05.19.10

Perry, Dewhurst, Straus playing politics with budget cuts

Posted in Around The State, Commentary, Taxes, The Budget at 8:59 am by wcnews

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?”

With an election coming up those things are “politically unpalatable”, but once they’re safely reelected they will be their first best option. We’re already seeing headlines like these, UTMB to lay off 363 prison health care workers (which could land the state in court), and , 122 laid off so far, and scores more at risk.

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.

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