TX House Budget Proposal Slashes $9.8 Billion From Education

More about the proposed budget: Dallas Morning News Fort Worth Star-Telegram Houston Chronicle San Antonio Express Austin American-Statesman

TEXAS HOUSE RELEASES PROPOSED BUDGET WITH NO NEW TAXES AND WITHOUT TAPPING THE RAINY DAY FUND.

The state comptroller has calculated that a continuation of state services at current levels of would result in a $27 billion budget shortfall.

About $7 billion in federal government stimulus funds could reduce that budget shortfall to about $20 billion. The state could then use its $9.4 billion "rainy day fund" to lower the budget deficit to about $11 billion. Broadening the sales tax base slightly could eliminate most of that remaining $11 billion shortfall, without any further tax increase. This strategy would maintain the current level of state services.

Republicans, however, are sticking with their new new taxes and no federal stimulus money pledges, and then some. The Legislative Budget Board sent a proposed budget to House members Tuesday night that cuts $31.1 billion from current spending.

In education the proposed budget slashes public school funding, cuts at least 60,000 college students from financial aid, closes at least four community colleges and likely raise college tuition fees. College education has already been priced out of the reach of many working and middle class students and the high tuition fees will price even more young Texans out of a higher education.

The proposed budget drafted by the Legislative Budget Board will slash an additional $9.8 billion from public school funding, while the student population is projected to grow by at least 80,000 students each year. Further, an estimated 109,000 children will be cut from Pre-Kindergarten early start programs and 83,000 children will be cut from the Early Childhood School Ready program. Under current funding levels, Texas ranks 44th nationally in education funding per pupil, is last in the percentage of adults obtaining a high school diploma with a school dropout rate of 30 percent.

In the Medicaid program, the proposed budget slashes overall spending by nearly 30 percent, cut services for adults that federal law doesn’t require states to offer and cut 10 percent, in addition to last spring’s 1 percent cut, from reimbursements to doctors, dentists, hospitals and nursing homes. The proposed budget also cut Nursing Facility payments by $1.57 billion dollars, which will have a tremendous impact on residents in Texas’ nursing homes.

In public safety and corrections programs, the proposed budget closes a correctional facility in Sugar Land, three Texas Youth Commission correctional facility and 2,000 private prison beds, a move that could close at least two additional correctional facilities and cut 1,562 prison jobs. Probation programs would see funding cut by 20 percent, parole supervision would be cut by almost 9 percent, and the construction and public safety and correctional facility maintenance funding will be cut by 83 percent, along with 90 jobs. And, the Victims Services Division would be eliminated.

The proposed budget does not cut any of the state's corporate welfare programs. Many claim the corporate welfare programs, advertised as “business incentives to create jobs," throw wads of taxpayer cash to Republican campaign donors, who actually deliver few jobs.

State Senator Wendy Davis (D-10 Fort Worth)

State Senator Wendy Davis (D-10 Fort Worth) said late Tuesday night, after the budget draft was delivered, that the budget draft by the Legislative Budget Board released earlier was wrong for Texas. Full Article at Capitol Annex:

Senator Wendy Davis said the first draft of Texas’ 2012-13 budget is wrong for Texas.

The Legislative Budget Board’s 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 –state-funded 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.”

Under current funding levels, Texas is already near the bottom in education funding per pupil (Texas ranks 44th nationally), is last nationally in the percentage of adults with a high school diploma, and is among the bottom in high school completion rates across the country.

“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 under-performing business franchise tax, will push the current biennial shortfall in public education funding of about $7 billion into future budgets indefinitely.

”We have to have an honest and transparent conversation about the education funding shortfall, which is cheating our schoolchildren while simultaneously overburdening small and medium sized businesses in Texas,” Davis said.

Davis said that as cuts are proposed to strip critical services to educate our children and to address some of the state’s most vulnerable, lawmakers should do what they can to lessen that burden in other ways.

Protecting Texans’ pocketbooks through lowering homeowners insurance rates, lowering residential electricity rates and by establishing fair rules to prevent the devastating impacts of predatory lending should also be considered, Davis said.

Regardless of the bleak budget picture, Davis called on fellow lawmakers to work to positively change course for future Texas families and to address other issues that will have a very real impact on their household finances and their quality of life.

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.

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