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AUSTIN, Texas (AP) — Lt. Gov. David Dewhurst and a top lawmaker unveiled legislation Wednesday that they say will improve health care for the poor and disabled while fighting fraud, but they ruled out expanding Medicaid under an Obama administration effort to provide health care to 1.5 million uninsured poor people.

Dewhurst and Sen. Jane Nelson, R-Flower Mound, said her Senate Bill 7 would change how health care providers are paid to encourage quality of treatment over quantity or procedures, while redesigning long-term care for the profoundly disabled. Nelson said the state lost $6 billion in Medicaid fraud between 2004 and 2011 and her Senate Bill 8 would detect fraud earlier and more effectively punish those responsible.

"When you defraud the system, you are stealing from the taxpayers, children, the frail, the poor, the elderly and Texans with disabilities. It is crime against our most vulnerable citizens, and we have to change our approach to stopping it," Nelson said.

Medicaid is a joint state and federal program in which Washington provides roughly $2 for every $1 the state spends. In return, the state must follow federal regulations.

Dewhurst said health and human services have grown from being 20 percent of the state budget to 30 percent since 2003, and Medicaid costs have doubled. During that same period, though, Texas lawmakers have cut spending to other programs and federal lawmakers have expanded the number of services required under Medicaid.

As part of the Affordable Care Act designed to make sure all Americans have health insurance, the Obama administration has offered to pay Texas almost all of the costs of expanding Medicaid coverage to an additional 1.5 million to 2 million poor and uninsured people. Health care advocates almost universally support Medicaid expansion and some economists say it will financially benefit the state.

Gov. Rick Perry, though, has rejected the proposal saying it undermines states' rights, and Dewhurst on Wednesday reiterated his opposition.

"We carefully cover under Medicaid those populations that we feel need the help of the state and cannot care for themselves," Dewhurst said. "In 2003 we made a decision to exclude adults — able-bodied — who can go out and work, and that's the target population for Obamacare."

Dewhurst said he would rather see the federal government exempt Texas from most Medicaid regulations and allow the state to spend the money how it sees fit, something known as a block grant.

"Our care would be better if the state of Texas had the flexibility to focus on where needs are because one size does not fit all in health care," he said. "But we have not been successful under either the Bush or Obama administrations to get a block grant."

Online:

Senate Bill 7: http://www.legis.state.tx.us/BillLookup/History.aspx?LegSess=83R&Bill=SB7

Senate Bill 8: http://www.legis.state.tx.us/BillLookup/History.aspx?LegSess=83R&Bill=SB8

AUSTIN, Texas (AP) — Gov. Rick Perry wants to tap the Rainy Day Fund to spend $3.7 billion on critical water and transportation systems in the state.

In his State of the State speech on Tuesday, Perry said there is more money in the fund than is needed, and that the state should not accumulate any more. He said tapping the fund for a one-time investment in infrastructure was needed to ensure a high quality of life.

Perry also called to use road funding only on transportation projects.

The Republican has for weeks called on the Legislature to cut taxes and continue to hold down government spending — even though Texas' economy is booming. He also called for $1.8 billion in tax relief and said how to do that was still open for consideration.

Addressing the Senate Education Committee on Tuesday, representatives from numerous firms and trade organizations told of not being able to fill high-paying jobs that require more technical skills than college smarts.

They applauded a measure by committee chairman Dan Patrick seeking to better emphasize "workforce development." It would allow students more flexibility to choose what high school courses they take.

Students could study a vocational plan featuring electives in business and industry, or one built around science and technology. A third option would stress arts and humanities.

Patrick says Texas schools will still promote college-readiness but that not all students need a university degree to succeed.

Senate Natural Resources Committee Chairman Troy Fraser laid out his plan on Tuesday, but said he expected to spend weeks refining the measure, named Senate Bill 4.

Fraser complained that he asked the existing six-member water board for a prioritized list of water projects more than two years ago and he still doesn't have an answer.

Fraser wants to replace the current part-time board and replace it with three, full-time professionals. His bill also sets aside $2 billion to finance projects across the state.

Senate Bill 4 would allocate money for water projects so that 10 percent goes for rural infrastructure and 10 percent goes for conservation.

Phil Wilson, executive director of the state Department of Transportation told House lawmakers that Texas is nearing the end of a decade of construction and maintenance fueled by bonds and other revenue sources.

Wilson says that without new money, state roads are facing a "perfect storm" of a growing population trying to use aging highways.

Gov. Rick Perry has said he wants to spend more than $3 billion from the state's Rainy Day Fund for water and road projects.

The Legislature also is considering a state constitutional amendment to dedicate billions in annual car purchase sales taxes to highway construction.