Monday, January 10, 2011

Between A Rock And A Hard Place

Cross post from the West Texas Jobsanger blog
by Ted McLaughlin

The building pictured right is the capitol building of the State of Texas. It will once again be a bustling place starting on Tuesday, January 11th, when the legislature meets for its biennial session (unlike most other states, the Texas legislature only meets once every two years -- on the second Tuesday of each odd-numbered year).

This is also the week that the state's comptroller gives her official verdict on what the state's budget looks like for the next two years. And it is expected that the legislature will find themselves, as my grandmother used to say, between a rock and a hard place. The comptroller is expected to announce that the state will have a budget shortfall of between $21 and $25 billion dollars -- a huge deficit for a total budget of around $95 billion dollars.

Even knowing they would have a huge budget shortfall to face in this legislative session the Republicans campaigned on a platform of no new taxes. They promised voters that they could fix the deficit with cuts to government services alone -- cuts that would not damage the necessary services delivered by government. It was a promise that will be impossible to keep, but the voters fell for it and gave the Republicans huge majorities in both houses of the legislature.

To keep their promise the Republicans would have to cut all state agencies and other state outlays by about 26%. This is in addition to a couple of 10% cuts that have already been done and a 5% cut that is currently underway. It doesn't take a genius to figure out that there is no way the services delivered by the state's agencies can survive such a massive cut (on top of the cuts already done). Services will suffer, and in some cases may disappear altogether. In addition, the state's schools would be in serious trouble if the state contribution to education was cut by such a massive amount.

The three biggest items in the state budget are criminal justice (Department of Criminal Justice, Texas Youth Commission, Department of Public Safety, etc.), education (elementary & high schools, higher education, etc.) and human services (AFDC, Medicaid, Food Stamps, Child Protective Services, Adult Protective Services, etc.). Since these are the biggest items in the budget, then it makes sense that they would have to suffer the biggest cuts.

That's not going to be easy though. Cuts to criminal justice is not going to be popular with the public. It will mean thousands of criminals being dumped back into the communities with little or no supervision and no help to find jobs (which don't exist anyway) or programs to help with drug and alcohol problems (also severely cut by the state). A Republican legislature is not going to like the public uproar this will create.

Cuts to human services will also be hard to do. Cuts to programs partially funded by the federal government, like Medicaid or Food Stamps, would result in a loss of federal funds and put the state in an even bigger financial bind. And cuts to programs like Child or Adult Protective Services will just result in more children and elderly Texans being abused and mistreated (the kind of things guaranteed to make negative headlines and public outrage).

Education is even tougher. Texas already ranks near the bottom of all states in the amount of money it provides for education per pupil. And considering that the dropout rate is near 30% for Texas high schools, it would seem outrageous that cuts to education would be on the table for legislative consideration -- but they are. It would seem that tax cuts for wealthy Texans is more important than the education of Texas students.

Making matters even worse for the Republican legislature is the fact that although they were elected on a platform of not raising taxes, a new newspaper poll shows significant majorities of Texas citizens are opposed to cuts in education and human services. The survey, conducted by Blum & Weprin Associates for several newspapers, shows that 70% of the public opposes any cuts to education (high schools and elementary schools). Although 53% would allow cuts to higher education, only 11% would approve of large cuts even there.

And Texans are not much more responsive to cuts in human services. About 62% of Texans oppose cuts in health care to children or low-to-moderate-income families.

This definitely puts the legislature in a difficult predicament. Although elected on a promise not to raise taxes, the public definitely opposes significant cuts in the parts of the budget that contains the most spending. They can either make the public mad by raising taxes or make the public mad by cutting necessary and popular programs. And either way, the Republicans must shoulder the blame since they have the governor's office and huge majorities in both houses.

I suspect they will do a little of both -- cut the budget and raise taxes. But they will raise taxes in a sneaky way so they can have some deniability -- such as broadening the sales tax base to include items now exempt instead of raising the tax rate, and raising the fees for many services like driver's licenses, marriage licenses and hunting licenses. They will then claim they kept their word since a fee is not a tax. It's not true of course, but that's what they'll claim anyway. There's only one thing we can be sure of -- taxes and fees on corporations and the rich will not be raised. Texas has the most regressive taxes in the nation and that will stay the same.

This dog-and-pony show will start on Tuesday, and it should be interesting to see how the Republicans get themselves out of the mess they have created with their past actions. The only good thing is that this time they can't blame the Democrats for their own actions.


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