Tuesday, January 18, 2011

Lt Gov. Dewhurst: 8,000 State Jobs Could Be Cut On $27 Billion Deficit

Ben Philpott of KUT News and the Tribune reports
thousands of jobs cuts due to the looming $27 billion
Texas state budget deficit.
With some top state leaders warning that Texas' dire fiscal situation will lead to the loss of several thousand state jobs, House budget writers will release their first draft budget today. Some state leaders have begun to warn that the state’s dire fiscal situation will lead to the loss of several thousand state jobs.

House Appropriations Chair Jim Pitts didn’t pull any punches when it came to his assessment of job losses. He spoke last week with Evan Smith of the Texas Tribune. “There will be less state employees when we’re completed with this budget process. Because we’re gonna have a whole lot less money to spend,” said Pitts.

Lieutenant Governor David Dewhurst went a step further and put a number to the cuts. He thinks about 8,000 state jobs could be eliminated. But there are thousands of other jobs dependent on state funds that fall outside of those projections. Cuts to Medicaid and Medicare provider reimbursement rates could lead to health care job losses. Teachers could also face layoffs.

Linda Bridges is president of the Texas chapter of the American Federation of Teachers. She says it won’t be clear how many education jobs would disappear until after legislative action and money begins to work its way back to the local school districts. From there, it will be up to school boards to figure out a way to make it work.

“Are they looking at eliminating positions through attrition?” asked Bridges. “Are they looking at eliminating programs? We just don’t have a handle on that yet. A lot of it’s speculation.”

And there’s still another especially hard jobs equation to still figure out. A recent report by state Comptroller Susan Combs suggests getting rid of the cap on elementary class size as a way to trim the budget.

“If you do that math on that it comes up to about 12,000 elementary school teachers could be laid off,” said Bridges.

Another thing to consider is these kinds of cuts don’t happen in a vacuum. Economist Ray Perryman says there’s the “multiplier effect”. He says public sector layoffs will have a multiplier effect of about two and a half.

“What that basically means is that in addition to the direct job that’s lost you have one and a half additional jobs in the economy that are lost,” said Perryman. “Because it impacts suppliers. It impacts – the payroll not there. It impacts spending on food, clothing, shelter other items that are made in the state.”

Republican budget writers haven’t said the cuts will be easy. But they have argued that making cuts is a better solution than raising taxes. Because they say increasing taxes slows the state’s economy by limiting private sector spending…which can also lead to layoffs. Perryman says cutting state jobs could even help bolster the economy.

“If it’s something the state’s doing that’s inefficient that they could effectively do with fewer people, then society is better off if we take that resource and use it somewhere else that’s more productive. Either the public sector somewhere else or the private sector,” said Perryman.

But this budget isn’t about reshuffling resources. Money cut from one state program won’t be going to pay for another. It will simply be cut.

No comments:

Post a Comment