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Texas House and Senate send governor budget that cuts spending

Perry makes remarks at the Conservative Political Action conference (CPAC) in Washington
Perry makes remarks at the Conservative Political Action conference (CPAC) in Washington

By Corrie MacLaggan

AUSTIN, Texas (Reuters) - The Texas House and Senate late on Saturday approved a two-year budget that spends $15 billion less in state and federal dollars than the last budget cycle.

The $172 billion budget, approved in the House by a vote of 97-53 and in the Senate 20-11, now goes to Governor Rick Perry, who commended the proposal for not raising taxes or tapping the state's $9.7 billion rainy day fund.

Perry said the budget reflects the demands of voters last November, when a wave of Republicans were swept into office.

"The Texas budget shows Washington and the other 49 states that it's possible to make government live within its means without raising taxes," said Lieutenant Governor David Dewhurst, who, like Perry is a Republican.

The 2012-2013 budget -- Texas has a two-year budget cycle -- slashes $4 billion from schools. Those cuts violate state law, so the budget plan depends on the passage of another bill that would tweak the state's school finance system. The last day of Texas' biennial legislative session is Monday.

Most Democrats voted against the budget, saying it will lead to teacher layoffs and criticizing what they called accounting tricks, such as pushing some $4.8 billion in projected Medicaid expenses to the next budget cycle. Democratic Representative Joaquin Castro called it the "worst budget in a generation."

The cuts were not as deep as what the House initially proposed in the face of a budget shortfall. Representative Jim Pitts, the Republican chairman of the House Appropriations Committee, said that the earlier budget proposal "dangerously underfunded critical parts of state government."

The budget deal crafted in a House-Senate conference committee increased funding for schools, community colleges, student financial aid, nursing homes and border security compared to the initial House proposal, he said.

"It may not be as much as some would like, but it meets the needs with the resources we have available," Pitts told his House colleagues.

Democrats said they were not impressed.

"We've gone from apocalyptic to merely horrific and we're calling that an improvement," Democratic Senator Rodney Ellis said in a statement. "It's not. We are making huge cuts that will make the lives of millions of Texans much more difficult."

The state's budget shortfall is partly due to the economic downturn and partly due to the state's reliance on one-time money -- including federal stimulus dollars -- in 2010-2011. Also, a reconfigured state business tax designed to pay for 2006 school property tax cuts did not generate as much as expected.

(Editing by Jerry Norton)

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