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Texas Senate passes budget restoring some cuts made in 2011

By Corrie MacLaggan

AUSTIN, Texas (Reuters) - The Republican-controlled Texas Senate approved a two-year budget bill on Wednesday that calls for a 7.7 percent increase in state spending over the previous cycle, restoring some 2011 cuts to education and adding money for mental health services.

The 29-to-2 vote with two Democrats dissenting sends the $94.1 billion spending proposal to the state House of Representatives, which also has a Republican majority. The total proposed budget, including federal funds, is $195.5 billion, a 2.9 percent increase.

The budget for the fast-growing state "is a model of fiscal conservatism that holds spending below inflation and population growth yet still funds our state's priorities," said Lieutenant Governor David Dewhurst, a Republican, who presides over the state Senate.

Texas Comptroller Susan Combs projected earlier this year the Legislature would have $101.4 billion available to spend, thanks to higher-than-expected tax collections boosted by economic growth. That included $8.8 billion expected to remain at the end of the current budget cycle.

The budget bill leaves $409.5 million in remaining available revenue, said Tommy Williams, chairman of the Senate Finance Committee.

The measure passed after hours of discussion that was less contentious than in 2011, when lawmakers cut $4 billion from schools due to a budget shortfall. The new budget -- for 2014 and 2015 -- includes an additional $1.4 billion for schools.

Democrat Wendy Davis said she voted against the bill because it provided too little for schools.

"This budget fails Texas children," Davis told her colleagues.

The bill adds $240 million to reduce waiting lists for mental health and substance abuse programs, an infusion that came in light of questions about mental health funding following recent school shootings, Williams said.

In December, a gunman shot dead 20 children and six adults at an elementary school in Newtown, Connecticut.

The proposal includes an additional $66.8 million for wildfire prevention. In 2011, the most destructive wildfire in Texas history burned 34,000 acres, destroyed 1,600 homes and killed two people east of Austin.

The proposed budget also provides for pay increases for high-turnover state jobs such as Child Protective Services caseworkers.

The proposed budget lacks the tax relief that Republican Governor Rick Perry called for earlier this year, in part because that would require separate legislation, Williams said. Perry did not offer specifics on his tax relief proposal.

Combs estimated earlier this year the state's rainy-day fund would have $11.8 billion at the end of the 2014-2015 cycle. Lawmakers are considering tapping the rainy-day fund for water and transportation projects.

Perry signed a bill this month that provides $4.5 billion for the state's Medicaid program, which lawmakers underfunded in 2011.

(Reporting By Corrie MacLaggan; Editing by Daniel Trotta and Leslie Adler)

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