Today’s Senate session cast in stark relief two different leadership styles: that of Gov. Rick Perry and Sen. Steve Ogden, who was elected Senate president pro tempore. Perry expressed his belief that the Legislature could produce a balanced budget with no additional revenues, noting that the public had spoken loudly on Election Day in favor of a conservative budget. “I am confident we are going to heed their message.” Then, he announced he was giving emergency designation to two items of legislation, one regarding eminent domain and one abolishing sanctuary cities in Texas. The latter earned Perry applause from the Senate gallery. Then, Ogden, chairman of the Senate Finance Committee, laid out in direct an unvarnished terms the perilous condition of the state’s fiscal house. Medicaid, the program for providing healthcare to the poor, will cost the state billions more this biennium because the federal matching will drop from 70/30 to 60/40. In real dollars, that will cost the state “$4.5 billion that has got to be placed with something.” He decried the complicated formulas used by the federal government for reimbursing hospitals for various procedures and said that a managed care system could save the state $4 billion. “Our first job is to figure out how to save Medicaid. We have got to reform it,” he said. To me, the statement sounded like a bipartisan call to arms: It assumes everyone in the chamber wants to save Medicaid, and everyone recognizes the need for reform. Ogden had more solemn news about school finance funding. The 2006 plan to cut property tax cuts –and replace the money with a new margins tax – isn’t working. The margins tax is producing about $2 billion a biennium less than it was supposed to. “Here’s the reality: none of us were elected to raise taxes. But the margins tax is different. If we don’t change the trajectory, property taxes will go up for sure,” he said. Yesterday, Perry called the Rainy Day Fund off-limits. Ogden told the Senate that by drawing $9.2 billion from that source, a balanced budget is within the Legislature’s reach. On the first day of the 82nd Session of the Texas Legislature, the governor, who yesterday called the Rainy Day Fund off-limits, barely mentioned the budget problem and declared sanctuary cities an emergency. From Ogden, we heard some painful truths about the state’s fiscal picture, and a challenge to his fellow senators: “Check your political considerations and ambition at the door and let’s do our very best for the 25 million people who call Texas home.”
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