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Struggle over more cuts in next state budget already beginning | Texas Regional News - News for Dall
Struggle over more cuts in next state budget already beginning
By ROBERT T. GARRETT
Austin Bureau
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[email protected]
Published: 23 February 2012 10:30 PM
AUSTIN — The budget that lawmakers will write come January is shaping up as an intense struggle over what the state s role in Texans lives should be.
Leaders already have broken with tradition by reducing what public schools receive in basic state aid and not paying for five months of a two-year Medicaid budge
This week, Gov. Rick Perry and the House s chief budget writer all but dismissed pleas by education advocates for an immediate special session to roll back som
of the education cuts ordered last year.
With any changes to the current budget seemingly ruled out, experts say the key questions for next time boil down to: How low can you go? Will there be cuts o
top of cuts, something not seen in Texas since the 1950s? And can local taxpayers in school districts, cities and counties be expected to keep picking up
burdens the state sloughs off?
Perry, tea party-backed Republicans in the Legislature and conservative activists say putting state finances into an ever-tightening vise helps the state s economy
They note that Texas leads all states in job creation and that people continue to flock to the state, which is picking up an additional four U.S. House seats as a
result.
But Democrats and other critics say the policy of continual cuts courts disaster. They note that Texas began the past decade as one of the most frugal states.
Since then, critics say GOP leaders policy of rejecting higher taxes and even cutting some taxes has allowed problems to fester. One example they use: Public
health systems along the Texas-Mexico border are fraying, weakening defenses against outbreaks of tuberculosis and cholera.
With the cuts in education, they warn, there s a growing prospect that the state s workforce increasingly will consist of stunted, poorly educated young people.
“How we pay for schools is the state budget,” said Eva DeLuna Castro, a former analyst in the comptroller s office who tracks fiscal matters for the progressive
Center for Public Policy Priorities. “If we refuse every two years to tackle that, it s not a good budget. It s an abdication.”
But former House Appropriations Committee Chairman Talmadge Heflin, R-Houston, said keeping state government on restricted rations hasn t set the state back
because it fosters innovation.
“There s still room to economize, to squeeze, to reduce the footprint,” said Heflin, a senior analyst with the free-market advocacy group the Texas Public Policy
Foundation. “People like something about being in Texas or they wouldn t keep coming. We re not starving our education system to where we re going to have an
uneducated workforce.”
Former Lt. Gov. Bill Ratliff, a Republican who has denounced the school cuts, retorted: “Of course, Talmadge is one of those who would like to be able to drown t
government in a bathtub.”
Ratliff said lawmakers since the 2009 session have slashed nearly $12 billion from state support of public schools, after considering enrollment growth and
assuming a rate of 2 percent inflation per year.
“They ve just got their head in the sand,” he said. “Hundreds of school districts statewide are going to their voters trying to get authority to raise property taxes so
they can survive.”
Still, few people expect the Legislature to do much on education next session because of pending school-finance lawsuits. The suits probably will not be finally
resolved until at least late next year, after lawmakers go home.
“Should the state lose that, at a minimum what you re talking about is restoring the $4 billion that was cut in the last budget” from the state s main aid-to-schools
vehicle, the Foundation School Program, said Dale Craymer, president of the business-backed Texas Taxpayers and Research Association.
Craymer, who worked on budgets for both the late Gov. Ann Richards and former Gov. George W. Bush, said the economy s not growing fast enough to pay for
school funding increases that would satisfy state judges — on top of filling holes that lawmakers left in the two-year, $173.5 billion budget they passed last year.
The biggest is a Medicaid IOU of between $4 billion and $5 billion. In Texas, Medicaid primarily pays for acute medical care for poor children and pregnant women
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Struggle over more cuts in next state budget already beginning | Texas Regional News - News for Dall
along with nursing home and in-home care for destitute adults.
Craymer said lawmakers also will need to find $2 billion more for schools just to stay even. The gap was created by a decision last session to fund only 23 of 24
months worth of Foundation School Program payments to districts.
Still, Craymer said, he s optimistic next session s budget drafters can again muddle through. That depends on whether they have to address the school lawsuits
yet and pay a projected $2 billion state tab for President Barack Obama s national health care overhaul. That might not materialize in 2014-15 because of Suprem
Court action or repeal, if Republicans sweep national elections this fall.
“If we continue our recovery, our revenue system is going to take care of a lot of our normal problems,” Craymer said.
DeLuna Castro, though, sees further retrenchment — and a revival of past federal lawsuits over state failures to fund prisons, health care and other social services
The liberal analyst said Texas will need $16 billion more of state tax revenue and investment income in the next budget cycle to plug holes, maintain existing
programs and cover inflation and enrollment growth in schools, state colleges and Medicaid. More than a year ago, she correctly pegged last session s budget
shortfall at $27 billion, a figure confirmed by the Legislative Budget Board in a report last month.
The state s very unlikely to be so flush, she said, and lawmakers demonstrated last year a strong aversion to tapping savings in a rainy day fund — something th
had been routine in earlier sessions.
Comptroller Susan Combs has said lawmakers next year will have the option of spending as much as $7.3 billion in rainy day money, if they can muster
supermajorities in both houses, as the state constitution requires. Some experts say the rainy day fund could swell to as much as $9 billion, thanks to expanded
energy production in the state, which is where the money mostly comes from.
“Not spending $9 billion that you have right there is unprecedented in Texas budgeting — or was before 2011,” DeLuna Castro said. “They re not done cutting.”
Texas finances are showing improvement, but problems already plague the next legislative session s budget. How it breaks down:
NO MORE RED INK
January 2011: Comptroller Susan Combs forecasts a $4.3 billion shortfall for budget cycle ending Aug. 31.
June 2011: Lawmakers complete work on stopgap measures that combine cuts with about $3 billion of rainy-day money.
December 2011: Combs reports a $1.1 billion balance for the last cycle and forecasts the state will have $1.6 billion left over in August 2013.
ECONOMY PICKS UP
Combs January 2011 estimate of sales tax revenue growth this year: Up 3.9 percent
Combs December 2011 estimate of current year sales tax growth: Up 5.3 percent
Actual sales tax receipts, first five months of this fiscal year: Up 11.7 percent
CLOUDS ON THE HORIZON
Medicaid IOU in this cycle: $4 billion to $5 billion of state tax money.
One-month school payment delay: requires $2 billion more for next budget.
School finance lawsuits: At least a $4 billion hit, whenever it comes.
Federal health care overhaul: $2 billion of new state costs, some say.
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