We invited three advocates to share their preferences and ideas for what the state's lawmakers should do in the face of rising costs and tight revenues. And now, Bill Hammond of the Texas Association of Business, Talmadge Heflin of the Texas Public Policy Foundation, and Eva DeLuna Castro of the Center for Public Policy Priorities.

There's something to be said for leaders in the Texas Legislature sticking to their guns and releasing a state budget that keeps spending within existing revenues.

To my friends in the House and Senate, I say: We must continue to fight to ensure that we implement cost-saving reforms that reflect Texas' commitment to economic growth. But our current budget shortfall isn't a time to be penny-wise-and-pound-foolish.

The state will have $72.2 billion available for general-purpose spending during the 2012-13 biennium, leaving a $15 billion gap from the current general revenue spending of $87 billion. How do we close this gap? It will take grit and courage to address the shortfall without raising taxes, creating new fees or increasing existing ones. Difficult? Yes. Doable? Absolutely.

First, let's hold the line on general revenue spending at its current level of $87 billion for the biennium. Next, while the sky isn't falling, it sure is raining. So let's have the courage to tap the Rainy Day Fund for $6 billion, a prudent and appropriate action.

To control health care costs, one simple fix is to remove a loophole that allows the Rio Grande Valley to effectively opt-out of Medicaid managed care. This single change — expanding Medicaid managed care statewide — would result in $1.2 billion in savings.

We need efficiencies in government, including education where smart budgeting and reforms will offer a significant return on our investment by way of an educated, skilled workforce.

We've worked hard to raise high standards for students in pre-kindergarten through high school. To that end, we must use the Available School Fund for its constitutionally intended purpose—student textbooks and instructional materials, including technology. Budget writers should prioritize $550 million of the fund for digital and print materials for pre-kindergarten, English as a second language, writing and science,--all of which are due to classrooms this fall.

We could also use more of the $1.9 billion Available School Fund to restore programs eliminated in the base budget that have had proven success in improving education in Texas. Among these strategic investments are a $270.9 million technology allotment; $223.3 million for pre-kindergarten programs that provide a solid foundation for our youngest students; $385.1 million for incentive pay for our school's most outstanding teachers; $51 million for proven secondary level strategies that will improve post-secondary readiness and graduation rates; and $20.3 million for the virtual school network.

There's also a case to be made for fully funding effective, efficient state programs in public and higher education that are critical to our State's long-term competitiveness and prosperity. I'd argue for the TEXAS Grants program to be kept at current spending levels, while making reforms to ensure greater productivity. We must graduate more students with degrees or post-secondary credentials, and a priority-based TEXAS Grants program that remains fully funded will certainly help us get there. Higher education funding should be kept level too, but let's demand better performance by requiring 10 percent of higher education funding to be based on completion rates.

Plenty more opportunities exists to make strategic cuts, accounting tweaks and smart updates to state law to get us to the $87 billion budget target.

For one, let's go ahead and delay the date of payments by the State by one day into the next fiscal year, a useful tactic used when Texas last faced a significant budget crunch in 2003. This simple action could save the State $3 billion to $4 billion alone.

While we don't have to expand the gambling footprint, we can and should pass legislation to allow slot machines at existing Texas horse and dog racetracks and Native American Indian reservations. These machines would generate as much as $850 million in direct state tax revenue during the current biennium and nearly $1 billion per year at full implementation.

We can pass legislation that requires probation with mandatory treatment for first-time, low-level drug possession offenders with no prior violent, sex, property or drug delivery crimes, allowing for an estimated $500 million savings by 2012.

As for the remaining $2.5 billion, it's reasonable to consider some of the thoughtful recommendations laid out in recent days by organizations like Texas Higher Education Coordinating Board, the Texas Public Policy Foundation and Texas Conservative Coalition Research Institute.

What I have set forth could best be summed up as a rational proposal for budgeting. Let's make strategic cuts and responsible investments that will ensure our state's continued prosperity.

Bill Hammond is President and CEO of the Texas Association of Business. He served four terms in the Texas House of Representatives.

Austin insiders say that additional revenue is needed to close the state's projected multi-billion dollar budget shortfall. Without the extra income, they claim, lawmakers risk the state's future fiscal health and prosperity. But is that really the case? Is more money the only viable solution?

Of course not. Just as anyone managing a household budget knows, when a family's expenses grow beyond its income, the solution is not to instantly drain your savings and demand a raise from your boss. The proper response is to cut back on household expenses — particularly if your family's spending habits resemble anything close to the state's.

According to the Legislative Budget Board, state government spending increased by nearly 300 percent between fiscal years 1990 and 2010, or 139 percent after adjusting for inflation. During the same period, Texas' population grew by only 49 percent. Considering this kind of spending trajectory, it is little wonder that Texas' finances have gotten out of whack. Maintaining this level of expenditure growth is not sustainable, and lawmakers must now make reasonable adjustments on the spending side of the state's ledger.

Now the hard part: If the most sensible solution to the state's fiscal woes is reducing spending, which areas of the budget should the Legislature prune?

In short, there should be no "sacred cows" this session: Every expenditure must be on the table. But we should focus particular attention on getting government out of doing things that individuals or the private sector can take care of themselves, such as promoting tourism, history and the arts, or determining how much consumers should pay for electricity, telephone service or insurance.

Likewise, there are a lot of things we can do without for a biennium (or two) while we try to get our fiscal house back in order. We can postpone the purchase of new parks, delay renovations of historical properties and get by without some recent and expensive environmental and health care spending.

We also need to think big. Health care and education spending dominate the budget, and if we are going to successfully tackle the shortfall, we need to look at ways to stretch our dollars further in these areas.

For example, lawmakers should consider such policy options as expanding Medicaid managed care, creating a health savings account option for state employees, cutting back all optional health programs to federally required levels, reducing university formula funding across-the-board and giving school districts the tools and the prodding to curb administrative bloat in K-12 education.

Finally, the Legislature should consider significantly paring back, if not altogether eliminating, state economic incentives and subsidies. If our low taxes, limited and predictable regulations, right to work laws and civil justice system aren't enough to make Texas attractive to some businesses, that would suggest they're the type of rent-seeking transients Texas can do without.

In conjunction with these budget reduction options, lawmakers should also take care not to tap the state's rainy day fund or resort to accounting gimmickry.

First, it is important to realize that one-time measures and spending sources should not be used to support ongoing obligations. If your family's budget is consistently exceeding its bounds, no reasonable person would advocate that you raid your savings account to enable day-to-day spending. This only prolongs the root problem of excessive spending.

Perhaps more importantly though, this session does not appear to be the state's only difficult budgeting cycle. According to research we published last month, "Final Notice: Medicaid Crisis," Medicaid costs before ObamaCare will double every 10 years through the next three decades. ObamaCare adds 3.1 million people to Texas' Medicaid rolls by 2014, and Texas will need an additional $10 billion in the next budget to meet those costs. The state will need to preserve as much of its financial flexibility for as long as possible to help avoid future fiscal crises.

Holding the line on government spending is never easy; it is far more satisfying to give than it is to take. But in today's economic climate, the reality is that we can no longer afford the level of government spending we have had in the past. Spending must be brought in line with income, not the other way around.

Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. He served 11 terms in the Texas House of Representatives and chaired the House Appropriations Committee in 2003, when the state had a $10 billion budget shortfall.

Budget hearings have been underway for only a few days, but it's already clear that $72 billion in General Revenue won't be nearly enough to meet the needs of Texas. Instead of cutting down to the revenue estimate, the 82nd Legislature must take a balanced approach that uses our reserves and adds revenue. And we have to start by casting aside wishful thinking; we are writing the 2012-13 budget, with higher costs and increased enrollment in education and health care services — not some past budget. (In fact, the 2006-07 budget is the most recent one that could be covered with $72 billion in General Revenue. That's also the last budget before $14 billion in local property tax reductions were added to the state appropriations act; more on this later.)

Future needs — what's called "current services" levels — require at least $99 billion in General Revenue. With only $72 billion available, the revenue shortfall endangering state services is $27 billion. That $99 billion does not include any "wish list" items. Agencies requested almost $107 billion in General Revenue to expand or improve state services, but only current services costs for education, health care, and prisons are included the $27 billion shortfall calculation.

So what's the right way to close a 27 percent gap in one of the lowest-spending, lowest-taxing states in the nation? What options do we have that won't send the Texas economy into a tailspin?

Use the Rainy Day Fund: all $9.4 billion. It's officially called the Economic Stabilization Fund for a reason. State budget cuts could easily lead to layoffs of more than 100,000 school district employees, costing another 140,000 private sector jobs. Can the Texas economy afford to lose a quarter of a million jobs? Legislators overwhelmingly agreed that tapping the fund was the right thing to do in 2005 (HB 10, Pitts), 2003 (HB 7, Heflin) and earlier sessions when it was raining nowhere near as hard as it is now.

Smoke and mirrors: $5 billion. Delaying July-August 2013 payments to school districts could push $3.5 billion in costs into fiscal 2014 and buy much-needed time to see if state revenue recovers faster than is currently forecast. Yes, this could cause a few school districts some cash flow problems, but not as much as the almost $10 billion cut to the Foundation School Program proposed in the House budget draft. Where possible, postpone one month of payments to Medicaid and other providers, along with other large payments to non-GR accounts and pension systems, or speed up collections of General Revenue so they happen in 2013. Anything that buys time and can be undone in the future is preferable to cuts today. (Note: This does not include cutting low-income utility assistance and other services funded by dedicated General Revenue to help certify the budget; those go in the category of "cuts today").

New revenue options: $12.5 billion. Enforce existing tax laws ($500 million). Enact a hospital quality assurance fee ($350 million) to help match federal Medicaid dollars. Eliminate or reduce outdated tax breaks — for example, the high-cost-natural-gas exemption ($2.3 billion a biennium) and the sales tax timely filer/prepayment discounts ($150 million). Enact a Healthy Texas Tax Bill that boosts the cigarette tax by $1 a pack ($1.5 billion biennially), taxes sugar-loaded drinks ($2.5 billion biennially) and raises taxes on beer ($100 million) and other alcoholic beverages. Expand the sales tax to cover certain business and professional services ($5 billion).

What should we do beyond the session? Part of the revenue shortfall is due to the Great Recession. The recession will be temporary, so the revenue losses it caused can be replaced with the Rainy Day Fund or "smoke and mirrors." But the Legislature must also plug the hole caused by 2006's school property tax cuts. The structural deficit caused by the failure of franchise tax changes to generate anywhere near the local tax revenue lost by school districts has created a $10 billion biennial hole in the state budget. Permanent structural changes (such as closing the high-cost gas tax loophole or expanding the sales tax base) will be needed to fix this structural deficit. If we don't take a balanced approach now, our longer-term problems will be that much harder to solve.

Eva DeLuna Castro has been a budget analyst at the Center for Public Policy Priorities since 1998. She worked as a researcher and writer at the Comptroller's office for six years.

The hotly contested race for House District 48 continues nearly three months after polls closed. After a recount showed him trailing Rep. Donna Howard by just 12 votes, Republican Dan Neil appealed to the full House, summoning lawyers, subpoenas and testimony from voters about their residency and how they voted. Officials recounted 265 mail-in ballots and, in good news for Howard, left the tally unchanged. When proceedings conclude, Rep. Will Hartnett, R-Dallas, will make a recommendation to a special House committee, which will then make its own recommendation to the full House, which has the final word on who gets the seat.

After an unusual cold front brought ice and snow to large portions of Texas, the Electric Reliability Council of Texas — ERCOT — announced that the demand for power was overwhelming the state's electric grid. Texans woke up to rolling blackouts after ERCOT instructed utilities to institute temporary outages to its customer base of about 22 million. ERCOT also asked customers to reduce usage as much as they could to avoid temporary interruption of electrical power, which lasted between 10 and 45 minutes for most of those affected.

With Houston caught up in lawsuits surrounding a public vote in November to remove the city's red-light cameras, a new study showed a drop in fatalities in areas in which the cameras are used. The Insurance Institute for Highway Safety conducted a study of 99 cities, 14 of which used red-light cameras. It showed a 24 percent reduction in fatal accidents when comparing those cities that had installed the cameras between 1996 and 2004.

Gov. Rick Perry got some progress on one of the five emergency items on his to-do list. Though voter ID still awaits House approval, the Senate gave its approval to the measure. Republicans have the votes to get it passed in the House, but more debate is expected over expanding the types of ID that will be accepted. And they can't do anything in the lower chamber until they've got committees named.

The State Board of Education will keep Gail Lowe as its chairwoman, pending Senate confirmation. Gov. Perry reappointed the conservative Republican to serve as the head of the committee overseeing Texas' public school system, a role she first took on when previous chairman Don McLeroy, R-Bryan, was unable to garner the required two-thirds support in the Senate in 2009. Lowe characterizes herself as sharing the same socially conservative credentials as McLeroy.

Gaping budget shortfall aside, the state trust fund that helps Texas communities defray the costs of hosting major sporting events has granted $31.2 million for the Super Bowl. Dallas, Arlington, Fort Worth and Irving are expected to contribute $4.3 million, with the state kicking in the balance of $26.9 million. They're betting the event will generate enough additional tax revenue to offset the upfront cost, and the Major Events Trust Fund has been expanded to include smaller communities and other events, like Formula One racing. Proponents tout the grants as an effective lure for major events to be scheduled in Texas cities.

BP announced plans to cut its refining capacity and focus on exploration and has put its refinery in Texas City on the block. Since the disastrous explosion there in 2005, the company has poured over $1 billion into equipment upgrades and has spent more than double that to settle claims related to the accident. It's also found itself on the hook for millions in federal fines. Given the massive size of the plant, there isn't a large pool of buyers who can afford the multibillion-dollar price tag, but there has been interest in the facility in the past, and given the limited refining capacity in the U.S., a buyer could be found before the target date of the end of 2012.

Several Texas senators met behind closed doors — where else? — to discuss whether the enhanced security at the Capitol is sufficient. Metal detectors and heightened state trooper patrols are already in place, with surveillance cameras to come, but some senators still feel uneasy, particularly because citizens with concealed handgun permits are able to pass freely through the metal detectors. The senators were briefed on how to handle a situation where a gun is pulled and were given more details on security measures they may have been unaware of, like an alert service for cell phones.

A new report on the Fort Hood shooting that killed several servicemen and women could leave Texas lawmakers clamoring for more oversight of military installations to prevent a future massacre. On Nov. 5, 2009, Maj. Nidal Hasan allegedly went on a shooting rampage and killed 13 people on the base and injured several dozen more. A report released this week by Senate Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, I-Conn., and ranking member Susan Collins, R-Maine, indicates the government could have prevented the shooting. The findings have U.S. Sen. John Cornyn, R-Texas, calling on Congress to act and not allow soldiers' safety "to play second fiddle to political correctness."

"This report makes clear that the FBI and the DoD [Department of Defense] between them, had enough pieces of the puzzle to prevent Maj. Nidal Hasan from committing this atrocity, but failed to do so. It also confirms that military leaders failed to confront the threat of homegrown Islamic terrorism within their own ranks," Cornyn, a member of the Senate Armed Services Committee, said in a statement.

Sen. Kay Bailey Hutchison added: "The report reveals what many of us feared — there were clear and troubling warning signs that were ignored. We must learn from the violent attack at Fort Hood so we can prevent future tragedies."

According to the report summary, though officials within the Department of Defense and the FBI didn't have detailed information about the time and place of the attack, they "collectively had sufficient information to have detected Hasan's radicalization to violent Islamist extremism but failed both to understand and to act on it."

House Higher Education Chairman Dan Branch, R-Dallas, played professor this week, delivering a lecture to students at the University of Texas as part of the Texas Politics speaker series.He noted that after much hand-wringing over universities bearing the brunt of the 5 percent statewide cuts in 2010, their cuts in the House and Senate base budgets pale in comparison to those of public education and health and human services. "Public ed may be coming after us," he said.

His main priorities for the session include improving outcomes, reducing students' time to completion of college and increasing efficiency. The first can be done, he said, by tweaking eligibility standards for financial aid programs. For the second, he recommends required degree plans. And for the third, boosting digital learning.

The proposed budgets cut $431.2 million from financial aid — essentially maintaining funding for current recipients but offering little for new students who will soon be entering college. Branch said he is hopeful that some new revenue will be found to alleviate that situation.

He added that the public isn't willing right now to support increases in state revenue, referring to two polls — one from the major newspapers and another from the conservative Texas Public Policy Foundation — that showed strong support for trimming higher education.

"Maybe we just haven't done a good job selling," he said, "or maybe they're right." Either way, he said, higher education needs to do better marketing. "This is a job-creating machine," said Branch, offering the pitch.

On a hopeful note, he indicated that hardship could lead to innovation. "But for this pressure," he said, "I don't think we'd come up with the ideas that we're going to come up with."

Think you can get 6,500 school leaders together in a room reach any agreements? Maybe: Superintendents and board members from districts across the state who gathered this week in Austin say they'll present a united front and tough words for lawmakers this session.

Superintendents and trustees (here for the Texas Association of School Administrators' and Texas Association of School Boards convention) are asking lawmakers to use the Rainy Day Fund and search for new revenue through fees instead making $10 billion in proposed cuts (quick back-of-the-envelope: there were 4,824,778 students in Texas public schools last year, so $10 billion in cuts from the biennial budget would be a little more than $1,000 per student, per year.) They also want lawmakers to fix the current school finance system, which Northside superintendent and former TASA president John Folks calls one of the "most inequitable and inadequate" funding mechanisms in the country.

In remarks that could portend a new school-finance lawsuit, school leaders warn that the Texas Constitution mandates that the state provide a "free and adequate" education to all children, saying that "there's no clause that says 'if funds are available.'"

Texas Education Commissioner Robert Scott told the school leaders that though the 82nd Legislature would be "the most difficult legislative session facing public education in my lifetime," he believed that "there are ways to make the budget work."

"I don't stand here in fear. I stand here looking at a problem," he said, adding, "Now is not the time to lose our heads. Now is not the time to point fingers and scream and yell. Now is the time to solve the problem."

Scott suggests deferring payments into the next biennium, tapping the Rainy Day Fund, easing regulation of school districts and changing the state's school financing formulas as ways to help reduce the gap between funding per student in rich and poor districts. His first priority, he says, will be to protect the Foundation School Program, which finances the state's basic educational curriculum. Then he will ask for money to pay for end-of-course exam materials and discretionary grants like teacher incentives and early childhood education.

"I believe the budget situation will improve by the end of the session," he told the group. "I just don't know how much."

Scott also addressed the possibility of postponing the roll-out of the state's new student assessment program, the STAAR test — an idea that drew cheers from the audience. While he said the TEA is on track to implement the new standards, he said that will be "the debate of this Legislature."

"If you are 15 billion in the hole, what are you going to do with student expectations?" Scott said, adding, "If there is no money, will you raise standards?"

This week, we asked our insiders about the sonogram bill — another of the issues on Gov. Rick Perry's list of emergency items open to immediate action from the Legislature. And about related social issues. For instance, most of our insiders don't think a Republican can win a high-profile Republican primary without pro-life forces behind them. The sonogram bill would require doctors, within an hour before performing an abortion, to do a sonogram and play the audio so the mother can hear the heartbeat and to put up video where the mother could see the fetus.

The insiders think that's more a political issue than something that addresses a real problem — 81 percent to 7 percent, while the rest think it's a combination of those things. Will it pass? The insiders have little doubt, with 80 percent predicting passage.

Our open-ended question was " Given the makeup of the Texas Legislature, what social legislation will pass this session that was blocked before, and how will that play into the next elections?" The full set of responses is available in our Files section, but here's a sampling:

• "Hopefully these knuckleheads will take care of issues of critical importance first (budget, redistricting, business friendly policy) before tackling any social monsters from the Cathie Adams School of Nonsense."

• "Most any social legislation which was previously proposed but did not pass is likely to pass this Session. How that will play in 2012 is hard to say."

• "What social legislation won't pass is more like it. Republicans could make being a Democrat a first-degree felony, and it would probably sail through both chambers and get rubber stamped by the Governor without any political ramifications in the next election."

• "Don't know, but whatever does or does not pass will not be a major issue in the next elections. Taxes and government services will be the dominant theme."

• "Whatever the Senate doesn't block."

• "Given the makeup of this legislature, I'm not sure I understand why they're not outlawing abortions altogether. A direct challenge to SCOTUS would be right up their alley."

• "Vote ID. Passing it will actually help protect the moderates in the primaries"

• "Until we see a few votes it is hard to tell how the huge freshman class shakes out, but with a 101 R's in the House they can probably pass everything that 12 D's in the Senate don't block."

• "Voter ID and Immigration will both pass and create a generation of motivated Latinos who will vote Democratic."

• "Hopefully, dealing with the budget and redistricting will keep them too busy to interfere with our personal lives."

• "Nothing will pass. A lot will be debated in committees."

The keepers of numbers over in the LBJ Building, north of the Capitol, have confirmed to lawmakers what they warned them about in 2006: The legislation that cut local school property taxes and revised the state's corporate franchise tax didn't balance, to the tune of $10 billion a biennium.

Wherever you want to point your finger, them's the numbers, and they'll keep recurring, chief revenue estimator John Heleman told the Senate Finance Committee, every time the budgeteers gather.

And if you're in the finger-pointing mode, you'll want to refer back to the fiscal notes that were in place when the votes were taken back in 2006. It lacked credibility at the time, since then-Comptroller Carole Keeton Strayhorn was running for governor and everyone was accusing her of juicing the numbers to make Gov. Rick Perry look bad. They passed their bills and Perry won reelection and Strayhorn went home. The numbers are still here. The Legislative Budget Board (which wasn't running for governor) scored the bills in that school finance package and found that they'd run annual deficits of between $5 billion and $6 billion once everything was up and running. As it turns out, they were pretty close to the mark.

If it's a recurring hole — a structural deficit in the Capitol vernacular — it's not the sort of thing you can fix with the Rainy Day Fund. But it's not the only reason for the state's budget troubles, or maybe even the main one. There was a hole in the economy. Sales dropped, and the sales taxes upon which the state depends fell, too. That, on paper, is why they have an economic stabilization fund (that's the Rainy Day Fund's official name) — to offset crummy economic cycles.

The conversation has turned now to using Rainy Day money for the current deficit — the $4.3 billion gap between current spending and current income — and then to argue about whether any of it should be used to balance the two-year budget that starts in September. A reminder: That $4.3 billion number will change; Comptroller Susan Combs didn't include savings from budget cuts ordered and implemented in the last five months.

Questions continued to linger about blackouts that rolled through the state after a bitter cold front blew through Texas. State officials tried to figure out what allowed cold weather to knock 82 power plants offline, yanking power for hundreds of thousands of Texans. Officials also had questions for officials from ERCOT, the state's grid operator, about the spike in the wholesale price of electricity. The Public Utility Commission is overseeing an investigation into whether market manipulation was in play, and the Railroad Commission will weigh in with an assessment of the natural gas industry's actions during the crisis.

Amazon is pulling up stakes in Texas. The online retailer is in a legal fight with the state over whether it should collect and remit sales taxes. The comptroller sued the company for $269 million in uncollected sales taxes. Amazon officials say they had intended to expand, but will instead eliminate its physical presence in the state.

Court-watchers hope the approval of a federal judge in Laredo will help solve a critical backlog of cases. The U.S. Senate confirmed Magistrate Judge Diana Saldaña to fill one of two vacant positions after being nominated by President Barack Obama in July. Saldaña is the first judicial nominee of Obama's to receive approval in Texas, but several remaining judicial vacancies have some worried the state will be unable to handle an increasing number of drug and immigration cases.

After a three-judge panel of the 5th Circuit Court ruled against them, plaintiffs in a racial discrimination suit against the University of Texas appealed to the full court. They contend that a U.S. district judge and the panel misinterpreted the U.S. Supreme Court's opinion in a similar case at the University of Michigan. At issue is whether race can be considered as a factor in admission.

Gov. Rick Perry used his State of the State address Tuesday to criticize the federal government and, in particular, to slam Austin's representative in the U.S. House, Lloyd Doggett, for passing an amendment last year requiring Texas to maintain current levels of education spending as a condition for $830 million in federal funding. At the time, Democrats wanted Perry's commitment that he'd use the money solely on education for the next three years rather than to plug budget holes. Perry refused to sign, citing the Texas Constitution. A movement is now under way in the congressional Republican delegation to overturn the so-called Doggett amendment.

Bitter fighting over eminent domain may finally come to an end this legislative session as lawmakers work toward passing a compromise bill. Property owners and their allies have struggled to gain additional safeguards against eminent domain for years, and since Gov. Rick Perry declared it an emergency item this session, progress has already been made. The Senate passed a bill Wednesday, and the author of the House version, Charlie Geren, R-Fort Worth, predicted passage there.

Prison officials tasked with making budget cuts came up with a draft version full of controversial money-saving ideas. In addition to laying off more than 1,000 workers, they proposed closing drug treatment centers and reducing the number of meals prisoners would get on weekends. The prisoners' diets would also take a hit, with dairy milk being replaced with the powdered variety and bread substituted for buns.

Although the state and Environmental Protection Agency's relationship is still adversarial, a bipartisan group of state legislators is asking for the state to fund additional air monitors in North Texas. Thirty lawmakers sent a letter to Gov. Rick Perry urging him to fast-track their request to have the Texas Commission on Environmental Quality install 20 air monitors near the Barnett Shale gas field to get a clear picture of the air quality in the region, where shale drilling has stirred controversy. Costs are expected to be between $3 million and $7 million for the first two years and $1 million to $3 million per year after that.

Rep. Debbie Riddle apparently took notes during Gov. Rick Perry's State of the State address.

Immediately after the governor's call for lawmakers to draft legislation punishing employers who hire undocumented immigrants, the Tomball Republican filed House Bill 1202, which would make it a state jail felony to "intentionally, knowingly, or recklessly" hire an undocumented worker. Such felonies are punishable fines up to $10,000 and stints in jail of 180 days to two years.

The bill exempts those entering into contracts with or hiring undocumented immigrants to perform work only at single-family homes, which could exclude the thousands of Texans who employ unauthorized workers for domestic help. It also provides an exemption for employers who attempt to verify employment "in a manner that is more likely than not to produce a correct and reliable result." The bill does not mention verification through the federal electronic employment system known as E-Verify, which could make the proposed legislation more favorable to some Republicans. At least five bills have been filed requiring the use of E-Verify, to the displeasure of some GOP House members. The system is inaccurate, they argue, and it could actually hinder some small businesses in their attempts to hire legal workers. The Texas Association of Businesses has also taken a stance against E-Verify, claiming the system will hurt the state's businesses.

The insiders on some of the State of the State proposals.

Gov. Rick Perry delivered his sixth State of the State address this week, asking lawmakers to close some small agencies, to merge some others, to consider basing state funding for colleges and universities on the basis of how many degrees they reward, and challenging those schools to find a way to offer a bachelor's degree, with books included, for $10,000 or less. Our insiders were skeptical about the last two ideas, with 64 percent saying counting degrees is a bad way to measure success and 62 percent doubting that higher education institutions can produce a $10,000 baccalaureate. They're more optimistic when asked whether lawmakers are actually willing to close or combine agencies; 87 percent say, "Yes."

This week's open-ended prompt was: "If lawmakers decide to save money by consolidating or closing agencies, which state agencies should they target?" The full set of answers is attached, but here are some samples of how the insiders answered:

• "Supreme Court and Court of Criminal Appeals. Some of the appellate districts. The various health agencies."

• "They simply won't. The agencies all have big constituencies (and lobbyists who represent those constituencies) and they won't target any."

• "It doesn't matter. There is not enough money to be saved in consolidation to make any difference in the budget crisis."

• "It makes sense to consolidate the Texas Medical Board, the Texas Board of Nursing, the Texas Board of Dental Examiners, the Texas Optometry Board, the Texas Board of Examiners of Psychologists, the Texas Board of Chiropractic Examiners, the Texas Board of Pharmacy, the Executive Council of Physical Therapy and Occupational Therapy Examiners and the Texas Board of Podiatric Medical Examiners into one new agency, the Health Professions Agency."

• "TCEQ and the Railroad Commission"

• "Perhaps the State Board of Education could be closed."

• "PUC/RRC"

• "It would be nice if they actually sunsetted an agency that was up for sunset"

• "Cost savings from such actions are likely to be all show and no dough. Such an effort is really just a distraction from the real issues and hard budget choices that need to be made."

• "All health care licensing should be placed under the medical board. Quacks do not police the activities of fellow Quacks well."

• "None. Rearranging chairs on the deck. This is not the issue."

• "This discussion speaks to the failure of the sunset process which was designed to do this in a logical and orderly fashion. It doesn't work and needs to be reformed."

• "Small agencies that are mostly pass-thrus for federal money (like Housing & Comm Affairs) are good consolidation targets; put remaining staff in Gov's office. Closing regulatory agencies cuts the budget but doesn't really help balance it (the GR-dedicated issue)."

• "Perry's list is a good start."

• "Put the State Preservation Board under the Historical Commission, the Animal Health Commission under the Agriculture Department, the Alcoholic Beverage Commission under the Department of Public Safety, the Railroad Commission under the General Land Office, and the responsibility to collect all debt owed to the state under the Attorney General. Just for good measure, go ahead and replace the Lottery and Racing Commissions with the State Gaming Commission to handle the expansion of gambling in Texas!"

• "The legislature should consolidate TEA and THECB. Create an Education Czar overseeing both P-12 and higher education with a director for P-12 and another one for higher education."

Ever have that feeling that, "Don't worry, it's all good," means, "You're already baked"?

Speaker Joe Straus appointed members to committees, shuffling the assignments in a Texas House where one in four members is a freshman and where Republicans have a two-to-one numerical advantage. As usual, some House members were surprised. Some of them were doubly surprised when they read about their assignments on the Quorum Report an hour or more before they were made public by the Speaker's office (a note to leakers: when you're the only outfit in possession of the leaked information, all inquiries lead back to you; just sayin').

With the panels named, he can start assigning legislation to various committees for consideration, and that will get under way quickly, with the House Appropriations Committee diving into the budget this week.

Straus had several openings to fill, with members either retiring or getting beat and leaving chairmanships open on Calendars, Corrections, Culture, Recreation and Tourism, Defense & Veterans' Affairs, Human Services, Licensing & Administrative Procedures, Public Safety, Redistricting, and the House Select Committee on Federal Economic Stabilization Funding.

Calendars sets the House's agenda — what bills come up. Licensing is the committee where most gaming legislation is handled. Redistricting, within the political micro-climate of the Legislature, is where the politicians go to tell their own futures.

Some members did just fine, and some made the best of what they got. The Democrats knew what was coming when they saw the results on Election Night. After the voting, and the jersey changes for Alan Ritter of Nederland and Aaron Peña of Edinburg, the 77-73 House gave way to the 101-49 House. And what had been a 19-16 split on committee chairmanships is now a 27-11 split. It was one of those "Shut up and take your medicine" moments, and for the most part, they did.

The big busts were Rene Oliveira, D-Brownsville, who left the middle seat on Ways & Means and got the middle seat at Land & Resource Management. Joe Pickett of El Paso is still on Transportation, but without the gavel in his hand; he's now chairing Defense & Veterans' Affairs. That's not a bad gig, given the military presence in El Paso, but it's not Transportation. Rep. Yvonne Davis, D-Dallas, didn't vote for the speaker or against him. She didn't even press the button for the white "abstention" light. She just sat there. And for whatever reason, she's no longer the chair of Urban Affairs.

Beverly Woolley, R-Houston, whose endorsement of Straus before the session started broke the opposition's momentum, is speaker pro tempore. Other notable elevations: Todd Hunter, R-Corpus Christi, will head Calendars, and Harvey Hilderbran, R-Kerrville, will head Ways & Means (which might have a limited role in a session where lawmakers are more allergic than usual to taxes).

What's left of the Polo Road Gang did all right, though they didn't all get what they wanted, or thought they might be getting. The Calendars Committee is packed with them; four of the seven who are still left are on that committee. The three who aren't have good jobs: Straus himself, Jim Pitts of Waxahachie, chairman of Appropriations, and Rob Eissler of The Woodlands, chairman of Public Education. (The PRG was a group of 11 Republicans who met at Byron Cook's condo two years ago to pick a challenger to Speaker Tom Craddick from their ranks. Straus was the surprised and surprising pick. Brian McCall quit to be chancellor of the Texas State System, Delwin Jones of Lubbock and Tommy Merritt of Longview lost their primaries, and Edmund Kuempel died.) Charlie Geren of Fort Worth heads Administration and is on five committees. Jim Keffer of Eastland heads Energy Resources and is on four panels. And Burt Solomons of Carrollton is suddenly everyone's best friend, as chairman of Redistricting. He's on three other committees, too. Dan Branch of Dallas, who signed up as soon as Straus' name rose to the top two years, also landed in clover, with a chairmanship (higher ed) and three more assignments.

Redistricting bears a mention here, as it's packed with committee chairs and Straus loyalists. That's the panel that will draw districts that help and hurt incumbents, a powerful lever in the hands of the Speaker and, on the other end of the building, the lieutenant governor.

And the opposition to Speaker Joe Straus isn't on the BFFs list; depending on your view, they were either punished directly or there simply wasn't anything left for them after the stalwarts were rewarded. Rep. Ken Paxton, R-McKinney, who pressed almost to the end — withdrawing just before the vote on the speaker — finds himself on County Affairs and Urban Affairs. Warren Chisum, who challenged Straus and then folded, as promised, when the GOP Caucus stuck with the speaker, landed on Appropriations and Environmental Regulation.

The members of the No-Joes are mostly freshmen, but there are some veterans, too, and some of their committee assignments were choice — and not in a good way. (It's always hard to know if freshmen got hosed because of bad juju or if it was just because they're freshmen.)

Leo Berman of Tyler, Wayne Christian of Center, Dan Flynn of Van, Phil King of Weatherford, Jodie Laubenberg of Parker, Tan Parker of Flower Mound, Paxton, and Bill Zedler of Arlington. Berman got Elections, but without his beloved Voter ID bill, which went to a special committee he's not on. Christian is on Ways & Means, an ordinarily powerful committee that looks to be emasculated by mass oaths against any new taxes. King, a ringleader in the anti-Straus group, got Urban Affairs. He lives in Weatherford, population 27,437.

The committee assignments are available here by member, and here by committee. Here's a list of chairmen, with asterisks indicating new chairmen (a few because they're heading new committees):

• Agriculture & Livestock*: Rick Hardcastle, R-Vernon

• Appropriations: Jim Pitts, R-Waxahachie

• Border & Intergovernmental Affairs: Veronica Gonzales, D-McAllen

• Business & Industry: Joe Deshotel, D-Beaumont

• Calendars*: Todd Hunter, R-Corpus Christi

• Corrections*: Jerry Madden, R-Richardson

• County Affairs: Garnet Coleman, D-Houston

• Criminal Jurisprudence: Pete Gallego, D-Alpine

• Culture, Recreation & Tourism*: Ryan Guillen, D-Rio Grande City

• Defense & Veterans' Affairs*: Joe Pickett, D-El Paso

• Economic & Small Business Development*: John Davis, R-Houston

• Elections*: Larry Taylor, R-Friendswood

• Energy Resources: Jim Keffer, R-Eastland

• Environmental Regulation*: Wayne Smith, R-Baytown

• General Investigating & Ethics: Chuck Hopson, R-Jacksonville

• Government Efficiency & Reform*: Bill Callegari, R-Katy

• Higher Education: Dan Branch, R-Dallas

• Homeland Security & Public Safety*: Sid Miller, R-Stephenville

• House Administration: Charlie Geren, R-Fort Worth

• Human Services*: Richard Peña Raymond, D-Laredo

• Insurance: John Smithee, R-Amarillo

• Judiciary & Civil Jurisprudence*: Jim Jackson, R-Carrollton

• Land & Resource Management*: Rene Oliveira, D-Brownsville

• Licensing & Administrative Procedures*: Mike Hamilton, R-Mauriceville

• Local & Consent Calendars: Senfronia Thompson, D-Houston

• Natural Resources: Allan Ritter, R-Nederland

• Pensions, Investments & Financial Services: Vicki Truitt, R-Keller

• Public Education: Rob Eissler, R-The Woodlands

• Public Health: Lois Kolkhorst, R-Brenham

• Redistricting*: Burt Solomons, R-Carrollton

• Rules & Resolutions: Ruth Jones McClendon, D-San Antonio

• State Affairs*: Byron Cook, R-Corsicana

• Technology*: Aaron Peña, R-Edinburg

• Transportation*: Larry Phillips, R-Sherman

• Urban Affairs*: Harold Dutton Jr., D-Houston

• Ways & Means*: Harvey Hilderbran, R-Kerrville

• Select Committee on State Sovereignty*: Brandon Creighton, R-Conroe

• Select Committee on Voter Identification and Voter Fraud*: Dennis Bonnen, R-Angleton

• Joint Committee on Oversight and HHS Eligibility System*: Fred Brown, R-College Station

Before lawmakers have started drawing lines, before the Census Bureau has dropped the numbers on which those lines will be based, the first redistricting lawsuit in Texas has been filed. Attorney Michael Hull of Austin, representing three North Texas voters, sued the state and a bunch of others, alleging that counting undocumented immigrants in political districts has an unfair and illegal effect on voters in districts with smaller numbers of non-citizens.

The logic goes this way: If two districts have the same populations and one has more non-citizens than the other, it takes fewer voters in that district to swing an election. Fewer citizens means fewer voters means a smaller number makes a majority. Each vote is, compared to the district with more citizens, worth more.

That's interesting, but it's probably not the main point of the lawsuit. This appears to be (insert an asterisk for uncertainty here) the first lawsuit filed on redistricting and if it is, and if the courts don't burp it back up, it means the redistricting cases in Texas could go through a bunch of judges in and around Sherman. Hull asked for a three-judge panel — that's normal in redistricting. This is also pro forma: The suit pulls in redistricting for Congress, the Legislature, and the State Board of Education. Here's a copy of the lawsuit.