Stace at DosCentavos reports on a press conference put on by a coalition of 16 pro-migrant organization who slammed the Texas Legislature’s HB12–the bill to ban nonexistent sanctuary-cities. It’s worse that Arizona, believe it or not.
Cuts are planned because of the recession and past budget decisions that have left the state facing a shortfall of as much as $27 billion through the next two years. In addition to agreeing on a funding level for the overall budget – and finding the revenue to pay for it – lawmakers must agree on a school finance plan that would allow them to spend billions of dollars less through the next two years.
Otherwise, current school funding formulas would entitle school districts to existing spending levels, Pitts said. At those levels, under the House budget proposal, Pitts said the money would run out by February 2013 or, perhaps, months earlier.
“That means the schools cannot operate. The teachers will not be paid,” Pitts said.
The House proposal would give schools $8 billion less through the next two years than they would get under current funding formulas. The Senate proposal’s cutback would be half that.
A Legislative Budget Board staffer said in a memo that if education were underfunded and formulas were not changed, the LBB would propose spending money from the rainy-day fund for fiscal year 2013 to meet the gap. If the Legislature did not do so, the education commissioner would pro-rate state aid.
The House bill only would fund Medicaid through March 2013, Pitts said, falling $5 billion to $6 billion short in general revenue of covering caseload growth for the two-year fiscal period and slashing rates to health care providers, including nursing homes. Those facilities have said such drastic cuts would result in closures.
“So, when you come back next session, there will be no more funds as of March to fund Medicaid. And that is not just funding for medical services to people. … It will stop funding to your local nursing homes, to your local doctors and other medical providers of Medicaid services,” Pitts said.[Emphasis added]
The tax swap that created the structural deficit is the key to our current budget shortfall. The House wants to defund public education by around $8 billion. Again, from what Lt. Gov. David Dewhurst said – “Dewhurst said the tax is underperforming expectations by about $4 billion per biennium, that gap is at the heart of the current budget shortfall” – we can deduce that Texas is at least $12 billion short since 2006. (We will have been through 3 bienniums, once the 2012-2013 budget is done, since the schemes enactment). More than enough to cover the $8 billion.
The other thing we must remember is that the GOP in Texas purposefully did this – defunded public education. Everyone knew this tax was bad in 2006, especially Lt. Gov. David Dewhurst.
In a visit with the Chronicle editorial board this week, Texas Lt. Gov. David Dewhurst devoted much of his presentation to touting the improvements to public education to be funded by the new state school finance plan, which includes an expanded business tax and reductions in school property taxes.
Dewhurst acknowledged the predictions of Comptroller Carole Keeton Strayhorn and the Legislative Budget Board that the revamped business tax and one-dollar hike in the levy on cigarettes may leave the state confronting shortfalls of nearly $25 billion over five years. According to the lieutenant governor, the plan will consume the current state surplus of $8 billion.
The worst part of this, obviously, is what will happen to public education and Medicare if this “18 month” budget is passed. Students, ISD’s, teachers, parents, sick people, the elderly will all be put in limbo until the next legislative session. And we learn a new term “proration”, School finance bills are stalled in Texas Legislature.
If attempts to add school finance legislation as amendments fail, schools could receive their funding based on a proration provision, which means schools would maintain their current level of funding next year and into the following year until the state runs out of appropriated money, which some legislators estimate to be February 2013.
Schools would then have to make up the deficit locally — by using taxes, fund balances or other means — and would be repaid by the state when the Legislature meets again in two years.
“Districts need to know with some kind of certainty what their funding levels will be,” said Dax Gonzalez, spokesman for the Texas Association of School Boards. “You can’t staff and run a school with a promise like that.”
Ray Freeman, deputy director of the Equity Center, which advocates for poorer districts, said that the situation is not ideal but that the proration option could be better than the proposed school finance legislation, which he said would not fairly apply cuts to districts.
He said proration would at least maintain funding levels for districts temporarily while giving the Legislature time to meet in a special session to address funding issues properly.
“There are several issues that make people nervous about this and rightfully so,” Freeman said. “But if it could be done in such a way where those concerns are addressed before the second year, that could help.”[Emphasis added]
(Here’s a link to some Proration Issues.) There are several problems with this latest scheme the Texas GOP is floating. First of all who would believe any of the current elected Republicans would actually come back and approve continuing to fund education – at current levels – 18 months from now? They won’t even spend the Economic Stabilization Fund, aka the Rainy Day Fund.
It’s hard to believe that after all the GOP has done this session to defund public education that they would continue to fund education at current levels. It would certainly give the opposition, meaning Democrats, an easy issue to hammer the GOP with in 2012. How serious the GOP is about an 18 month budget and proration we’ll find out in short order.
What we do know is that the GOP can’t figure our a way, amongst themselves, do fund their austerity budget. And they keep ignoring the easy money. The truth is, it is because of the failed leadership of this state over the last decade that we are in this mess in the first place.
Like many conservative lawmakers, Rep. John Carter (R-TX) has often used the phrase “governmenttakeover” to deride President Obama’s health care law. But last night on the House floor, Carter came dangerously close to endorsing an actual government takeover of American energy production. Arguing in favor of increased oil drilling to address high gas prices, Carter cited Norway as an example of a country that the U.S. should emulate:
CARTER: The thing is we don’t know — we all speculate to some extent — but I think it’s [a] pretty easy commonsense position to take that the more supply we have with the demand — we are the demand capital of the world on burning gasoline and diesel. We outshine anyone else on the face of this globe in the use of those products. And we have relatively cheap prices as compared to other countries — especially countries that have no production. They can get very expensive very quickly. Until very recently, there was no oil or gas at all to amount to anything in what we now call Western Europe. Today there is. They have found it offshore, they have found it on the land in Holland and Norway and other places. Norway’s one of the — something like the third biggest producer of offshore oil in the world now. They’re doing extremely well and running their economy in a very frugal manner. Very smart people. And they should be commended. We should do so good.
Here’ another item for Carter to tout, The [auto] bailout’s secret success. Do I think Carter is advocating for Socialism? No, but this has little to with economic systems. Carter’s concern lies with what is best for ExxonMobil.
Anyone who pays attention knows that Carter says idiotic stuff on a regulatory basis. His ability to do that and get away with it has largely to do with him being in a solid GOP majority district. This recent report on a town hall meeting in the Hill Country News, where he talks about the economy, is so full of misinformation that Carter almost makes fromer US Senator Alan Simpson look sane.
In the report it states that, “U.S. Rep. John Carter told a packed house at the Leander chamber luncheon that we are all to blame for the country’s massive debt but that together we can address the issue..”. Carter then goes on to say that, “Santa is dying, and he’ll be dead before the end of the year,” and he tells us that the only was we can “together” fix this problem is by killing Medicare, Medicaid, and Social Security and not raising taxes – especially the rich and corporations like ExxonMobil.
We are again reminded of how fatally flawed the GOP party line on the economy is after Bloomberg shredded House Speaker John Boehner’s speech on Monday, Boehner’s Views on Economy Contradicted by Indicators, Studies. There are two things that are always left out of the GOP discussion when it comes to the issue of deficits and the economy. Here’s a concise explanation of the fist from Bloomberg:
1993 Tax Increase
The speaker didn’t mention a 1993 tax increase that raised the top individual marginal rate to 39.6 percent, where it stood until 2001. In 1998, the government recorded its first budget surplus in almost 30 years.
The U.S. economy grew at an annual rate of 4.1 percent in 1994, the year after Congress passed the second tax increase of the decade. The growth rate dropped to 2.5 percent in 1995, and thereafter rose to 3.7 percent in 1996. The economy grew more than 4 percent a year from 1997 through 2000.
The 1990s were a period of “stalemate between the Republican Congress” and President Bill Clinton, a Democrat, that paved the way for balanced budgets because there was “no major giveaway legislation,” said Eugene Steuerle, a former Treasury Department official who is Institute Chair at the Urban Institute, a nonpartisan research center in Washington.
Insofar as policy has gotten us into this fiscal mess, the Bush tax cuts deserve the bulk of the blame. In their absence, deficits would be much smaller today. If they’re allowed to expire in 2012, deficits will be much smaller going forward. So if you’re saying that tax increases are off the table in any and all budget deals, then you’re proposing to leave in place the very policies that have led to our current deficits and threaten to explode our future deficits. You can call people who’ve adopted that approach a lot of things. Tax cutters. Republicans. But you can’t call them deficit hawks.
That’s right, the main reason for our current debt is because of massive tax cuts to the rich and corporations. The other main driver, unfunded wars in the Middle East. Neither of which any member of the GOP like Carter and Boehner will ever mention.
Is Carter really an idiot? No, but he’s been taken hostage to an ideology that is greedy, corrupt, selfish, mean, cold, cruel, and irresponsible. He will say whatever is put in front of him, whether it is true or not. We should all be skeptical of everything he says, no matter where we lie on the political spectrum.
Of course they do. But that’s the question posed in this article, Democrats struggle to make a dent. While Democrats do matter, they have very little political power in this legislative session, especially when the GOP goes against tradition.
Around midnight on Monday, after a debate marked by tears and angry exchanges, a weary state Rep. Harold Dutton, D-Houston, asked Texas House Speaker Joe Straus what amounted to a philosophical question on behalf of all Democratic lawmakers.
His Republican colleagues, flexing the political muscle they enjoy by virtue of a 101-49 advantage over Democrats, had just cut off Democratic attempts to amend a politically-charged sanctuary cities bill.
“Is this the sine die for the rest of us?” Dutton asked Straus, using the Latin phrase for the last day of the legislative session.
Translation: “Do Democrats even matter?”
It is an existential question that has dogged Democrats since Texas voters handed Republicans a super-majority on Nov. 2, giving them the ability to ramrod a conservative agenda through the Texas Legislature.
Since then, Democrats have been searching for a strategy to make a difference in a legislative session in which they are outnumbered 2 to 1, Gov. Rick Perry has fast-tracked emotionally-charged legislation, and a shortfall of as much as $27 billion has assured severe budget cuts.
And a little later in the article we see why the Demcorats do matter.
Dr. James Henson, director of the Texas Politics Project at the University of Texas at Austin, argued that Democrats had little choice but to use the only tools available to them — the House rules — to kill legislation that is anathema to their constituents.
“They are obligated to represent their constituents,” he said. “You have to show up, and you have to play and you have to play like it matters.”
Whether Democrats accomplish anything likely will not be felt this legislative session, but future elections.
“There is not much they can do but hope they are right about some of these things,” Henson said. “They have to make sure votes get taken and make people own the consequences.”[Emphasis added]
That is why the Democrats still matter and what their job is right now. Show the GOP”s policies as not just radical, but cold, cruel, and irresponsible. And make them own the disastrous results of those policies.
But that message [people like Medicare and Medicaid] hasn’t made its way to Texas, where state lawmakers are moving full speed ahead on their own efforts to take control of — and then restructure — both Medicare and Medicaid, the joint state-federal health care program that primarily serves poor children and the disabled.
Rep. Lois Kolkhorst’s “health care compact” bill, HB 5 — which would effectively ask the federal government to give Texas and other states block grants to run Medicaid and Medicare as they see fit — passed easily out of the House, and was heard in a Senate committee on Tuesday. That’s despite Democrats’ warnings that any effort to redesign Medicare will terrify, or potentially harm, seniors and a failed attempt by Rep. Craig Eiland, D-Galveston, to remove Medicare from the Texas compact bill.
The Democrats have started doing daily recognitions on the House floor and LegeTV is calling it Real People, Real Consequences. Here are a few of them.
David Koch and their corporate giant, Koch Industries, have played an extensive role in thecorporate takeover of government, both at the state and federal level. This weekend, another of the Kochs’ projects surfaced in Texas, as the state’s Republican lawmakers rammed through a Koch-backed bill that would make it harder for consumers, workers, and small business owners to bring civil suits against corporations.
House Bill 274 — dubbed the “Loser Pays” bill — passed the state House Saturday with no amendments and no debate after Gov. Rick Perry (R) deemed it “emergency legislation,” rushing it to the top of the legislative agenda. Under the bill, those who sue corporations could be held responsible for the defendants’ legal fees if they lose the case — and in some instances, even if they win. If the court sides with the plaintiff, but awards a smaller amount than the defendant offered in a potential settlement, the plaintiff could be forced to pay the defendant’s court costs, even if those costs exceed the amount awarded to the plaintiff. For this reason, state Rep. Craig Eiland (D) wanted to rename the bill the “loser-pays-but-sometimes-the-winner pays-too” bill.
The law could intimidate potential plaintiffs into avoiding lawsuits against corporations, because they could be on the hook for massive legal fees if the court ultimately doesn’t side with them.
Not surprisingly, among the bill’s biggest proponent are large corporations, including Koch Industries, Chevron, and G.E., which all lobbied on its behalf. Also backing the bill is the Texas Public Policy Foundation, a non-profit front group funded largely by corporations, including Koch Industries and three other Koch-owned companies: Georgia Pacific, Invista, and Flint Hills Resources.
As with the Photo ID bill passed by the Lege earlier this session, the so-called “sanctuary cities” bill is a solution in search of a problem.
The following exchange is from the March 2, 2011 House State Affairs Committee meeting. The exchange can be found from the committee’s broadcast archives, at the 44:11 point of the video. (Source)
Rep. Oliveira: I will be crystal clear with you, too. I am opposed to sanctuary cities, but I still don’t know if one exists. If you find one that exists, I’d love to hear it.
Rep. Solomons: Based on what I’ve read, we don’t have any, so I don’t know what the big deal is.
Rep. Oliveira: Then we don’t need the bill, I guess.
Rep. Solomons: No, I think we need the bill because enough people perceive that this is a problem, and so in context, we probably ought to ensure that we have a uniform consistent policy in the state of Texas about this.
After hours of emotional debate, the Republican-led Texas House voted 100-47 on Monday night to give preliminary approval to legislation that would ban so-called sanctuary cities that critics contend are havens for illegal immigrants.
Latino lawmakers charged that the bill – one of Gov. Rick Perry’s top priorities – would lead to racial profiling and force millions of Texas Hispanics to “live in fear.”
The bill has drawn has drawn strong opposition from Hispanics as well as law enforcement groups. who say it will impose an added burden to already overworked police departments.
Fort Worth Mayor Mike Moncrief has also urged lawmakers to oppose the bill, saying it would slap Fort Worth and other Texas cities with an :”unfunded mandate” to enforce federal immigration laws and would open the door to costly litigation against cities.
Hispanic leaders argued that approving the law will encourage racial profiling and could lead to American citizens being harassed because of their heritage. Martinez Fischer, who chairs the Mexican-American Legislative Caucus, denounced the bill as “anti-Hispanic.”
Rep. Rene Oliveira, D-Brownsville, called the measure “the most divisive bill I’ve seen” since he entered the Legislature in 1981.
“We know there are people out there who will do racial profiling…and now they’re going to have a blanket amnesty to do it,” he said.
The bill has also drawn opposition from law enforcement. Police chiefs have said they will have to spend money to train officers in immigration enforcement and hire designated officers, which could cost millions of dollars. With prisons at capacity and cities laying off officers because they can’t pay them, officers are already staggering under the load of local crime and community issues, they said.
Arlington Deputy Police Chief Jennifer White and several other law enforcement officials said last week that the bill would further strain police department budgets and could make some Hispanics fearful about calling police. Officials from Dallas, El Paso and Bexar Counties have also opposed the bill.
Neeless to say, even though this problem doesn’t exist, Texas Gov. Rick Perry deemed it an “emergency” and the GOP lemmings are going along. As Paul Burka pointed out last week, this bill really has nothing to do with policy, but with the upcoming GOP primaries in Texas and the next race for Speaker, No Sanctuary for Straus.
Of all the issues that inflame the Republican base, immigration is the one that the voters care about the most.
That’s right protecting public education, higher education, nursing homes, and the neediest among us, etc.., are not emergencies. Nope, none of those are the most important issue to the wing-nuts and the GOP faithful. What’s more important is the non-existent issue, sanctuary cities. A bill that most, if not all, of the elites in the Texas GOP could care less about. Because their businesses profit by exploiting the cheap immigrant labor, which drives all of our wages down – think home builder Bob Perry.
There are many reasons why this is a bad law. It is an unfunded mandate on county and municipal law enforcement. Law enforcement is against it, and when all “stakeholders” don’t buy into a policy it’s likely to be poorly implemented. It does nothing to fix the issue of illegal immigration. And it will likely make local law enforcement over-focus on this to the detriment of other, more serious crimes.
It is impossible to take the GOP serioiusly when it comes to the issue of immigration. They never propose policy that will seriously address this issue. If they were serious they would also put forward a new policy that would effectively punish Texas businesses that hire undocumented workers. If and until then the GOP’s efforts on immigration should be treated as the political ploy that they are. Anyone who thinks this is going to change anything in this state in regards to immigration, also likely believes that tax cuts create jobs.
In the bloodiest budget fight in memory, Texas legislators are slashing funds for rock-bottom basic services: schools, prisons, mental health care and nursing homes. The state is broke, say the slashers. We can’t afford luxuries.
But Rep. John Davis, R-Houston, believes we can afford a tax break for yacht buyers.
His astounding House Bill 2187, “relating to the imposition of and a limitation on the sales tax imposed on certain vessels” — which is to say, boats costing more than $250,000 — would cap the sales tax on a yacht at $15,625. That doesn’t sound bad until you do the math: For a $20 million yacht, it’d be nearly a 98 percent reduction in the state sales tax.
Ridiculous as the pitch is, though, we worry that Texas legislators are falling for it. It’s scary enough that the House Committee on Ways and Means voted to let the bill out of committee and onto the floor. But even scarier is the let-them-eat-cake tone of the committee hearing, as reported by the Texas Observer.
A quarter-million-dollar boat is a trifle, argued Rep. Lanham Lyne, R-Wichita Falls: “It doesn’t take much to get over $250,000.”
“This is not just for rich people,” an industry representative happily agreed. “You can get used yachts as well.”
What a boatload!
Memo to responsible legislators: Sink this bill now.
This idiotic bill and it’s supporters are important because it’s just these kinds of policies, top down, proposed by wealthy elites that got us into our sorry economic state. Paul Krugman has more, The Unwisdom of Elites.
The fact is that what we’re experiencing right now is a top-down disaster. The policies that got us into this mess weren’t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.
These days Americans get constant lectures about the need to reduce the budget deficit. That focus in itself represents distorted priorities, since our immediate concern should be job creation. But suppose we restrict ourselves to talking about the deficit, and ask: What happened to the budget surplus the federal government had in 2000?
The answer is, three main things. First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs.
So who was responsible for these budget busters? It wasn’t the man in the street.
President George W. Bush cut taxes in the service of his party’s ideology, not in response to a groundswell of popular demand — and the bulk of the cuts went to a small, affluent minority.
Similarly, Mr. Bush chose to invade Iraq because that was something he and his advisers wanted to do, not because Americans were clamoring for war against a regime that had nothing to do with 9/11. In fact, it took a highly deceptive sales campaign to get Americans to support the invasion, and even so, voters were never as solidly behind the war as America’s political and pundit elite.
Finally, the Great Recession was brought on by a runaway financial sector, empowered by reckless deregulation. And who was responsible for that deregulation? Powerful people in Washington with close ties to the financial industry, that’s who. Let me give a particular shout-out to Alan Greenspan, who played a crucial role both in financial deregulation and in the passage of the Bush tax cuts — and who is now, of course, among those hectoring us about the deficit.
Little will change, until we change the policies of the last 30 years that got us into the economic mess we are in. It’s long past time for the wealthy and corporations to start paying their fair share. We will not get out of this until we put people back to work. Corporations won’t hire, so the government must.
BossKitty at TruthHugger sees a divided America is easy pickings for anyone who is really organized. If the Tea Party succeeds, America becomes a loose federation of independent states, all programs and responsibility for regulation will fall into individual state hands. Everyone in each state will foot the bill for services previously funded by the Federal government. Tea Party would replace big government with Corporate Governance … they don’t want funding for anything because their corporate buddies will be in charge. Federal Government in the crosshairs REDUX – OpEd.
Planned Parenthood of South Texas’ annual luncheon in Houston — attended by PDiddie at Brains and Eggs — featured pollster Celinda Lake and some revealing statistics regarding the birth of the death of Republican overreach.
All week, House Democrats derailed major pieces of legislation on technicalities. Frustrated Republicans pushed back Saturday, using a rare maneuver to prevent debates and amendments as they eventually approved one piece of significant legislation, one that would make it financially riskier to file lawsuits.
With three weeks left in a legislative session that began Jan. 11, piles of significant proposals await action. And aggressive use of legislative rules in the House and Senate could make the always-hectic closing days of the session even more dramatic.
“Every session has a boiling point,” said Rep. Pete Gallego, D-Alpine . “We just hit ours.”
Last week, Democrats slowed consideration of some key pieces of legislation by finding small violations of the House rules, such as imprecise records of committee hearings. So when one of those bills, House Bill 274, returned to the floor for action Saturday, Republicans forced a quick vote on it, preventing their colleagues from debating or amending it.
That vote reflected the impatience of a GOP majority that has seen its legislative efforts slowed despite a 101-49 advantage in the chamber. That majority, thrust into office by a tea party that expects bold action, also knows that time is running short: Thursday is the last day to give House bills initial passage.
Like a petulant child who can’t win by playing by the rules. They have decided to take their ball and go home. Anyone can “win” by changing the rules in mid-stream. It’s easier and takes much less skill and acumen to do by changing the rules. No wonder the GOP has chosen to do it this way.
The reality is that the GOP in the Senate has been thinking about doing away with the 2/3rds rule for at lest the last two sessions. And most certainly in the House, since electing a super majority this session, knew all along they had this ploy in their back pocket. What that means is that they never dealt in “good faith” with the Democrats because they always knew they had this option to fall back on.
While the Senate last week adopted a budget slightly less austere than the House, it’s worth examining the House plan to see which programs the conservative coalition has deemed non-essential.
It cuts state Child Protective Services “intake” offices so severely that officials predict 85,000 calls about abused children will not be answered.
It shortchanges school districts for the 80,000 new students expected to show up next year.
It cuts Medicaid reimbursement rates to nursing homes so drastically the industry predicts 75 percent of the state’s facilities will shut down, leaving 60,000 elderly Texans without care and 47,000 employees without jobs.
It slashes funding for medical school residency programs.
And the House plan slashes Early Childhood Intervention, which provides rehabilitation for infants and toddlers with severe birth defects or life-threatening illnesses at a crucial time in their cognitive development. The program will now serve 4,000 less infants.
So, according to Texans for a Conservative Budget, that makes Early Childhood Intervention a non-essential program.
Many believe that once these policies are implemented and Texans feel the pain there will be a backlash. That’s likely true. It’s just too damn bad is has to come to that before there will be a backlash. The “emergency” bill the GOP rammed through yesterday is payback to their massive corporate benefactors.
This legislation threatens Texans with the possibility of having to pay the bloated legal costs of big insurance companies or multinational corporations like BP or Wal-Mart. The lobbyists call this “loser pays,” but really it is “families pay” because only individuals – not corporate defendants – would be forced to pay. What’s worse is that you could see your life savings wiped out not only if you lose a valid lawsuit, but even if you just don’t win big enough. In other words, you can win… and still lose.
Florida’s experience with a similar legislation was so bad that lawmakers there repealed it just five years later. In fact, commonly known as “British Rule,” this sort of legislation was rejected by our founders more than two centuries ago because it guts individual liberties. Now, even the British themselves are considering abandoning it in favor of our American system.
If we don’t act now, this dangerous bill aimed at protecting big insurance companies and polluters at the expense of families and small businesses will become law. Tell your state representative that Texas families can’t afford HB 274.
It’s easy to follow the rules and pass bills when legislation is good public policy. It’s when bad public policy – protecting the rich and powerful over average Texans – is being forced through, that decades of tradition have to be tossed aside.
For the GOP to say the Democrats made them do this may be true. But playing by the rules is hard, and the GOP is showing that if the Democrats are going to make them play by the rules, then they will just change them. That’s the choice they have made. They are taking the ball and going home.
About a month ago state Sen. Steve Ogden (R-Bryan), chair of the Senate Finance Committee, seemed pretty much in agreement that not only would some of the Economic Stabilization Fund, aka Rainy Day Fund, need to be used to cover the budget shortfall, he was even starting to make noise about raising taxes. Here’s what the TO had to say about it, The Highs and Many, Many Lows of the Senate Budget Debate.
Where Have You Gone, Steve Ogden?
Perhaps the most blatantly political remarks of the day came from the person you might least expect—Steve Ogden. The Republican from Bryan has been a consistent source of clear-thinking and moderation this session. (There’s a reason every speaker on Wednesday—both Democrats and Republicans—began their remarks by praising Ogden).
But just before he officially passed the Senate’s budget—and set up a tough conference committee fight with the House—Ogden made a closing speech that was oddly political.
He said he believed that during recessions, government must ensure continued economic growth in the private sector. Fair enough. And, he continued, that meant the state couldn’t raise taxes, especially taxes on business, without hurting the economy. He praised the budget plan for not raising taxes on business.
This was the same Steve Ogden who, back on the session’s first day, pleaded with his colleagues to address the state’s structural deficit by raising the business tax: “None of us were elected to go out and raise taxes on anybody, but the margins tax is different,” he said back then. Go figure.
When even Ogden’s contradicting himself, you know things have gone amiss.
And then, as Ogden struggled to get enough votes for a bipartisan budget, he said this.
Ogden blamed, in part, outside groups that he said have managed to influence the clubby chamber.
What kind of outside groups were influencing the “clubby chamber”? All we have to do is look at what changed about the budget from committee to Senate floor. The RDF money was ripped from the budget. And who is against that. Well this Koch Brothers funded group for one, that’s now running TV ads all over the state. (Here’s a great video on the Koch Brothers).
Ogden went from a bipartisan budget, to a partisan budget after being pressured by corporate-funded groups on the far right. Here’s a little of what Ogden had to say during his closing argument on his bad budget proposal yesterday.
What do you do when the economy is not so healthy? You do everything in your power to get that economy back on it’s feet. Well the first thing you make sure of is you do no harm to that economy. And the one thing that you almost cannot consider, when an economy is trying to climb out of recession, is higher taxes. Because there is not an economist alive that will tell you that higher taxes will stimulate the private sector. You can’t do it! You’re eating your seed corn. And so that is, in my opinion, the reality we faced when this budget came here. You cannot raise taxes on Texas businesses as they try to recover. [Emphasis added]
Then shortly after, speaking about the $7 billion that will be spent over the next biennium, funded by $3 billion in bonds, aka debt, he say this.
Highway contracts will exceed $7 billion over the next biennium. Highway contracts will be higher. That will put people to work, that will stimulate the economy, that will help us recover.
To a thinking rational person that is a contradiction. In one breath he is saying we can’t spend more, through taxes, to fund our budget as it’s needed through raising taxes because it will not stimulate, but actually, hurt our economy. Then in the next breath he is saying look how spending more money, in the form of debt, stimulates the economy.
The reality is that there is ample evidence that raising taxes does not harm the economy, as Ogden believes. All one has to do is go back and look at what happened in the 1990’s, 1993 Deficit Reduction: a Lesson on Tax Policy. It’s much more likely the best way to fix our economy would be to raise taxes, especially on the rich and corporations.
But the really egregious part of what Ogden said was the line about “seed corn”. It shouldn’t surprise anyone that an oil man doesn’t know much about farming. Obviously taxing “businesses” per se, may not be the best thing to do during a recession. But taxing the rich and those who are way under-taxed is a good thing to do during a recession, to keep from cutting needed services and creating higher unemployment.
And when it comes to seed corn. The best economic seed corn there has ever been is funding those things that help people climb the economic ladder. Public education, health care, nursing home care, taking care of the mentally ill. Certainly firing teachers and closing schools is one of the worst forms of eating seed corn.
We’ve spent considerable time at this blog over the years documenting the massive inequality of the tax structure in Texas. Using an extremely regressive sales tax to fund our state, while not having one of the fairest taxes, a progressive income tax, only makes the problem worse. The more money someone makes in this state the less, as a percentage of their income, they pay in taxes. Shifting the costs of government on the backs of those least able to afford it is wrong and unfair. Of course Ogden and the GOP will never talk about taxing the rich, they will only mention business. They don’t want to acknowledge the sweetheart deal the rich get in this state, because they are rich too.
As the article above states Ogden understood, at the beginning of the legislative session, that Texas had a structural deficit and needed to the fix, Perry/GOP tax swap scheme of 2006. He even went so far as to file a resolution (SJR 52) to create a corporate income tax in Texas.
And now because of a massive influx of Koch money into our state, Ogden’s brief moment of fiscal sanity has ended, and we will eat our seed corn.