The Texas House voted 98-49 Sunday night to slash funding for public schools, nursing homes and college financial aid in a dramatic show by Republicans elected on a limited-government message in the face of a massive budget shortfall.

The $164.5 billion budget for the next two years - which would trim $23 billion from current state and federal spending - would have a disastrous effect on key services, said outnumbered Democrats, who acknowledged their inability to prevail in a chamber where Republicans hold a 101-49 supermajority.

The state is facing a revenue shortfall estimated at $27 billion dollars. That means it's $27 billion dollars short of the money that's needed to continue providing state services at current levels for the next two years.

The House has voted to bridge about $4 billion of that gap with cuts this fiscal year and a $3.1 billion dip into the rainy day fund, which is all Gov. Rick Perry said he is willing to spend.  Republican leaders say the state has to live within its means, and that's what voters demanded last November.

The bill now goes to the Senate, where budget-writers are expected to find ways to soften the impact of the cuts by finding new sources of revenue.  Differences between the chambers would be worked out in negotiations.

via Texas House passes bare-bones budget | Houston & Texas News | Chron.com - Houston Chronicle.

House Bill 1 would cut public school spending by nearly $8 billion dollars, and many school districts would face teacher and other staff layoffs.  It falls more than $4 billion short of covering Medicaid caseload growth. That would force cuts in Medicaid reimbursement rates to nursing homes and other health care providers, raising the prospect of nursing home closures.