Lawmakers look to close $5 billion shortfall

AUSTIN (AP) — Lawmakers took the first steps Tuesday toward closing a $5 billion budget deficit they created in 2011 by under-funding Medicaid, the health program for the poor and disabled.

Republican Rep. Jim Pitts, R-Waxahachie, warned members of the House Appropriations Committee that balancing the budget was required by the Texas Constitution.

"It is simply a matter of paying our bills that the law of the state requires us to pay," Pitts said. "If we do not provide additional funding for the state's Medicaid program it will run out of funds before the end of March, leaving the state without the funds for doctors, hospitals and nursing homes for the state to reimburse them for the services they have provided."

Analysts from the Legislative Budget Board reported that Medicaid needs $4.4 billion to continue operating through the end of the fiscal year, and that appropriating those funds will bring in $6.5 billion federal matching funds.

The Texas Education Agency also needs $630 million to pay schools districts what they are owed from the Foundation School Program, board experts testified.

Pitts will soon introduce a bill to cover the shortfall and Republican-controlled Legislature is expected to fast-track it.

Pitts also promised to include $161 million to help offset the costs of wildfires that burned across the state in 2011. The state is facing a deadline to obtain federal matching funds to help communities recover.

In 2011, lawmakers faced a $27 billion budget deficit and intentionally underfunded Medicaid and cut $5.4 billion from public schools.