Republican Budget Unbalanced, Unfair & Destructive

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The Republican Party has boasted of the unprecedented super majority it received in November. Now they are trying to govern with over 2/3 in the House and nearly 2/3 in the Senate.

The old adage is you spend money on your priorities. If that is the case, then the Republican Party doesn't give a damn about students, struggling families, teachers, the elderly, people struggling with medical bills, state employees and so many more.

Scott McCown from CPPP made it clear what this budget does.

The proposed budget is merely a starting point for hearings and debate leading to the official state budget, but we already know that the cuts-only approach taken in the proposed bill would hurt Texas families, cost us jobs, and undermine our economy recovery.

“Texas needs a balanced approach that includes using the Rainy Day Fund and adding new revenue. The proposed budget uses little more than the General Revenue the Comptroller projected is available in her Biennial Revenue Estimate, leaving us at least $27 billion short of what we need to write a budget that funds what the state is doing now. With a revenue shortfall this large, as the proposed budget shows, the Legislature cannot balance the budget through cuts alone without doing terrible damage. Among many other terrible things, the proposed budget would cost almost 10,000 state jobs, would cut already inadequate provider rates for Medicaid and CHIP by 10 percent, and would underfund the Foundation School Program for public education by almost $10 billion-a cut of almost 25 percent.”

McCown is right, this is a base budget. A starting point of discussion and debate. The one troubling thing we aren't talking about as the slash and burn numbers begin to roll out is, how did this happen?

Texas unemployment numbers are virtually static at 8.1%, our population has grown so much in 10 years we are getting an increase in congressional seats and Texas has the equivalent population as New York did in 1930. If all this is true, why then do we have the largest deficit in the country in both size and per capita amount?

Mismanagement of the state budget and tax code perhaps?

Fort Worth Senator Wendy Davis discussed the problem clearly and highlighted what we need to focus our collective energy on.

The Legislative Budget Board's $156.4 billion budget proposal released to House members last night will cut $31.1 billion from current spending, even before accounting for population growth. The budget, drafted for House leadership, will slash education funding by $9.8 billion, while the student population is projected to grow by 80,000 students each year. Several primary and secondary education programs are recommended for elimination, including: pre-k early start grants; Texas reading, math and science initiatives; criminal history background reviews; and science labs. Higher education is slated to lose $1.7 billion in funding including significant cuts to the Texas Equalization Grants and Texas Grants programs statefunded financial aid.  Other budget recommendations include reducing prison populations through early release of prisoners, cutting Medicaid reimbursements to doctors, hospitals and nursing home by 10 percent, and eliminating family practice and rural public health physician rotations.

“With such a dramatic budget shortfall, cuts must be made,” Davis said. “But education funding should be our highest priority. We need to ensure that Texans are adequately educated so that we do not lose competitive ground at a critical time in our nation's economic recovery.”

[…]

“While other states are competing for dollars to race to the top in education funding, Texas,  under this budget recommendation, will be sprinting to the bottom,” Davis said.

Davis said that any proposed budget that does not address the structural deficit in education funding, created in 2005 when lawmakers turned to an underperforming business franchise tax, will push the current biennial shortfall in public education funding of about $7 billion into future budgets indefinitely.

San Antonio State Representative Mike Villarreal echoes Sen. Davis and points to other troubling numbers we need to consider.

Public education will be cut by 23% under the Republican budget proposal. Funding for the Foundation School Program (FSP), the state's basic system for funding public education, would be 23% — or $9.8 billion — below the amount required by current state law.  The All Funds budget for the School for the Blind would fall by 59%, or $55 million.  The base budget would also eliminate state grant programs for pre-kindergarten, high school completion, and science labs.

“The Republican proposal means that many school districts will be forced to cut services for children, close schools, eliminate teachers, teach science without science labs, raise property taxes and make other costly decisions,” said Rep. Villarreal. “I don't want this for my own children or anyone else's. Our children deserve more.”

The base budget also slashes higher education. Funding for universities would decline by 9.5%, or $594 million, forcing many colleges to raise tuition. The shortfall is much larger if you take into consideration growth in student population and increases in costs.  The number of students receiving TEXAS Grants, the state's main financial aid program, would fall from a total of 156,225 in 2010 and 2011 to 78,080 in 2012 and 2013. From 2011 to 2013, the number of students would decline from 86,830 to 27,135, a 69% cut.  “The Republican proposal would make college more expensive, placing higher education and a good job out of reach for thousands of young Texans.”

Houston area Representative, Armando Walle, also focused his concerns on education spending cuts.

“Republican lawmakers have shown their priorities with the proposed budget — and have indicated that the needs of school children, the elderly and working families are not included in those priorities.

Our students, from pre-K to college, are suffering horrible cuts. The proposed Republican budget completely removes all state funding for pre-K or early childhood education, eliminating programs for over 100,000 children.  The primary account for financing Texas public schools suffers a $9.8 billion reduction, which will surely result in teacher layoffs, overcrowded classrooms and school closures for our students.  ESL students will also suffer with the complete elimination of the Limited English Proficiency Student Success Initiative.

The TEXAS Grant program and all other higher education grant programs, which have been instrumental in providing deserving students with assistance in pursuing a higher education, are cut dramatically.  Economist Ray Perryman predicts that this loss will cost Texas over 1 million permanent jobs over the next two decades.

In addition to harming our children, Texas's elderly are forced to bear an overwhelming portion of the cuts.  Republican budget writers have proposed a $1.57 billion reduction in nursing facility payments.  The 10% rate cut to Medicaid providers adds insult to injury and will make it very difficult for many nursing homes to continue operating.

The deep budget cuts were designed to strike fear in the heart of Texans.  Gov. Perry has denied  that Texas is in a budget crisis and claims that the revenue numbers may change.  However, it is abundantly clear that the proposed budget responds to a crisis created by Republicans and creates a crisis for all Texans.”

Austin American Statesman reporter, Jason Embry, speculates the base budget is a shell game of sorts. He openly muses, “Anybody else get the feeling that part of the reason for this budget is to make lawmakers look like heroes when funding for agencies drops by, say, 7 percent instead of 14 percent once the rainy day funds are tapped and/or the comptroller ups the revenue estimate?”

As Kate Alexander points out the budget cuts are deep across the board. Of course this is the worst case scenario. Or is it?

The Texas Conservative Coalition Research Institute has released a “Blueprint for a Balanced Budget”. With nearly $20 billion in cuts and postponed payments, it pushed this years budget shortfall onto the next biennium. Beyond the obvious problem of failing to deal with, and increasing, our structural budget problems, it also doesn't balance the budget.

The Comptroller has repeatedly stated we have a $27 billion budget shortfall. $20 billion in cuts, simply won't fix the problem.

The Republican written, passed and executed margins tax is bringing in significantly less money than expected or projected and all the dedicated funds have been raided to balance previous budgets.

Simply, the Republican Party broke Texas and now they can't come up with a solution to fix her. Instead, we will all have to watch massive cuts on essential services and watch them impose fees (since they won't say the word tax) and shift the burden to cities and counties. The lower level government will have to do something, so they will in turn raise taxes and suppress both residential and commercial growth.

All in all, it's a mess and the only solution proposed so far is to cut our way out of the problem… not fix it.

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14 Comments

  1. Number of new unemployed?
    I'm reading:

    – Unemployed teachers, school administrators, and school support staff

    – Young adults that now have to try to find jobs since they can't afford college

    – Unemployed nursing home staff

    – Unemployed state park staff

    I understand that difficult decisions need to be made. And I buy into the line that the first budget is a “worst case” scenario so that things will look better wen they cave on some items.

    But at first blush, does anyone have an expected rise in unemployment that the current budget would cause?

    • Please..
      Maybe it's time for the school districts to start spending the money on education instead of wasting it on the pet projects of the administrators.  

      What is it about Democrats that they don't seem to understand that the only way out of debt is to cut the spending until the debt is paid off?  

      Seems like Grandma was right back in 2006. And the Democrats signed the hot check along with the Republicans.

      • Faulty Numbers
        Only if you lump service employees that work in a school district does the ratio look overly tilted towards administration. If you talk about actual administrators:teachers, the ratio is close to 1:25, if not low.  I don't mind talking about ways to scale back and ways to streamline, but we should use facts and not TRRCI fiction to have that debate.

        The other solution, fix the margins tax so it brings in more than half of the projected revenue. That would help close the structural gap. Also, we should really accept our federal tax funds that Texans are paying into but not receiving because of Perry's personal political agenda.

        Any other ideas? Let's put it all out there.

      • The way out of debt
        Well the REAL way out of debt is spend less than you take in.

        Achieved by either bringing in more money or cutting what you spend money on.

      • Running the numbers…
        Ok, so using the most recent labor stats available for TX, a quarter million jobs is roughly 2% of our current workforce of 12 million and change.

        In other words, it would take unemployment from under the national average (8.2% now, national was 9.4% in December) to above the national average (10.2%).  Go Texas!

        TX labor stats from: http://data.bls.gov/PDQ/servle

  2. Negotiating positions
    The rainy day fund is going to be tapped — it's insane not to — but don't expect any GOP leaders to say so for at least a month. Conservatives want to cut programs for their own sake, and not just to balance the budget. As long as the rainy day fund seems to be off the table, they can apply a lot more pressure to cut, cut, and cut some more.

    In the mean time, school districts across the state are in panic mode as they realize that state funding for education is dropping dramatically.  Parents are starting to scream “don't close our schools” to school boards. School boards are starting to scream “don't make us close our schools” to the lege, and “don't blame us — blame the lege” to parents. When those screams get loud enough, the lege will realize that it can't just cut its way out of the crisis.

    In the end, we'll reach a “compromise” plan that makes $10B-$15B in really awful cuts in exchange for a few revenue increases that they manage not to call tax hikes, and most of the rainy day fund.  Education and health care will take big hits, but the story line will be “whew — it could have been worse”.  

    • Nothing else is more realistic
      This sounds right to me.  In fact, I would be surprised if it didn't happen.  The only real question is: will the Republicans take any kind of political hit for flip flopping on the rainy day fund?  

    • Solution?
      A state income tax would simply provide more money for the legislature to waste. The Democrats, what few are left in the legislature, need to accept reality. But then so do the Republicans who need to take a look at the “tax incentives” to business aka “buddies” that have cost quite a bit a tax revenue without really impacting the relative employment figures as I understand it. Not that I understand it.  What I do understand is that the taxpayers keep sending messages to both parties. And both parties keep taxing and wasting the taxpayers' money while blaming the other party for the waste. As for the deficit, part of it is the cost of illegal immigration which both parties used as a politcial platform but in reality never really addressed until the bill arrived and they realized at some point they wouldn't be able to pay the bill. Cheap labor isn't really so cheap.

      Being politically correct is fine. Bankrupting the taxpayers in order to be politically correct is not.  

      • Tell the truth
        Let's all be honest: the Republicans have been in charge for years. There is no “both parties keep taxing and wasting taxpayers' money” in the state lege, it's been REPUBLICANS wasting the money and cutting services since 2003.

        Your hyperbolic rhetoric of “bankrupting the taxpayers” really would do better to describe “bankrupting the state of Texas”, because that's exactly what these tax cuts over the years and the political golden calf of not raising taxes has gotten us in Texas. I put a little blame on Democrats for not buckling down and pushing revenue increases through last legislature (of course, they still were in the minority, but might have been able to get it through), but now it's completely the Republicans' responsibility, so I'll sit back and weep that our state will have dramatically less services that will make us even more unattractive as a state to actually live in.

        Maybe we can outsource all our businesses to Texas and move to a state where its legislature actually cares about the people within it instead of business interests.

    • Indeed It Is Well Past Time
      Unfortunately it will not be considered as it does not fit the regressive tax structures supported by the corporatist agenda. Instead watch for more cuts, property taxes and fees. Also, more of the flippant rhetoric.

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