Sunday, January 09, 2011

Details of Texas' budget challenge about to emerge

Very notable statement made by Rev. Smith:

A budget is a moral document," the Rev. T. Randall Smith, a member of Texas Forward, said at a news conference last week. "As such, it reveals our values for the common good of all our citizens, not just those who are able to afford full-time, paid lobbyists or who contribute to political campaigns.

With regards to education, already the state is unveiling expenses that will have to be shouldered by districts. Please also check out the previous post and video.


Unprecedented spending cuts will be required to address shortfall without new taxes.

Saturday, Jan. 8, 2011

State leaders can't dodge Texas' budget crisis any longer.

Amid the election year barnstorming, projections of a budget shortfall now topping $24 billion were often downplayed, dismissed or glossed over with platitudes.

But the true magnitude of the problem will begin to take shape Monday, when Comptroller Susan Combs releases the long-awaited estimate of how much money Texas will collect during the 2012-13 budget years.

That estimate dictates how much lawmakers will have in the general operating budget to spend on education, prisons, health and human services and a slew of other state functions.

Budget-watchers expect the state will bring in far less in taxes and fees than the $87 billion that covers the current general operating budget, never mind the $99 billion that agencies say is needed to maintain state programs and services at their present level. Lawmakers have vowed to balance the budget without raising taxes.

They are also leaving untouched the $9 billion rainy day fund, at least at this early stage, since there is no guarantee that any of that money will be available for use. Assembling the necessary votes to tap the fund might be tough given the surge of legislators who ran campaigns advocating shrinking government.

So the upshot could be a level of cutting unprecedented in several decades at least, said Eva DeLuna Castro , a budget analyst with the Center for Public Policy Priorities, which advocates for low-income Texans.

Indeed, the most optimistic estimate of today's budget shortfall — $13 billion — would demand reductions amounting to 15 percent of the current operating budget. In 2003, a year lawmakers that hold up as a model for today's challenge, spending trims came to less than 2 percent of the general operating budget, DeLuna said .

Texans will have to wait several days, until the two-year spending bills are unveiled, to see the tangible effects of the no-new-taxes promise. The budget-writing chairmen in both the House and Senate are crafting the base bills to match Combs' estimate.

Some say the resulting cuts will produce a slim and trim state government with fewer state agencies, fewer state workers, only essential services. It is an opportunity to be smarter with the taxpayers' dollars, they say.

"This could go down as one of our finest hours," said Michael Quinn Sullivan, president of Texans for Fiscal Responsibility.

Others argue that the draconian spending reductions will leave Texas — and Texans — starving and weak.

Public school classrooms will be teeming with more students and fewer teachers, college tuition will rise just as financial aid plummets, and the state's most vulnerable disabled residents will be warehoused in state institutions, according to Texas Forward , a coalition of social service, education and labor groups calling for fewer cuts.

"A budget is a moral document," the Rev. T. Randall Smith, a member of Texas Forward, said at a news conference last week. "As such, it reveals our values for the common good of all our citizens, not just those who are able to afford full-time, paid lobbyists or who contribute to political campaigns."

Losing balance

The state's fiscal woes have certainly been exacerbated by the recent recession, which contributed to an anticipated deficit of $4 billion or more in the current budget.

But the balance between state revenue and expenses was knocked out of whack long before the onset of the recession.

In 2006, the Legislature reduced local school property taxes after a Texas Supreme Court decision that the school finance system was unconstitutional. The revamped business tax intended to pay for much of that cut failed to live up to expectations and has left a big hole that needs to be filled each budget.

Despite political rhetoric to the contrary, Texas also relied heavily on federal economic stimulus money in 2009 to pay for ongoing expenses such as state aid to school districts. That one-time money needs to be replaced with state dollars.

The combined effects of the recession, the deficit and the use of stimulus money account for an estimated $15 billion of the projected $24 billion shortfall.

The remaining $9 billion of the shortfall is largely attributed to the impact of inflation and population growth on public schools, colleges, and health and human services.

Daunting gap

In anticipation of the upcoming budget challenges, state leaders have called for a series of cuts to the current budget that will produce less than $2 billion in savings. Agencies were also instructed to propose how to cut 10 percent from each of their budgets, which if fully implemented, would yield another $3 billion.

That still leaves a long way to go to close the gap.

For most lawmakers as well as the public, the initial budget bill will be the first glimpse at how state leaders propose to address that hole.
The budget-writing so far has involved a select group of lawmakers and staff members, allowing only dribs and drabs to emerge.
That closed-door approach frustrates state Sen. Kirk Watson, D-Austin, who has been pushing for Combs and other state leaders to provide more detail on the state's budget condition.

"There are a lot of smart people that get elected to public office, and if you made this where it was more public and not just a few insiders who knew what was going on with the budget, who knows what good ideas might come out," Watson said.
Sullivan, too, said that Texas would benefit from tapping the creativity of a bigger pool of people who are not beholden to the status quo.

Dale Craymer , president of the Texas Taxpayers and Research Association, said there will be plenty of opportunities for other voices to be heard over the next five months or so. Approving the budget is the only thing legislators are required to do and they typically take the full session to complete the complex legislation.
"What they are laying out is a starting point and not an ending point," Craymer said.
That starting point might look scary to many people.

"It is a statement of reality," Craymer said. "This is the way things are."

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