington — and he seems to be relishing it, particularly since his likely challenger in next year's Republican primary, U.S. Sen. Kay Bailey Hutchison, has been in Congress for more than 15 years.

Perry points out that unemployment is lower in Texas than in the country at large, suggesting that Washington could best stimulate the economy by cutting government spending and making the regulatory climate more friendly to businesses.

"There are some who believe that the government's job is to rescue every person who ever got in over their heads," Perry told the Texas Association of Realtors on Tuesday. "But I tend to believe in a different role for government."

Legislators and Perry's staff, meanwhile, are still trying to get a handle on who will decide if and where stimulus dollars are spent in Texas.

State Rep. Sylvester Turner, D-Houston, asked House Speaker Joe Straus a series of questions Tuesday about which committee was in charge of spending stimulus dollars. Straus said it would be up to the budget-writing Appropriations Committee to act on the recommendations of a newly formed panel, led by Democratic Rep. Jim Dunnam of Waco , that is reviewing agencies' plans for spending the stimulus dollars.

Turner, saying he was concerned that the stimulus money will supplant spending on programs that the state would be providing anyway, said after the exchange that it was still unclear who would make the final call in the House on stimulus dollars.

"I'm going to keep asking, because somebody should know," Turner said. "This is a 140-day session. We have less than 100 days left. Somebody needs to know quick."

Some of the confusion centers on how the stimulus money will flow from the federal government. Perry's aides said they think he can block some of the money from reaching legislative budget writers, while some lawmakers say they think they can override any such decision that Perry makes. If lawmakers want to spend money that Perry doesn't, they can weave those dollars into the state budget in a way that Perry would have to veto unrelated programs to cut them out.

A separate question that many lawmakers are grappling with is how much of the stimulus money will flow straight to state agencies or school districts, instead of going through the budget-writing process that lawmakers typically use.

"It's my personal opinion that the federal stimulus money should go through the appropriations process like most other federal funds," said Senate Finance Committee Chairman Steve Ogden, R-Bryan . "But whether that's possible or legal, I don't know. We're trying to figure that out."

Dunnam said he hopes some clarity will come over the next month as federal officials write rules for spending the money. And since a small group of House and Senate negotiators typically writes the state budget in the closing weeks of the session, many of the questions now surrounding the stimulus process could be answered when decision time comes around.

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