02.10.10

2011 budget cannot be balanced like in 2003, not this time

Posted in Around The State, Commentary, Election 2010, The Budget at 5:48 pm by wcnews

There has already been, and will likely continue to be, parallels made between the budget shortfall that will be facing the legislature in 2011 to the one that it faced in 2003. This morning on my drive to work KUT had an item on this subject, Budget Cuts, Then and Now. It’s part of a larger piece at the Texas Tribune, The Last Time Around, which incorporates some of what Comptroller Susan Combs had to say last week, (see video linked in here).

Essentially in 2003 the budget was balanced on the backs of the poor, or as Eva DeLuna Castro of the CPPP put it, “the backs of other people”. Much of that came in the form of cuts to CHIP and Medicaid, (more on that in a minute). But there was something else that happened in 2003 as well that got little attention then, and still get’s little attention now. While the GOP controlled government did not “raise taxes”, the GOP did raise fees on Texans by $2.7 billion.

“As the fiscal watchdog for our taxpayers, I want Texans to know who’s picking up the tab and how much that tab will be,” [Comptroller Carole Keeton] Strayhorn said.

Increases in critical areas impact teachers, health care, children and businesses.

“There will be a series of new fees that must be paid to the Attorney General by child support recipients,” Strayhorn said. “Momma’s now going to have to pay a locator fee to find a deadbeat dad.”

Comptroller Strayhorn said she instructed her staff to analyze the “non-tax” revenue increases after her agency had received numerous inquiries from the public about increases on teachers, health care, children and businesses.

“These are not the only increases that Texans are going to pay. These are only the new increases passed during the recent regular session. This list does not include any additional fee hikes made by agencies under existing authority,” Strayhorn said.

Most of the high-ranking GOP at the time - Perry, Dewhurst, Abbott, Craddick - were quick to whine, but couldn’t disprove the facts. While they technically kept true to Grover’s pledge, the myth that is out there that the budget was balanced in 2003 only by cutting is just that, a myth. Higher fees on all Texans and cutting from the budget items that help the neediest Texans cannot be allowed this time.

Here’s what former state Rep. Talmadge Heflin had to say about 2003.

Yet the authors of those 2003 cuts think they made back then the best out of a bad situation. “At the end of the day, looking back, everybody fared pretty well,” says former State Rep. Talmadge Heflin, R-Houston, who chaired the House Appropriations Committee in the 78th Legislature and is now the director of the Texas Public Policy Foundation’s Center for Fiscal Policy.

We can assume that because Heflin lost his reelection the 2004, and rematch in 2006, and went on to a think tank that he fared pretty well because of it. It wasn’t just Heflin who lost, many more House GOP members lost their seats because of what happened in 2003. The draconian cuts of 2003, especially to CHIP, were a big part of the Democrats resurgence in the Texas House. And the big three in the GOP seem well aware of that [PDF], and other constituencies they don’t want to offend as we head to November.

Reducing direct services should be your last option, but should be identified, if necessary, in order to meet the 5 percent target. Specifically, there should be no reductions to benefits or client eligibility levels in the Medicaid entitlement, Children’s Health Insurance Program and foster care programs, and no reductions to eligibility staffing. Programs exempt from this request include the Foundation School Program, Social Security contributions, contributions to the Teacher and Employee Retirement Systems’ retirement programs, contributions to the Higher Educations Fund, and debt service for previously issued obligations.

Also from 2003 there’s this interesting change that has taken place by some on the right about how certain budget cuts failed in 2003 and actually wound up costing the state more money. Via Grits, An ‘unrepentant, hard-right conservative’ was ‘forced to agree’ with prison diversion ‘based on the facts’.

That 2003 budget cutting of probation, parole and treatment programs backfired.

Yes, the cuts helped balance the budget in 2003-4, but they led to significantly expanded spending in subsequent years in the most costly category of criminal justice spending-prison beds. 2003’s cuts saved nickels in that budget cycle, but forced future spending of millions.

While the GOP may try and package and sell it better this time, the plan is likely no different. From most of what’s been said and written a rough plan seems to be emerging. Everyone agrees that there will be a large shortfall to make up in 2011. How big the shortfall will be is not clear at this time, but somewhere between $10 - $20 billion seems to be the consensus right now. The Rainy Day Fund (RDF) is estimated, right now to be $9 billion, but may be more like $8 billion by the time 2011 rolls around. And Combs thinks that the legislature would be willing to use half of the RDF in 2011. That will still leave billiond of dollars to make up. And as Combs discussed that still leaves $4.5 billion left in cuts, or “additional revenue sources”. But Dewhurst doesn’t appear on board with that, and there’s always gambling as an additional revenue source.

But Dewhurst and other Republican leaders say they plan to resist any assault on the rainy day fund to protect the state from an even potentially worse budget shortfall in the 2013 session.

“I think we’re in good shape for 2011 but I’m concerned about 2013,” Dewhurst, the presiding officer of the Senate, said in a telephone interview last week. “I have colleagues who tell me all the time not to worry about the future. I can’t do that and look myself in the mirror.”

[…]

Sen. Rodney Ellis, D-Houston, said he plans to revive unsuccessful legislation to legalize casino gambling, presenting it as a huge revenue generator that could put billions into public schools and highways. “If we’re going to ask Texas families to sacrifice in these tough economic times, I think it’s the responsibility of the Legislature to consider all reasonable options to help generate revenue and ease the burden on our constituents,” Ellis said.

All of this brings us around to where we are right now. We’re in the middle of primaries, facing a budget shortfall in the next session, and few running want to offer any specific solutions. With teabaggers harassing GOP incumbents they’re unlikely to step out of line, and offer sensible solutions, just more of the same - higher fees and budget cuts for the hard working Texans. And as DeLuna Castro pointed out Texas is already cut to the bone.

Even the 5 percent cuts already requested will be easier said than done, says DeLuna Castro. “There’s not a lot that Texas does that’s optional. That’s what they’re going to find out when they get the descriptions of the cuts. We’re not really doing much that’s fat or duplicative or unnecessary. Everybody needs something that a state agency provides.”

Our transportation system has been neglected for almost 20 years. We have an extremely high drop out rate, our education systems - higher and primary - are deteriorating and underfunded. The number of hungry in the state is ballooning. We have neglect in this state of epic proportions and we still have rely too much on the poor and middle class to shoulder the lions share of the burden for paying taxes in this state. It’s high time it ended. From the CPPP’s Who Pays Texas Taxes? [PDF]:

the Comptroller’s newly released biennial study of the fairness of the Texas tax system, Texas Exemptions and Tax Incidence, demonstrates conclusively that low-and moderate-income Texas families bear a disproportionate share of state and local taxes. We need a fairer system to fund public structures so can improve and maintain Texas families’ quality of life. [Emphasis added].

If I were a Democrat running for office, and I’m not, I would highlight what the GOP did back in 2003 and warn Texans that they will do it again. It’s not hard, Perry has said he’s going to do the same thing he did in 2003 if reelected. Last time the GOP cut health care to children and raised fees by billions on every Texan, while asking little if anything form those who have the most, including corporations. It’s high time those who much has been given, do what’s expected of them. They must pay their fair share to insure that Texas’ future is bright. For roads, for education, for children’s health care. This time we can’t balance the state’s budget on the backs of the poor, we must do what is fair and just.

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