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As Texas Blows

 
 
Reply Fri 7 Jan, 2011 08:53 pm
---so blows the nation.
Paul Krugman

Wasn’t Texas supposed to be thriving even as the rest of America suffered? Didn’t its governor declare, during his re-election campaign, that “we have billions in surplus”? Yes, it was, and yes, he did. But reality has now intruded, in the form of a deficit expected to run as high as $25 billion over the next two years.

And that reality has implications for the nation as a whole. For Texas is where the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting wasteful spending — has been implemented most completely. If the theory can’t make it there, it can’t make it anywhere.

How bad is the Texas deficit? Comparing budget crises among states is tricky, for technical reasons. Still, data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York’s, about as bad as California’s, but not quite up to New Jersey levels.

The point, however, is that just the other day Texas was being touted as a role model (and still is by commentators who haven’t been keeping up with the news). It was the state the recession supposedly passed by, thanks to its low taxes and business-friendly policies. Its governor boasted that its budget was in good shape thanks to his “tough conservative decisions.”

Oh, and at a time when there’s a full-court press on to demonize public-sector unions as the source of all our woes, Texas is nearly demon-free: less than 20 percent of public-sector workers there are covered by union contracts, compared with almost 75 percent in New York.

So what happened to the “Texas miracle” many people were talking about even a few months ago?

Part of the answer is that reports of a recession-proof state were greatly exaggerated. It’s true that Texas job losses haven’t been as severe as those in the nation as a whole since the recession began in 2007. But Texas has a rapidly growing population — largely, suggests Harvard’s Edward Glaeser, because its liberal land-use and zoning policies have kept housing cheap. There’s nothing wrong with that; but given that rising population, Texas needs to create jobs more rapidly than the rest of the country just to keep up with a growing work force.

And when you look at unemployment, Texas doesn’t seem particularly special: its unemployment rate is below the national average, thanks in part to high oil prices, but it’s about the same as the unemployment rate in New York or Massachusetts.

What about the budget? The truth is that the Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances in the face of a serious “structural” budget deficit — that is, a deficit that persists even when the economy is doing well. When the recession struck, hitting revenue in Texas just as it did everywhere else, that illusion was bound to collapse.

The only thing that let Gov. Rick Perry get away, temporarily, with claims of a surplus was the fact that Texas enacts budgets only once every two years, and the last budget was put in place before the depth of the economic downturn was clear. Now the next budget must be passed — and Texas may have a $25 billion hole to fill. Now what?

Given the complete dominance of conservative ideology in Texas politics, tax increases are out of the question. So it has to be spending cuts.

Yet Mr. Perry wasn’t lying about those “tough conservative decisions”: Texas has indeed taken a hard, you might say brutal, line toward its most vulnerable citizens. Among the states, Texas ranks near the bottom in education spending per pupil, while leading the nation in the percentage of residents without health insurance. It’s hard to imagine what will happen if the state tries to eliminate its huge deficit purely through further cuts.

I don’t know how the mess in Texas will end up being resolved. But the signs don’t look good, either for the state or for the nation.

Right now, triumphant conservatives in Washington are declaring that they can cut taxes and still balance the budget by slashing spending. Yet they haven’t been able to do that even in Texas, which is willing both to impose great pain (by its stinginess on health care) and to shortchange the future (by neglecting education). How are they supposed to pull it off nationally, especially when the incoming Republicans have declared Medicare, Social Security and defense off limits?

People used to say that the future happens first in California, but these days what happens in Texas is probably a better omen. And what we’re seeing right now is a future that doesn’t work.

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Type: Discussion • Score: 10 • Views: 5,936 • Replies: 70
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edgarblythe
 
  1  
Reply Fri 7 Jan, 2011 09:34 pm
As long as we have high school football with no new taxes - - -
Its gonna be all right.
0 Replies
 
edgarblythe
 
  1  
Reply Sat 8 Jan, 2011 10:58 am
Now, Gov. Perry and others are flogging a snark-tastic piece penned by National Review Online writer Kevin Williamson. In attempting to debunk Krugman and "the usual liberal snots," Williamson pretends to know a lot about Texas but makes some major factual blunders. Here's a big one:

Texas doesn’t do shortfalls. Texas starts from scratch: Every year is basically Year Zero when it comes to the state budget — there is no assumption that next year’s funding will match or exceed this year’s, and the state’s constitution explicitly forbids any legislature to tie the hands of a subsequent legislature, financially or otherwise.

That's just wrong and Perry, who's retweeting this piece, knows it. It is not true that Texas starts from zero every year. Like most states, Texas starts with last year's budget and works from there. In fact, for this coming budget cycle, Gov. Perry asked state agencies to start from last year's appropriations and cut 10 percent. The only time in recent memory that the Texas governor has had a "Year-Zero" approach was in 2003. That is the exception, not the rule. It is also totally unexceptional that Texas' constitution requires a balanced budget. Every state, except Vermont, requires that its budget be balanced.

But where Williamson totally falls flat on his face is where he claims that Texas' budget shortfall is far less than $25 billion. He writes:

And it may not be all that hard: Pace Krugman et al., Texas’s potential shortfall probably is not $25 billion. The inside guys talk about $11 billion to $15 billion, spread out over a two-year budget. (Texas writes one budget every two years, and has a legislature that meets every two years.) Even the liberal bedwetters over at the Center for Budget and Policy Priorities expect the budget hole to amount to about 10 percent of the whole enchilada, as compared to more than 50 percent in basketcase California.

Wrong, wrong and really wrong.

First, wrong because we don't know exactly how much our budget shortfall for the coming biennium will be; we'll find out on Monday when the Texas Comptroller releases the revenue estimates. Nor do we have any idea who these "inside guys" are or where their out-of-the-blue numbers come from. But that's not the real problem with Williamson's Pollyannaish predicitons. Citing the "liberal bedwetters" at CBPP, he claims that Texas' budget shortfall is only "about 10 percent of the whole enchilada." But the chart that Williamson is relying on is for fiscal year 2010, not the 2011-2012 budget cycle that Krugman's writing about.



That means Williamson is a day late and billions of dollars short in his analysis—the one Gov. Perry is circulating around the state to "rebut" Krugman. In reality, the budget shortfall is likely to be closer to 25 percent, one-quarter, of Texas' discretionary budget. Last biennium, the total general revenue budget was $87 billion. Adjusting for increases in the cost of services, mostly medical care, general revenue this time around – that is, assuming the Legislature wants to maintain current levels of service, not exactly a given in this political climate – will probably be around $100 billion, according to Dick Lavine with "liberal-bedwetter" group CPPP. If the shortfall is $25 billion, that means the Legislature will have to eviscerate one-quarter of the discretionary spending, the vast majority of which goes to public schools, higher education and health and human services.

Williamson may not care about the consequences of slicing deep into the bone of the state budget – actually, he seems to salivate at the opportunity – but at least be honest with your numbers. Perry and Williamson are entitled to not care about the suffering their no-taxes-at-any-cost orthodoxy will cause, but they are not entitled to their own facts.

http://www.texasobserver.org/forrestforthetrees/krugman-gets-it-right-on-texas-budget-crisis
0 Replies
 
edgarblythe
 
  1  
Reply Wed 19 Jan, 2011 05:23 am
By APRIL CASTRO, Associated Press Writer April Castro, Associated Press Writer – 2 hrs 13 mins ago
AUSTIN, Texas – Public education in Texas is facing billions in proposed budget cuts that would include slashing arts education, pre-kindergarten programs and teacher incentive pay as lawmakers take on a massive deficit with the promise of no new taxes.

Lawmakers got their first glimpse of what the next state budget might look like late Tuesday, including the $5 billion cut to public schools, as Republican Gov. Rick Perry and his supporters were dancing at an inaugural celebration.

Texas is facing a $15 billion revenue shortfall, and few corners of state government were spared in the draft proposal for the next two years. The Texas Constitution requires a balanced budget, and Republican leaders have vowed not to raise taxes.

But the budget does propose millions of dollars in new fees. For instance, state employees and retirees who smoke would pay a $30-a-month "tobacco user monthly premium surcharge" and the attorney general's office would charge an "annual child support service fee," a "monthly child support processing fee" and an "electronic filing of documents fee."

The budget draft, which is expected to be filed as legislation in the House later this week, would spend $73.2 billion in state money and $156.4 billion in all funds for the 2012-13 budget period.

It would shutter four community colleges and generally eliminate financial aid for incoming freshmen and new students. The Texas Grants scholarship program would drop by more than 70,000 students over the next two years.The proposal also would reduce reimbursement rates by 10 percent for physicians, hospitals and nursing homes that participate in Medicaid — a decrease that could eventually dry up participation in the health care program for poor and disabled Texans. In all, $2.3 billion would be cut from Medicaid, the Children's Health Insurance Program and other health and human services.The plan would eliminate 9,600 state jobs over the next two years, including more than 1,500 j in the prison system. The Department of Criminal Justice faces $459 million in cuts, including a 14 percent reduction in psychiatric and pharmacy care for inmates.

`'It's a catastrophe. No financial aid for kids to go to college. No pre-kindergarten for kids to learn their numbers and their letters. Health and human services slashed," said Rep. Pete Gallego, D-Alpine. `'No Texan can be proud of this."

The Legislative Budget Board was required by law to release the budget to leaders Tuesday, the fifth business day after the session starts. The draft is just the beginning of a long process, which probably won't be finalized until next summer when the governor signs the Texas budget for 2012-13.

Perry took the oath of office earlier Tuesday for his third term. After a day of parties, he spent the evening at a celebration in downtown Austin, just a mile from the Capitol. The inaugural was paid for by donors.

Some analysts say the true shortfall could be much higher than $15 billion — closer to $27 billion — to account for enrollment growth in public schools and on Medicaid rolls, cost increases and other variables. That figure amounts to almost a third of discretionary state spending in the current budget.

The proposal would make public school finance reform legislation almost inevitable. It also would mean about 100,000 children would no longer have access to pre-kindergarten, schools won't get help building new science labs and would end a program that helps students earn promotion to the next grade.

The plan would slash $772 million for Texas colleges and universities, including nearly $100 for flagship universities Texas A&M University and the University of Texas at Austin. The two-year colleges that would be closed are Brazosport College in Lake Jackson, Frank Phillips College in Borger, Odessa College and Ranger College.

The state's contributions to the state employee retirement fund would be reduced from 6.95 percent to 6 percent, less than what is needed to maintain the fund, according the Legislative Budget Board. The base budget proposes a similar cut in contributions to the Teacher Retirement Fund.

While almost every other state agency would see a reduction in employees, the average number of full-time employees in Perry's office over the next two fiscal years would go to 132 from an average of 120.

The base budget does not use money from the state's Rainy Day Fund, expected to have a balance of $9.4 billion at the end of the next biennium.

"Texas needs a balanced approach that includes using the Rainy Day Fund and adding new revenue," said Scott McCown, executive director of the Center for Public Policy Priorities, which advocates for needy Texans. "With a revenue shortfall this large, as the proposed budget shows, the Legislature cannot balance the budget through cuts alone without doing terrible damage."

Rep. Jim Pitts, the chairman of the House Appropriations Committee, said he would explain the proposal to the chamber on Wednesday.

"There are no sacred cows for this next biennium for our introduced bill," Pitts said last week. "So many people said, 'You cannot cut education'. You can't not cut education . . . We will be cutting every article within our budget. We will be cutting health and human, we will be cutting education and we'll be cutting our own budget in the Legislature
0 Replies
 
33export
 
  1  
Reply Wed 19 Jan, 2011 07:38 am
On a clear calm night, you can hear Texas rust....
edgarblythe
 
  1  
Reply Wed 19 Jan, 2011 01:21 pm
@33export,
I bet you're not from Texas.
edgarblythe
 
  1  
Reply Wed 19 Jan, 2011 01:41 pm
@edgarblythe,
THen again, you just could be.
33export
 
  1  
Reply Fri 21 Jan, 2011 07:50 am
@edgarblythe,
Just long enough to read the bumper stickers,Eddie. Had plenty of that while stuck on I35.
chai2
 
  1  
Reply Fri 21 Jan, 2011 09:35 am
@33export,
keep in mind 33export, Texas is a very big place, and you'll find a lot of diversity in livestyle between Houston and El Paso, Dallas and Brownsville, Austin and just about anywhere else in the state.

I sometimes listen to the radio program "Wait, Wait, Don't Tell Me", a political humor show on NPR.
The panel was airing from the Capitol steps in Austin a few months back, and I had to laugh at the comment "We're here in Austin, and we can see surrounding us, in the far distance, Texas"
0 Replies
 
edgarblythe
 
  1  
Reply Fri 21 Jan, 2011 05:58 pm
No new taxes, no existing tax increases, no using the Rainy Day fund, but every state fee that you can think of -- and many you haven't -- is going up. No more sales tax holidays. Traffic violation fees to the state increase 50%. Vehicle license fees, vehicle registration fees, vehicle inspection fees, driver license renewal fees, hunting and fishing license fees, state park admission fees ... on and on.
0 Replies
 
djjd62
 
  1  
Reply Fri 21 Jan, 2011 06:05 pm
every time i see this topic, i think of this
http://static.musictoday.com/store/bands/1778/product_large/4YCD03.JPG
edgarblythe
 
  1  
Reply Fri 21 Jan, 2011 07:20 pm
@djjd62,
djjd62 wrote:

every time i see this topic, i think of this
http://static.musictoday.com/store/bands/1778/product_large/4YCD03.JPG

Okay - But what the hell does it mean? Razz
neko nomad
 
  1  
Reply Sat 22 Jan, 2011 08:03 am
@edgarblythe,
Just a guess here, but It looks as though the Wichita lineman's gonna
try his luck in San Antone, but he can't afford a bus ticket.
0 Replies
 
edgarblythe
 
  2  
Reply Sat 22 Jan, 2011 07:41 pm
AUSTIN, Texas – Conservative lawmakers who dominate Texas politics make their political careers on promising to cut state spending and block new taxes. But when the budget slashing is done, city and county officials must pick up the pieces — and possibly raise taxes.

State legislatures across the country are facing budget problems brought on by the economic recession. California, Illinois and Georgia face shortfalls just as bad as Texas, but they plan to raise taxes to avoid dramatic cuts. The Texas governor, lieutenant governor and House speaker — all Republicans — have promised to make the state live within its means without new taxes.

When the legislature released the first draft of the new budget this week, the proposed cuts were staggering. All told, if lawmakers want to avoid raising taxes, they need to cut $27 billion from what it would cost to maintain the current level of state services.

Texas lawmakers from both parties have always been fiscally conservative, explained Sherri Greenberg, interim director of the Center for Politics and Governance at the LBJ School for Public Affairs in Austin. Texas spends less per person on state services than any other state, and the Texas Constitution forbids a personal income tax.

"It's one thing to say `no new taxes,' however, that doesn't mean there won't be all kinds of fees increased," Greenberg said. "Things are just pushed down to the local level."

Cuts set off a domino effect: Historically, public schools raise property taxes when the state education agency sends smaller checks. Cities and counties have to pick up the bill when the sick go to the emergency room because fewer doctors accept Medicaid. And when the mentally ill don't receive treatment, local law enforcement often steps in.

Texans pay for these services in one of two ways. Local authorities collect property taxes, and 64 percent of the state budget comes from sales taxes. Less spending during the recession has meant reduced state revenues. The state also collects a business tax, but that has never produced as much revenue as lawmakers predicted, Greenberg said.

The draft budget assumes no new taxes and over the next two years takes $9.8 billion away from schools and could cost 100,000 school district jobs, according to Moak, Casey & Associates, a school finance consulting firm that analyzed the budget. This at a time when Texas schools is projected to add 160,000 new students, according to census figures. The Houston Independent School District alone could lose $348 million in financing, something that could result in teacher layoffs.

"You could take to your voters a tax increase . but in this economy it's tough to even think about that," said Melinda Garrett, the chief financial officer for Houston schools. "We are 80 percent people, so you can't cut the budget without cutting people."

Some schools are already charging the maximum rate allowed without voter approval, but the Houston school board can still raise taxes 3 cents per $100 of real estate without a referendum. That is one option Garrett will present to the board — along with proposed cuts — once the state budget is finalized and becomes law in May.

Hospitals and doctors will likely absorb the $2.8 billion the state plans to cut from Medicaid programs. The state is considering reducing what it pays doctors and hospitals to treat Medicaid patients by 10 percent. Based on past cuts in Medicaid fees, the result will be fewer doctors accepting Medicaid patients and more people relying on emergency rooms when they fall ill. Hospitals cannot turn away emergency patients.

Parkland Health and Hospital System is one of the largest public hospitals in Texas, treating more than 93,000 low-income patients who depend on the program each year. Ron Anderson, the CEO, said state cuts in health care merely shift the costs to counties and hospital districts, which rely on local property taxes. Parkland relies on medical school faculty and students to provide services, so cuts to the higher education budget will compound the cuts to the health budget, costing millions in local taxes.

"Sometimes you think you're saving money with one budget, but your actually transferring the costs to somebody else and the costs might actually be higher," Anderson said. "The taxpayers who pay these bills are actually the same taxpayers."

Texas ranks 49th in the nation in per capita spending on mental health programs, and the draft budget would cut spending by 40 percent. When mentally ill people can't get the help they need, they often end up in jail or worse, said Harris County Sheriff Adrian Garcia.

"Officers and the mentally ill will be having confrontations that will result in arrests, tazings and, regretfully, even shootings," Garcia said. "That should not be the way that families or individuals resolve their mental health issues, but that's generally how it works because there is a lack of service."

Garcia and other sheriffs across the state have repeatedly asked the legislature to increase spending on mental health programs to divert people away from jail and into treatment programs. About 25 percent of the inmates in the Harris County Jail already require psychological treatment and psychotropic drugs, costing the county $27 million a year. Many more would qualify for other treatments, he said. Now the Texas Sheriff's Association just wants the state to maintain the current funding.

"We have been working hard to control spending in the sheriff's office, but when these folks come into my custody, I have no option, I am constitutionally obligated to provide them with the care they need," Garcia said. And funding for that treatment comes from county property taxes, he said.

The draft budget introduced on Wednesday is only a start to the budget process, and the final budget will look much different. But as debate begins, local authorities will be visiting state lawmakers to try to protect their piece of the budget.

0 Replies
 
edgarblythe
 
  1  
Reply Sun 23 Jan, 2011 10:32 am
@djjd62,
Ah. A clue.



0 Replies
 
edgarblythe
 
  1  
Reply Sun 23 Jan, 2011 02:09 pm
Less than thirty minutes ago, my wife saw a man with a sign on the side of the road. He was well groomed and nicely dress. The sign begged for gas money for him to go to work. It told that he has a wife, three children and a mortgage.
InfraBlue
 
  1  
Reply Thu 27 Jan, 2011 05:04 pm
Since Texas doesn't have an income tax, what taxes are these lawmakers referring to when they say they'll block new taxes? The sales tax?
edgarblythe
 
  1  
Reply Thu 27 Jan, 2011 05:06 pm
@InfraBlue,
Property tax, I think school tax - There are quite a few if one starts ticking them off, I am sure.
InfraBlue
 
  1  
Reply Fri 28 Jan, 2011 05:55 pm
@edgarblythe,
Hmm, but property taxes--the major portion of which are school district taxes--are imposed locally, on a city/county level. That's why the news article you posted stated that:

Quote:
Conservative lawmakers who dominate Texas politics make their political careers on promising to cut state spending and block new taxes. But when the budget slashing is done, city and county officials must pick up the pieces — and possibly raise taxes.


The taxes to which it refers are property taxes.

Here in the a-hole o' property taxes for 2010 are due on Monday. How about in Houston?
0 Replies
 
edgarblythe
 
  1  
Reply Fri 28 Jan, 2011 06:03 pm
That's why I did not carry on a great deal about which taxes they control. I get mixed up between state and local issues.
 

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