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A Texas Senate committee on Wednesday approved the use of $3 billion from the state's Rainy Day Fund to help bring into balance the $176 billion state budget proposal for the next two years.

In all funds, the Senate plan would still make about $11 billion in cuts, compared to the current budget. But the cuts are much less severe than those in the bare-bones House version.

Bracing for a fight, Republican Sen. Steve Ogden said he's prepared to defend the legislation to get it to the governor's desk.

"This bill keeps Texas government functioning and essential services available to Texans without doing harm to the private sector," he said, shortly after the bill was approved. "It doesn't generously meet the essential needs of Texas, but I think it's adequate and I think in these circumstances adequate is a pretty big deal."

The state is facing a revenue shortfall of at least $15 billion. The hole is partially because of the economic downturn, but a structural deficit in the state's taxing system also has contributed to the gap.

Despite resistance from conservatives, including many in the House and Gov. Rick Perry, Ogden said he couldn't have gotten the bill out of committee without tapping the Rainy Day Fund, the state's reserve fund. The contingency language only allows money from the reserves to be used as a last resort and requires the money be spent on public school operations.

The 11-4 vote sends the 2012-2013 budget to the full chamber for consideration, which Ogden said it will likely do late next week. Three Democrats and one conservative Republican, Houston Sen. Dan Patrick, voted against the budget.

The plan would still underfund public schools by about $4 billion. But the cuts aren't as severe as those approved by the House.

"While this causes pain, it is pain that's bearable compared to House Bill 1 that is unbearable," said Rep. Chuy Hinojosa, a Democrat who served as vice-chair of the Senate Finance Committee.

"We don't have to close out nursing homes. We don't have to move 60,000 elderly out of nursing homes, ... we don't have to lay off hundreds of thousands of teachers."

The Senate plan would cut reimbursement rates to Medicaid providers by 6 percent, compared to more than 10 percent proposed in the House. Nursing home advocates warned that cuts in the House plan would force the closure of hundreds of nursing homes that cater to elderly and disabled residents who depend on Medicaid.

The two chambers will work out their differences after the full Senate has voted.

Three Democrats and one conservative Republican voted against the proposal.

www.reliableins.net

Posted 11:49 AM

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