Let me see if I’ve got this straight. Instead of raising the gas tax, and paying for roads the way we used to, Sen. Ogden wants to pass a constitutional amendment that will allow voters to vote on whether or on they want to raise the gas tax to pay off the debt for roads we’ve already built. Via Peggy Fikac at the San Antonio Express-News, Proposal gives voters a say on gas-tax increase.
The Bryan Republican (Sen. Ogden) isn’t proposing a straight-ahead state gas-tax increase. Instead, he plans to offer an amendment to the Texas Constitution to say lawmakers can raise the gas tax a few cents a gallon to pay off debt service for road bonds financed through the highway fund.
The proposed amendment, which Ogden plans to push in the coming regular legislative session, would require a two-thirds vote from lawmakers plus voter approval statewide.
“Going with a constitutional amendment does a couple of things. It provides some political cover for people who don’t want to be responsible for raising taxes, and it gives the voters a legitimate option: If you want us to continue to borrow money to improve the highways, this is how we propose to pay for it,” Ogden said. “And whatever their answer is, I’d accept.”
Ogden’s idea is another sign of the seriousness of the money problems facing transportation, with the gas-tax-fueled highway fund projected to run out of money for new projects in 2012.
The increase would apply only to Proposition 14 bonds, which are paid off by the highway fund. The Texas Department of Transportation has authority to issue $6 billion in such bonds; it has issued $4.6 billion.
According to TxDOT, the state is expected to pay $272.5 million from the $6.45 billion highway fund for debt service in the 2011 fiscal year and nearly $290 million in 2012. Between 2013 and 2032, debt service for the bonds will cost more than $400 million a year.
The 20-cent-a-gallon state motor-fuels tax hasn’t been raised since 1991; efforts to increase it have been seen as politically risky. Each penny yields about $155 million, with one-fourth going to education. Ogden would propose having the extra pennies fund only debt.
Ogden’s idea is not a sign of seriousness, Ogden’s idea is a sign of cowardice. Not only that but he wants to lay the blame off on voters instead of taking it on himself. Oh how we long for the day when we had real leaders in Texas. Leadership means sometimes you have to stand up and do what’s right and unpopular, consequences be damned. Trying to hide the GOP’s neglect of Texas highways since taking control of our state’s government, and attempting to lay the responsibility of paying for their neglect on the taxpayers, is anything but. Hopefully voters would reject such shenanigans. Sen. Ogden if raising taxes is what you want to do then offer a “straight up” tax increase.
If Ogden’s fairy tale amendment was to pass in the next legislative session, there wouldn’t even be a vote on this until November 2011. So the money wouldn’t be available until 2012 at the earliest. No word in the article about what would happen if it didn’t pass.
Smith: But the difference would have been that you would have had to go find the money that you got from the federal government that you got presumably in the form of cuts.
Dewhurst: No, we wouldn’t have had the spending level that we did. We would have had to trim the budget. We still would have been able to put some money into public education, some money into higher education, but we wouldn’t have been able to put as much money into public education and higher education and into Medicaid as we were able to do with the stimulus dollars. That’s a true statement. At the same time, we were able to create a better budget by having some access to the federal funds
In essence what Both Dewhurst and Dunnam are saying is that Texas’ budget would have been balanced, with or without the stimulus, it’s the law. But life in Texas would be much different then it is now. And that’s the reality that the elected Texas Republicans will not admit to. Without the help of the federal Texas, and their political futures would be in much worse shape.
As the recent CBO report shows the stimulus has worked, and worked well, CBO says stimulus a bigger success than expected. This is important because as Perry, Dewhurst and the rest of the GOP in Texas crow about their budget slashing prowess, they didn’t do any in 2009, because of the federal stimulus.
Without the $16 billion dollars Texas used in 2009 to balance the state’s budget, without slashing it to the bone and without raising taxes, Texas would be in extreme circumstances and unemployment would be considerably higher then it is right now. Heading into another budget cycle that would be even more dire.
The point of all of this is, for the GOP members in Texas to be running around saying how much they hate the federal government and all it’s spending, is extremely dishonest. Without the stimulus money in Texas these politicians would be in a much more dire political situation, and they have the federal government to thank for the fact that they are not.
The numerous problems with the Texas Enterprise Fund (TEF) have been apparent, for anyone willing to see them, for quite a while, (see State Development Fund Rewards Hype: Incentives Great, Penalties Few For Companies That Overstate Their Benefits). The TEF allows the Governor, with tacit approval of Lt. Gov. and Speaker, to hand out corporate welfare to supposedly “attract new business to the state..”. From what Gov. Perry and his GOP cohorts always say, Texas already being such a great place for businesses, that they wouldn’t have to bribe them to come here.
* The Governor’s Office has awarded $363 million to 45 TEF recipients to create or maintain 47,735 jobs. These projects claimed 31,319 jobs in compliance reports covering 2008.
* Just 13 of the 45 job-related projects reviewed were performing well.
*As of October 2009 the Governor has penalized 11 TEF grantees for defaulting on their job creation commitments. These penalties, totaling $647,100, amount to just 1 percent of the $64 million in TEF funding that they received.
* The Governor has imposed the “death penalty” on just two TEF projects despite the fact that many other TEF recipients have qualified for termination.
* In February 2009, Perry declared that the TEF program had created 54,000 jobs since 2003. More than one-third of these jobs are pledges that have yet to materialize.
There’s much more. The Texas Observer had this story earlier in the year, Slush Fun, which shows that several companies that received money from the TEF, gave money to Perry in the form of campaign contributions.
Many companies that have received money from the fund have, in turn, aided the governor. An Observer investigation has found that 20 of the 55 Enterprise Fund companies have either given money directly to Perry’s campaign (through their political action committees or executives) or donated to the Republican Governors Association, a Washington, D.C.-based group that Perry presided over in 2008.
The 20 companies have received a combined $174.2 million from the Enterprise Fund. During the same time period, those 20 corporations have donated $2.2 million to Perry and the governors association. Several companies made donations around the time they received grants from the Enterprise Fund. It’s even possible that taxpayer money from the fund came full circle into Perry’s own campaign.
Texans for Public Justice today urged Texas’ top three officials who oversee the Texas Enterprise Fund (TEF) to investigate if Sematech, Inc. violated the 2004 contract it signed to obtain $40 million in state funds. Governor Rick Perry’s highly-touted Enterprise Fund awarded the high-tech consortium $40 million in 2004 to establish the Advanced Material Research Center (AMRC) in Austin. Sematech’s subsequent dealings with the State of New York strain the terms of its TEF contract—arguably to the breaking point. In a letter today to Governor Perry, Lieutenant Governor David Dewhurst and Speaker Joe Straus, TPJ called for a probe into Sematech’s contract compliance, urging the officials to either “enforce compliance or recover the scarce funds that failed to deliver the promised benefits.”
[...]
“The Enterprise Fund is crying out for greater accountability, transparency and oversight. The Sematech fiasco highlights Governor Perry’s conflicts in both awarding and enforcing Enterprise Fund grants,” said Craig McDonald, director of Texans for Public Justice. “The governor is quick to tout the promised jobs but slow to make corporate welfare recipients live up to the terms of their handouts.”
[...]
“If Sematech is two-timing Texas, Perry needs to get our $40 million back,” added McDonald.
This is one area where Texans can see the unchecked powers that Perry has accumulated from being in office for too many years. Perry believes, because he’s been in power for so long, that like a King he can do as he pleases. He also thinks that because he’s been returned to office, over and over again, that whatever he does it right and Texans will go along. If Perry is returned to office again we can only imagine how much more of our money, for four more years, will go to corporations in this manner.
In May 2009, the 10 occupations with the highest employment levels represented more than 20 percent of total employment, and the number of workers in these occupations ranged from 1.9 million workers to 4.2 million workers.
Most of these occupations were relatively low paying: 9 of the 10 largest occupations had median wages between $8.28 per hour and $14.56 per hour. Median wages for all occupations in the United States were $15.95 per hour in May 2009. The one exception among the 10 largest occupations was registered nurses, whose median wages were $30.65 per hour. Employment among registered nurses was 2.6 million in May 2009.
This comes from a recent report from the Bureau of Labor Statistics, Occupational Employment And Wages –May 2009 [PDF], released last Friday. Unfortunately it looks like these types of low paying jobs will continue to be most prevalent in the future.
As the economy recovers and Americans get back to work, the wage gap between white- and blue-collar work is expected to grow. According to new data from the Bureau of Labor Statistics, 60 million people—46 percent of the American workforce—in 2009 worked in the service sector as cashiers, office clerks, cooks, nurses, retail salespeople, or customer-service representatives.
Here’s a common story for those who had to change jobs in the last decade. From a Newsweek article back in December 2009, The New Working Reality.
By the time Kelley Krostoski was laid off from her job as a management consultant this past February, she assumed that she’d be able to find another position closer to her Oregon home, perhaps even something that would not require her to travel.
Ten months later, her initial optimism has given way to resignation. She landed another gig in September as a consultant that required her to take an 11 percent wage cut. She still travels up to three months a year, though that’s better than the six months a year spent on the road at her previous job. Overall, Krostoski says she’s relieved. “There aren’t many jobs in Oregon,” she says, noting the state’s 11.3 percent unemployment rate. “I [know] folks who have been looking for a job for a year or more.”
In the current economy, many Americans have had to lower their expectations for their career and work lives. Like Krostoski, they’ve taken pay cuts to secure new jobs. They’ve postponed retirement to help struggling family members, and millions of Americans remain underemployed, working part-time or low-wage jobs to pay the bills. “There’s a reluctance to settle,” says Andrew Gledhill, an economist with Moody’s Economy.com. “In these once-in-a-generation types of recessions, you don’t have a choice.”
The story of someone losing a job, and having to replace it with one with a lower salary, has become all too familiar since the turn of the century. While there are many reasons for this one is certainly the fact that workers don’t have the education they need. Today the Texas Association of Business (TAB), whose main goal is to keep taxes low on businesses and corporations in Texas, released a new report.
The Texas Association of Business (TAB) today released a report entitled Dream Big Texas: Educating a Globally Competitive Workforce, detailing the improvements needed to maintain our state’s status as an international economic powerhouse.
“The Texas economy has been the beneficiary of extraordinary natural resources, fiscally conservative leadership and hardworking men and women who form the core of our workforce,” said TAB President Bill Hammond. “Yet for all our progress in building the best business climate in America, the threat Texas faces if we do not produce well-educated graduates who can fill increasingly sophisticated jobs, puts all that at risk.
While TAB is correct about the need for a well-educated workforce, they don’t mention the inherent dichotomy in what they state. The reason Texas has the “best business climate in America” – if that’s possible without a well-educated workforce – is because that climate is created by sustenance taxation of the wealthy, big business, and corporations which have starved education in this state. Ironic isn’t it? TAB also doesn’t offer much in the way of a solution other than using some sort of a performance based funding mechanism for funding post-secondary education.
With the decline of well-paying union manufacturing jobs in this country, it looks like these kinds of low-paying service jobs are what’s likely to take their place and become the norm. Unless we begin to take education seriously and are willing to pay for it. A well-educated population is the best investment for future economic development there is, and we must be willing to give it the necessary funding. The money will be paid back and then some by future economic growth.
It’s obvious that the “big 3″ – Gov. Rick Perry, Lt. Gov. David Dewhurst, and House Speaker Joe Straus – are worried about cutting too much, too soon before the election. They don’t want to foretell exactly how bad their budget cuts will be if they are reelected. Via the AAS, State leaders spare some from budget cuts.
Laying off prison guards and slicing college financial aid proved to be politically unpalatable to state leaders as they directed agencies on Tuesday to trim $1.2 billion from their current budgets.
But it might not be so easy for legislators to pass over such items next year as they face a shortfall in the 2012-13 budget that could be as big as $18 billion.
Republican leaders have vowed to close that gap without raising taxes, so it is likely that billions more would need to be sliced from the state budget to cover a portion of that gap.
“The leadership has been promising the State of Texas something for nothing for a long time,” said state Sen. Kirk Watson, D-Austin. “It may not work this next year.”
The upcoming shortfall stems from the economic recession as well as past legislative decisions that were not fully paid for at the time, such as the school property tax cut in 2006.
The budget-trimming effort initiated by Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus in January is widely seen as a harbinger of cuts to come.
[...]
n February, agencies proposed a total of $1.7 billion of potential cuts in response to the mandate. The legislative leaders combed through the proposals over the past four months to determine what should be spared the knife.
The $483 million in exemptions announced Tuesday include money for border security, job creation programs, state mental health hospitals and other items.
“These savings will protect taxpayers’ hard-earned money while maintaining essential services vital to the people of Texas,” Dewhurst said in a news release.
But the cuts represent only about 1.4 percent of the state’s $87 billion general revenue budget, which is funded with tax dollars and over which the Legislature has control.
Democrats are doubtful that legislators will be able to cut their way out of the budget hole without hurting Texans.
“Texas is a conservative state,” said state Sen. Leticia Van de Putte, D-San Antonio . “If we really thought that all these programs were fluff to begin with, they would have been cut before.”
Van de Putte said it is unrealistic to expect the state to overcome this budget crisis without a combination of more cuts and more revenue.
About half of the total $1.2 billion in mandated reductions will be in education, despite the exemptions for school districts and financial aid. In total, $655 million was cleaved from the budgets of Texas colleges and universities and Texas Education Agency programs. Those reductions include layoffs, hiring freezes and program trims.
[...]
“What are the value judgments that are being made to determine what gets cut and what doesn’t?” Watson asked. “Do they think they have left a lot of waste after this set of cuts they’ve just made?”
Essentially what the “big 3″ are trying to do is show they’re doing something ahead of time while not causing themselves too much political pain in the process. Or as Dewhurst likes to put it:
The overall goal, he said, is to achieve reductions while avoiding “cutting into the muscle” of state government. “We’re determined to protect all essential services,” he said.
But when layoffs start coming like gangbusters, and Straus has already said that he wants to look at unpaid furloughs for state workers, that’s cutting into not just muscle but bone.
As Bob Moser points out at the Texas Observer, Will Next Budget Be Worse Than 2003?, these guys did some really bad things in 2003 that was the big driver of their party’s loss of support since then.
Those of us who lived through the 2003 session remember the damage inflicted on the state by the deep budget cuts that year. Refusing to raise taxes—though they did hike a number of “fees,” but that’s a separate issue—Gov. Rick Perry and the Legislature closed the gap mainly through accounting tricks and spending cuts. Lawmakers sliced more than $1 billion out of education and $6 billion from health and human services, according to state budget analysts (hat tip to the Statesman). Other key state functions were privatized—in some cases, with disastrous results.
The 2003 budget didn’t do the state well. One of the most famous consequences was that hundreds of thousands of kids lost state-sponsored health insurance. But the budget cuts affected nearly every corner of Texas life.
Perry said during the primary debate that, if reelected, he plans to do the same thing he did in 2003. The cuts then were disastrous for Texas and took a toll on many GOP members of the Texas House. Most of the likely cuts will hurt those most in need and without lobbyists, like working Texans. Whether it’s in public and higher education, health care, government oversight and regulation, and of course failed privatization schemes, all things that were tried and failed then.
It’s taken seven years for the Children’s Health Insurance Program enrollment to return to its 2002 levels (and all the while, the state’s uninsured population has grown).
Meanwhile, the system that enrolls people in food stamps and other government programs is still a mess, reeling from a disastrous plan that laid off thousands of state workers in favor of privately run call centers. The plan was hastily abandoned, but the damage had been done. Before 2003, the Texas food stamp program was a model of efficiency. It regularly won awards from the federal government for its low error rate. Now, the food stamp program is an embarrassment, as Corrie MacLaggan’s excellent reporting in the Statesman has shown.
House Speaker Joe Straus said this week he favored closing the budget gap without raising taxes. Surely, lawmakers will have to seek out new revenue sources—legalized gambling seems to be popular once again. But, if Straus is to be believed, the emphasis once again will be on reduced spending. And they can’t cut Medicaid and CHIP, like they did in 2003, because the newly passed national health care bill likely won’t allow it. That means deeper cuts in other programs.
[...]
This is just the beginning. I honestly don’t know where lawmakers will find the cuts, and how bad the consequences will be. Texas already spends less per citizen than any other state in the nation.
I do know that cutting that much from the state budget—$10 billion, $15 billion, $18 billion, whatever the final figure—will negatively affect nearly everyone in this state for years to come.
The point is there’s nothing left to cut without causing a serious negative effects to Texans and Texas for years to come. It’s called economic scarring. Economic scarring is what I saw in my grandparents, and to a lesser degree my parents, who lived through the Great Depression. It effected them for the rest of their lives.
Dewhurst’s quote above stated that, “..they are determined to protect all essential services”. That’s a very careful political statement, and of course open to interpretation of what exactly an essential service is. (For Dewhurst steroid testing in public schools is essential). Texas is a low tax state, and it’s exactly at times like this, to keep from setting our state back for years, we must raise taxes. It’s time for all of us to pay a little more, but especially those who have not been paying their fare share in Texas – the wealthy, big businesses, and corporations – to keep Texas from sinking into an even worse economic situation.
As the internet is all aflutter about the latest poll on the TX-Gov’s race, it’s has pushed the real problems our state is facing aside. But as we can see from this article, Business tax not expected to hit goal, the budget problems Texas will be facing next year were virtually guaranteed when the GOP business tax was created in 2006.
It was a tax born in a barbecue joint, the story has it, and now it’s giving state budget writers heartburn.
The Texas business tax comes due again today, and no one’s suggesting it will yield anywhere near the approximately $6 billion it was initially forecast to produce annually.
It yielded $4.5 billion when first collected in 2008, based on the previous year’s business activity. Last year, collections dipped to $4.3 billion. State Comptroller Susan Combs predicts the same amount will be collected this year.
“I think it was set up to fail,” said Sen. Kirk Watson, D-Austin, noting the levy was passed to help cover the cost of a cut in property tax rates for school districts. “I think when it was passed, they knew that it would not provide the appropriate swap that they were looking for, that it would not cover the reduction” in property taxes.
Senate Finance Committee Chairman Steve Ogden, R-Bryan, said the school finance package was a net tax cut — back when the state had a surplus.
“To date, it’s been very successful in reducing the school property taxes and increasing the state share of funding public education,” Ogden said. “Going forward, it could be a problem because the state’s economy is in recession.”
The shortfall in expected collections has made things worse for lawmakers confronting a budget shortfall as big as $18 billion through the next two-year budget period.
The business tax was part of a package championed by Republican Gov. Rick Perry and approved by legislators to meet a court order to revamp school funding in 2006.
Experts cite several reasons why the tax failed to live up to expectations.
It’s a one-of-a-kind tax, unique to Texas, and therefore hard to forecast. It’s complicated, and businesses have ended up taking bigger exemptions in one area in particular, cost of goods sold, than originally projected. And the lagging economy has played a role.
The article goes on to talk about how the business tax is a “unique tax”, uniquely bad it should be said. And Sen. Watson is dean on, this tax was setup to fail. Now the GOP, with the help of John Sharp, have put in place a disastrous economic policy, that will allow the Texas GOP if left in power to bring draconian budget cuts that will harm poor and working Texans the most. It’s all just part of the plan.
As far as the poll goes, EOW doesn’t get too up, of too down on any polls just yet. The one thing I see that’s a constant in the last two polls that White should be working on is that Perry has a 55% approval rating. White should be hammering Perry on his negatives like his posh living quarters in Westalke, Gov. Perry’s temporary digs costs Texas big bucks, and doing everything he can to drive up Perry’s negatives, and there are many.
“Ignorance is not knowing. Stupidity is knowing and doing it anyway.” In other words, ignorance has to do with a simple lack of knowledge or education, but stupidity results when a person already possesses the necessary knowledge, yet continues to engage in behaviors that are patently illogical.
Over the next few months heading to the November election, and 2011 legislative session in Texas, there will be much discussion about the budget shortfall that our state will be facing. The publicized estimate grew yesterday from what was an $11 billion shortfall to an $18 billion shortfall. In order to have a serious discussion about this it’s key for us not to be ignorant of how we got here. It’s not an accident, or a perfect storm, this is all part of a plan.
By and large most people are for what government does for them, and only think it’s “too big” when it does things that don’t directly benefit them. And often times politicians are not good at explaining to the people how and educated population, health care, clean water and air, roads, etc…benefit everyone as a whole and that we should all pay something for them. It’s much easier for a politician to make silly jokes about it, (“I’m from the government and I’m here to help”), or blame all the problems on the government. It’s much harder to educate the electorate and bring about workable solutions.
But key to finding a solution is knowing how we got where we are, knowing the history. Back to the plan referenced above. Anyone who is a regular reader likely already knows what the plan is. Republicans since Reagan devised a scheme of how they wanted to “shrink government”. It’s was supply-side economics, nicknamed “Voodoo/Trickle-Down Economics”.
GOP Texas House Speaker Joe Straus, in an effort to shore up his right flank, made a few wild statements before the beginning of a House Appropriations Committee hearing today. The long and short is that he says the infamous “no new taxes” line. But it’s not clear, from what’s been reported so far, if Straus believes “new revenue streams” like taking away sales tax exemptions, or raising fees, are considered a “new tax” or not.
–A blanket moratorium on all new programs and services that require state funding
–A halt to issuing bonds because of the cost of debt
–Efforts to contain personnel costs and payroll growth, including consideration of the effect of freezing higher- level salaries and limiting new hires to those who are essential for Texan’s welfare and safety.
–Personnel containment costs used in other states, including unpaid furloughs to save salary costs and four-day work weeks to save operating costs.
Straus emphasized he’s not advocating any of those choices but said every cost-saving idea must be on the table.
Straus is going California with those “unpaid furloughs”. Of course the big questions are left unanswered like how to we make up for the neglect of the last fifteen years of public education and transportation infrastructure neglect.
Straus said the federal health care overhaul will only exacerbate the state’s budgetary woes.
“Over the next few years, Texans will face higher federal income taxes and other increases in federal levies, including for Social Security and Medicare as result of the federal health care reforms,” Straus said. “Our work on the budget will begin in an environment of uncertainty as the federal government grapples with spending and tax measures to reduce the federal debt. This makes it even more imperative that the state of Texas cover its budget shortfall without a tax increase.”
Once again, the main problem facing Texas is the the most valuable assets of our state in the past, and educated population and a top notch transportation infrastructure, are at a breaking point and the current leaders in our state, like Straus, would rather use scare tactics than try and work for an equitable solution.
The Williamson County Commissioners Court (WCCC) voted unanimously recently to make some changes to the qualifications guidelines for indigent health care in the county, Indigent health care program hit by spending cuts. Here are two of the changes they are going to make.
State law requires all counties to provide a program for patients whose incomes are no more than 21 percent of the poverty level and don’t qualify for Medicaid. The program must allow patients to spend $30,000 a year on specified medical costs.
WilCo Care has provided services to people whose incomes are at 25 percent of the poverty level, and has allowed them to spend $35,000 a year. Effective immediately, those have been changed to match the state’s requirements.
Lowering the income level (from 25% of poverty to 21%), and the annual allowance (from $35,000 to $30,000). The other change that’s made news is the fact that they will now require a valid Social Security number before someone can receive care. The article goes on to state the two changes (eligibility and allowance) will save about 5 percent.
Businesses in Texas are facing higher taxes and the state will have to borrow money all because of a political ploy. Last year Texas Gov. Rick Perry and most in his party decided to leave half a billion ($500 million) on the table and state Sen. Ken Eltife (R-Tyler) points it out and calls Perry’s actions turning it down insane.
Lisa Falkenberg has more, Perry’s stimulus snub leads to higher taxes.
Sure, I’ve made this point before, but don’t take it from me this time.
“It was insane for the state of Texas not to take that half a billion dollars in free money from the federal government to put in that unemployment fund. There are a lot of people talk about strings attached. Every federal stimulus dollar we’ve heard about today had a string attached. Every one of them had a requirement. We took 10 to12 billion dollars all with strings attached and we didn’t say a word about it. But that last half a billion that we failed to take has increased the tax burden on small businesses in the state of Texas. There are (SIC) no way around it. There are organizations out there that want to spin it differently every time the subject comes up and they are flat wrong. We should have taken that money.”
So, there you have it. Perry passed up half a billion so that he could score a few political points by appearing to thumb his nose at the Big Bad Feds and President Obama.
And now business owners, and unemployed Texans, are paying the price.
Gov. Perry used this as part of his plan to bolster his right flank heading into a tough primary with Sen. Kay Bailey Hutchison. His playing politics with this money will now cost business all across the state.
