07.30.11

Diversions & Austerity – the Texas GOP two-step

Posted in Around The State, Bad Government Republicans, Commentary, Right Wing Lies, The Budget, The Economy, The Lege at 2:43 pm by wcnews

Tow articles on the economic shenanigans of the GOP in Texas. Another diversion/budget trick of the GOP led Texas Lege, Texas holds on to millions of dollars intended to help poor residents with electric bills.

Texas is hoarding millions of dollars intended to help hundreds of thousands of elderly and impoverished residents pay their electric bills to survive the summer heat.

As Texas suffers through one of the most menacing heat waves in its history, the state this fiscal year has collected $130 million designated to help offset the spike in electrical use but has provided only $28 million thus far to those in need. Without the help, many Texans forgo air conditioning and risk their health.

Even with more people and more need, Texas is spending half as much as it did nearly a decade ago to help the poor and elderly survive summer. The reason: State lawmakers locked away the money to help eliminate their budget shortfall.

[...]

The program, called LITE-UP Texas, began after electrical markets were deregulated in 1999.

In 2004, the state changed eligibility requirements, causing more than half of the almost 800,000 customers who had enrolled for assistance to be cut off. The state continued to collect the fee but kept more of the money to balance the budget.

[...]

Lawmakers have all but cut out spending from this pot of money on “customer education,” which was to include both awareness of the discounts and how to navigate the deregulated electricity market.

In fiscal 2002, the state spent $12 million on customer education, which paid for TV ads. But for at least the last five years, it has spent $750,000 a year, which mostly goes for a website to help educate consumers.

By the end of the next two-year budget cycle, Texas will be sitting on nearly $1 billion of unspent funds intended for utility bill discounts.

In a report released this week, state Auditor John Keel tiptoed around the huge sum. Keel criticized the Public Utility Commission for not analyzing how much fee revenue is needed  as its own rules require  when it sets the rate each year.

But the commission said the Legislature essentially dictates that the highest rate allowed be collected.

Chief Senate budget writer Steve Ogden, R-Bryan, said the only alternative to holding dedicated funds would have been to cut more out of education, public safety and other key programs.

“The utilities got the Legislature to say that in order to assist low-income Texans, let’s make our ratepayers pay for it,” said Ogden, who calls the benefit assessment “a rip-off” deserving of repeal.

That’s rich from Sen. Ogden. They can’t raise taxes on the wealthy or corporations. But they can steal money from the poor and elderly, that’s supposed to be used to pay their electricity during the hot Summer months. That’s the real “rip off” Senator!

Also another great column from Mitchell Schnurman at the FWST, In construction, public spending picks up slack in private sector. It shows how public spending has been keeping our economy from depression, but if cut off, could make our economy much worse.

For all the complaints about government spending and the national debt, realize this: It has helped keep a big chunk of the construction business afloat, even in fiscally conservative Texas.

Look around Dallas-Fort Worth today, and most of the big construction projects were awarded by the public sector and financed with public debt. That often happens in the wake of a deep recession because private businesses pull back while city, state and federal governments continue to invest for the long term.

Those trends have been exaggerated in the past five years after residential real estate hit record highs and then collapsed. Office and retail construction fell just as sharply, at least in North Texas. Today, precious few cranes can be seen on the landscape.

Meanwhile, construction spending has doubled for highways, bridges, sewage systems and the like, helped in part by federal stimulus funds. Schools and colleges have remained one of the strongest categories through the recession and shaky recovery. And hospitals have been an important growth sector.

Consider the big deals that have made local headlines: $2.1 billion for the North Tarrant Express highway project, $1.9 billion to renovate terminals at Dallas/Fort Worth Airport, $1 billion for the DFW Connector, almost $1.3 million for Parkland Hospital in Dallas, $800 million for a new hospital at the University of Texas Southwestern Medical Center at Dallas.

Dallas Love Field is doing a $519 million renovation. The University of Texas at Arlington spent $126 million on an engineering building that opened this year, and construction is under way on its $78 million College Park Center.

“I’d hate to think about where we’d be without these public projects,” said Raleigh Roussell, president of TEXO, an industry association that represents commercial contractors in 62 counties in North Texas.

[...]

In Texas, construction spending in the private sector fell 13 percent from 2008 to 2010, while public construction grew 14 percent, said Bob Rundgren, manager of quality data for Reed. The most growth was in civil construction, which includes roads and bridges.

Data on North Texas compiled by McGraw-Hill reveal more details. There have been steep drops in construction of stores, restaurants, hotels and warehouses. The big-volume contracts — and dollars — came from school districts, cities and public hospitals over the past two years.

What happens when that spigot gets turned down? Many giant projects, especially the highway expansions, were years in the making and will continue to lift the economy for a while. But the politics and economics in Washington, Austin and city halls dictate a retreat.

Budget cuts are coming to almost every part of government, and officials risk a backlash if they borrow too much. Some contraction is already evident.

State and local spending on education fell by 28 percent nationwide, or $25 billion, since the peak, the Census Bureau said. North Texas is projected to show a similar decline in education construction, and it has a fast-growing population.

On Friday, new GDP numbers showed that the U.S. economy slowed to a crawl in the first half of the year. Among the reasons analysts cited were the wind-down of the federal stimulus last year and a sharp reduction in spending by states and cities in 2011.

For almost two years, some vocal critics have been calling for government to shrink and let the private sector take over. That’s coming soon enough, for better or worse.

Diversions and austerity, making the economy worse for poor, working, and middle class Texans.

Further Reading:
SAO report, An Audit Report on the System Benefit Fund and the Low-Income Electric Discount Program at the Public Utility Commission.

1 Comment »

  1. Eye on Williamson » State Sen. Steve Ogden to retire (again) said,

    September 20, 2011 at 11:17 am

    [...] Perry/GOP tax swap scheme of 2006. And shorting public education by $4 billion in the just passed, GOP diversions & austerity budget, that is putting Texans in poverty at a rate not seen in [...]

Leave a Comment

You must be logged in to post a comment.

7ads6x98y