Texas' economic forecast calls for rain
By Royce West
We knew when we arrived in January that we faced a shortage in the state's budget in excess of $20 billion. And we knew that talk of raising or generating new funding sources would fall on ears rendered tone-deaf by the Tea Party's no new taxes roar. And now, we know that the repercussions of the budget passed by the 82nd Legislature will last long past the biennium.
The fact that we were thrust into a recently-ended special session is a direct result of how some of my colleagues felt about how we - as state lawmakers - will hand to local school districts a budget that is at least $4 billion short of what it will take to sustain existing funding levels and will result in the loss of thousands of jobs. Fact also is that somewhere during the latter part of FY13, school districts will run out of money if additional measures are not taken.
My Democratic colleagues made the decision during the regular session that they could not support a budget that for the first time since at least 1949, will not provide for the more than 70,000 new students who show up on Texas' schools doorsteps each year. It's also the first time in decades that a budget vote has been cast strictly along party lines.
There are 19 Republicans and 12 Democrats in the Texas Senate. The outcome of the November 2010 midterm elections, and a surprise defection or two, saw a super-majority of 101 Republicans cement control of the Texas House of Representatives. I often use former President Bill Clinton's saying that elections have consequences. And the consequences of the 2010 elections and the 2012-13 budget will resonate, and yes rain, on many Texans for years to come.
Understand this to mean that House Republicans can meet, form a quorum and pass bills as though Democrats do not exist. The only barrier to a resistance-free path to the governor's desk for legislation that is potentially harmful to our communities is the rule that requires a two-thirds vote to advance any piece of legislation to the Senate floor. One problem: on partisan issues, Republicans wield the means to bypass the two-thirds rule. This happened during the regular session with controversial bills on sonograms and voter ID, and even HB1, the state's budget bill. And also, during a special session the two-thirds rule is often not in place.
The consequences of all this have already begun with school districts - as early as May - announcing personnel layoffs. Statewide, teachers comprise more than 60 percent of a school district's budget. Teachers, teacher aides and support personnel could lose jobs by the thousands because state leadership championed a pledge of no new taxes and due to my colleagues' resistance of all measures that would raise revenues.
With the state's flat refusal to raise funds, even by closing millions in tax loopholes, those decisions will be pushed down for cities, counties and school districts to make the unenviable choices of dipping into fund reserves, raising taxes or making cuts. Some combination of the three is all but certain.
The budget will also not fund caseload growth for Medicaid or the Children's Health Insurance Program (CHIP) - which pays healthcare costs for those who are indigent or cannot afford health insurance. Medicaid is paid for by the state matching federal contributions that pay medical providers.
One might ask, 'why don't we use the $9.5 billion we'll have in the Economic Stabilization Fund, i.e., the Rainy Day Fund?' Well if you haven't been able to track us day-to-day, we have. The Legislature will pay for the shortages in the current FY11 budget with $3.2 billion from the state's savings account. In addition, the decision to not fund $4.8 billion in Medicaid caseload growth will call for that running tab to be settled-up by the Rainy Day Fund in 2013. Do the math, it's simple grade school arithmetic, although rising class sizes may make even that task more difficult.
For more information, please call Kelvin Bass at 512-463-0123.