AUSTIN Two Senate committees opened hearings today on bills relating to public education funding and additional revenue to balance the budget, the two issues that led to the Governor calling an immediate special session.

After SB 1811, a bill that would have used payment deferrals and tax collections speedups to find new revenue, died on the Senate floor during the regular session, the 2012-2013 budget passed by the legislature would not balance. Thursday, two Senate committees looked at bills that contain provisions considered in the regular session to balance the state budget and help school districts deal with reduced funding.

The first of these bills considered by the Senate Education Committee would create a permanent fund to pay for textbooks and other instructional materials. This bill, identical to a provision that died in SB 1811, passed the committee unanimously.

The second measure is aimed at giving school districts more flexibility to deal with teacher and staff pay without resorting to layoffs.

"Every teacher in the state of Texas today can only be fired," said Committee Chair Senator Florence Shapiro of Plano. "There are no other tools available to school districts. I truly believe that is a disservice to the teachers of the state of Texas."

Her bill would give districts the ability to furlough teachers, put them on unpaid leave, as long as public education funding levels stay below 2010-2011 appropriation levels. It also removes the "last in, first out" rules for termination, which meant that firings are based almost entirely on seniority and not merit.

The Senate Finance Committee looked at a number of bills intended to give legislators more revenue to balance the state budget, as well as one that would lay out how the state will distribute education funding cuts across districts.

The first bill, SB 7 by Flower Mound Senator Jane Nelson, would implement statutory changes needed to find savings in state health services.

During the regular session, Nelson chaired a subcommittee that was charged with finding ways to reduce Medicaid costs to the state. Her panel found more than $3 billion in efficiency savings, most of which could be achieved through rule changes at state agencies. Nearly $500 million in savings, however, require changes in state law. To get at these savings, Nelson's bill would move Medicaid prescription benefits under managed care programs, and would remove the prohibition on state managed healthcare in South Texas. It would implement an electronic visit verification system, to ensure that reimbursements to providers are paid for actual services. The bill would implement an outcome based reimbursement system, where doctors get state money for good outcomes rather than the current system where providers are paid based simply on the number of procedures performed. This bill was passed by the committee unanimously.

Next, the committee considered SB 1, which contains many of the provisions laid out in the regular session in SB 1811, including the education funding pieces. This bill would spread out the anticipated $4 billion in public education cuts for the next biennium across all districts in 2011. This translates into about a six percent cut to all districts. In 2012, the money comes out of target revenue, the funding levels locked in by the Legislature when it created the business tax in 2006. The bill also clarifies that the intent of the Legislature is to reduce target revenue each year until it is eventually eliminated in 2018.

The Education and Finance Committees will meet again Friday morning to finish testimony and vote on the considered bills. Some of these bills could come up before the full Senate for a vote when the Senate reconvenes at 3:30 p.m. on Friday afternoon.