AUSTIN, April 1 – Controversy surrounding Texas’ share of stimulus money resurfaced Wednesday when a border senator questioned whether the Senate Finance Committee misused billions intended for educationally and economically disadvantaged students.

Sen. Eliot Shapleigh, D-El Paso, believes $3.2 billion in federal dollars that was meant to improve opportunities for Title 1 students was instead supplanted into public education generally. He said this goes against the federal guidelines that mandate how states can use the money.

Approximately $10.5 billion of Texas’ $15 billion in federal aid was allocated for the state’s 2010 -2011 budget. The two-year budget is approximately $182 billion.

Shapleigh said that according to federal stimulus budget guidelines, if there is no budget shortfall for elementary, secondary or post-secondary education in Texas, the money that would have restored that deficit should instead be distributed to provide local educational agencies with grants for Title 1 students.

“Borrowing from (President) Obama to balance the budget on the backs of Texas’ neediest kids is not the right or moral choice,” said Shapleigh. “That $3.2 billion was meant to educate kids, not fund more tax cuts. Frankly this budget breaks the law when you do it. Budgets are moral documents and Texas is better than this budget.”

Shapleigh zeroed in on this aspect of the budget after listening to 45 minutes of testimony from the Legislative Budget Board and comparing that testimony to what is contained in House Resolution 1, which focuses on the stimulus bill.

During senate debate, Shapleigh questioned whether Sen. Steve Ogden, R-Bryan, the chair of the Senate Finance Committee, had considered what was stated in a letter jointly authored by Texas’ members of the United States Congress. The letter dictated how the stimulus money should be spent. In it, Shapleigh said, it states the stabilization fund was not intended so Texas could maintain its Rainy Day Fund, but instead to “immediately invest in (Texas) schools, strengthen education and improve student achievement.”

“You supplanted federal money that should go straight to Title 1 students and school districts and used the money, in my view and in the view of these congressmen that signed this, illegally,” he told Ogden.

Title 1 students are educationally and/or economically disadvantaged. Many live on the border and some are migrant students.

Ogden said he “believed” the finance committee correctly interpreted the federal guidelines.

“I will assure you senator that we played no games with this federal stimulus money,” Ogden said. “We tasked the Legislative Budget Board and others to review the statute and tell us as conservatively as they could how that money might be used.”

The senator added that as chair of the Senate Finance Committee he and the other members did their best to “understand what most people would readily agree is poorly written federal legislation.”

“There was no effort whatsoever to divert money from programs that Congress intended us to fund within the federal stimulus money to some other program that they didn’t,” he continued. “Money that you’re talking about with respect to school districts under Title 1 and IDEA will continue to flow to the school districts and so I am really uncertain about what the criticism is.”

Ogden added that should the current economic woes facing Texas worsen, the state’s reserves should be kept as full as possible to avoid an even more ominous budget shortfall when the Texas Legislature reconvenes in 2011.

When asked about that scenario and whether he thought next session’s budget would be even more difficult to put together, Shapleigh did not back away from his belief that stimulus monies should be used today.

“Deal with it now, don’t take money from kids to balance the budget,” he said.

Sen. Judith Zaffirini, D-Laredo, agreed that the intent of the federal funds is to provide an immediate effect.

“Article 12 (of the proposed budget) specifies how the stimulus funds will be spent and basically they should be used to stimulate the economy, literally to stimulate the economy, not to supplant general revenue,” Zaffirini told the Guardian, after the Senate floor debate. “If it is proven that general revenue was supplanted then we will have to look at that again and fix it."

Sen. Mario Gallegos, D-Houston, also expressed his concern that Secretary of Education Arne Duncan would come down on the State of Texas for misappropriating $3.2 billion that should have gone toward education. He asked Ogden if he was willing to “roll the dice and say (the Senate) is doing the right thing.”  

“Senator we are not rolling the dice. Under our constitutional duties we got 140 days to pass the budget. We are down to the last half of that session.” Ogden responded. “We don’t have much choice but to make the best judgment we can.”

Sen. Juan “Chuy” Hinojosa, D-McAllen, is the vice-chair of the finance committee. He agreed that formulating a multi-billion dollar budget was an arduous task but that without the stimulus monies, the budget would not have been balanced. He added that direction from the federal government on how the monies should be spent was unclear and not uniform.

“A lot of money we received from the federal government in stimulus funds was not specific in terms of the purpose of the monies. That allowed us to put back some of the money and make up the shortage in general revenue funds from the state,” he said. “On other funds they were very specific, such as construction of our expressways and highways.”

Hinojosa also concluded the committee did the best it could with what was dealt.

“It’s a huge budget. I don’t think anyone is going to be satisfied 100 percent. We did the best we could with the money we had and I think we did a very good job in making sure that we took care of all the essential services that the citizens of the State of Texas need,” Hinojosa said.

Asked what would happen if the Secretary of Education indeed concluded Texas misspent billions in stimulus funds, Shapleigh said the legislators might not make it too far from Austin after the regular session.

“Dollar for dollar it’s not clear what has been supplanted. If significant monies have been supplanted we are going to need a special session,” he said.

After about five hours of debate, the senate’s version of the budget was ultimately approved with a 26-5 vote. The five senators voting against the budget were Shapleigh, Gallegos, Wendy Davis, D-Fort Worth, Kirk Watson, D-Austin, and Rodney Ellis, D-Houston.