|Impact By School District |
- Public Education Analysis
- Higher Education Analysis
- Health and Human Services Analysis
- Medicaid Spending Losses Analysis
The state is short $27 billion, more than one-quarter of the state’s discretionary budget, of which about 91 percent is consumed by public schools, higher education, and health and human services.
Texas already spends less per capita than almost any other state, but Senate Finance Chair Steve Ogden -- a Republican who Rick Perry has described as the smartest budget man he knows, and someone he implicitly trusts with the budget -- warned today the proposed budge cuts will “decimate public education."Texas Republicans would rather put our children's future at risk than allow corporations to pay their fair share to help build the well educated workforce Texas businesses need to prosper in the future.
Texas Observer: Gov. Rick Perry has repeatedly said Texas’ deficit is “reflective of the national recession’s lingering impact on state revenue.”
In fact, the recession has little to do with the $27 billion budget shortfall. Back in 2006 the Republican controlled Legislature concocted a Rube Goldberg-style [school funding and business tax reform] measure that simultaneously cut property taxes, implemented a new “margins” tax on business and rejiggered the way public schools are financed.Star-Telegram: A 68-page report released by Texas Comptroller Susan Combs on Monday reveals that Texas will give business $32.2 billion worth of tax exemptions for sales, franchise, and gasoline and motor vehicle sales taxes for the 2011 fiscal year that ends on Aug. 31, 2011.Problem was, as the state Legislative Budget Board pointed out at the time, the plan’s math didn’t wash because the margins tax wouldn’t bring in as much as the Legislature thought. In fact, the board said, it would leave a $5 billion hole in the state budget every year.
The upshot: Perry, who pushed the swap, knew full well he was helping to create today’s “crisis.”
Exemptions to the state sales tax, the state's biggest source of revenue, will total $30.8 billion for the current fiscal year, Combs said, although some items exempted from the sales tax are taxed from other sources. Gasoline tax exemptions will amount to $113 million. Motor vehicle sales tax exemptions will total $125 million.NYTimes OpEd "Leaving Children Behind" by Paul Krugman:
"While sales and use tax collections totaled $19.6 billion in fiscal 2010," Combs said, "the tax is limited in scope when compared with the total number and kind of transactions in the economy, because of various exemptions and exclusions," Combs said.
A number of lawmakers are calling for the elimination of at least some exemptions to boost revenue and help offset deep service reductions proposed in preliminary draft budgets. Others say canceling the breaks amounts to a tax increase, which Gov. Rick Perry and Republican legislative leaders have vowed to oppose.
Read more at the Star-Telegram
Consider, as a case in point, what’s happening in Texas, which more and more seems to be where America’s political future happens first.
Texas likes to portray itself as a model of small government, and indeed it is. Taxes are low, at least if you’re in the upper part of the income distribution (taxes on the bottom 40 percent of the population are actually above the national average). Government spending is also low. And to be fair, low taxes may be one reason for the state’s rapid population growth, although low housing prices are surely much more important.
But here’s the thing: While low spending may sound good in the abstract, what it amounts to in practice is low spending on children, who account directly or indirectly for a large part of government outlays at the state and local level.
And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average.
But wait — how can graduation rates be so low when Texas had that education miracle back when former President Bush was governor? Well, a couple of years into his presidency the truth about that miracle came out: Texas school administrators achieved low reported dropout rates the old-fashioned way — they, ahem, got the numbers wrong.
It’s not a pretty picture; compassion aside, you have to wonder — and many business people in Texas do — how the state can prosper in the long run with a future work force blighted by childhood poverty, poor health and lack of education.
But things are about to get much worse.
A few months ago another Texas miracle went the way of that education miracle of the 1990s. For months, Gov. Rick Perry had boasted that his “tough conservative decisions” had kept the budget in surplus while allowing the state to weather the recession unscathed. But after Mr. Perry’s re-election, reality intruded — funny how that happens — and the state is now scrambling to close a huge budget gap. (By the way, given the current efforts to blame public-sector unions for state fiscal problems, it’s worth noting that the mess in Texas was achieved with an overwhelmingly nonunion work force.)
So how will that gap be closed? Given the already dire condition of Texas children, you might have expected the state’s leaders to focus the pain elsewhere. In particular, you might have expected high-income Texans, who pay much less in state and local taxes than the national average, to be asked to bear at least some of the burden.
But you’d be wrong. Tax increases have been ruled out of consideration; the gap will be closed solely through spending cuts. Medicaid, a program that is crucial to many of the state’s children, will take the biggest hit, with the Legislature proposing a funding cut of no less than 29 percent, including a reduction in the state’s already low payments to providers — raising fears that doctors will start refusing to see Medicaid patients. And education will also face steep cuts, with school administrators talking about as many as 100,000 layoffs.
The really striking thing about all this isn’t the cruelty — at this point you expect that — but the shortsightedness. What’s supposed to happen when today’s neglected children become tomorrow’s work force?
Anyway, the next time some self-proclaimed deficit hawk tells you how much he worries about the debt we’re leaving our children, remember what’s happening in Texas, a state whose slogan right now might as well be “Lose the future.”