Texas lawmakers approve bill that cuts school funding

AUSTIN, Texas (Reuters) - The Texas House and Senate on Tuesday evening sent Governor Rick Perry a bill that cuts $4 billion from public schools over two years.

Balancing the state's 2012-2013 budget -- as required by the Texas Constitution -- depended on the passage of the school finance measure, which would delay payments to districts and reduce the amount the law says the state must pay districts. The state has a two-year budget cycle.

"We have to pass (Senate Bill 1) to fund our schools," House Appropriations Chairman Jim Pitts, a Republican, said during debate on the measure earlier this month, according to the Austin American-Statesman.

But Democratic state Representative Mike Villarreal of San Antonio called the bill the "final nail in the coffin" for Texas schools.

"This legislature will go down in the history books as the worst for public education in a generation," Villarreal said in a statement on Tuesday.

Republicans have the majority in both chambers.

Perry, a Republican who has said he is thinking of running for president, signed the $172 billion state budget into law in mid-June. It spends $15 billion less than the last budget cycle.

The school finance bill died at the end of the regular legislative session in late May after a filibuster by a Democratic senator, Wendy Davis, who objected to the school cuts. Perry then called lawmakers into a special session to resolve the school finance issue.

The last day of the special session is Wednesday. The House is scheduled to meet then, but the Senate wrapped up on Tuesday.

Davis and other Democrats said the cuts to schools would be devastating, leading to teacher layoffs and larger class sizes. But Republicans said the school finance measure was necessary in order to ensure a budget that did not raise taxes or dip into the state's estimated $6.5 billion rainy day fund.

That's what was left in the fund after lawmakers, with Perry's blessing, did approve spending about a third of the reserve, funded by a tax on the state's oil and natural gas production, to close a deficit in the 2011 budget.

The state's budget cuts came in the face of a shortfall 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.