Texas Lawmakers Kick The Can Down The Road

AUSTIN (AP) – Texas lawmakers started the year promising to make hard choices to solve the largest budget shortfall in the state’s history. They delivered one speech after another about not “kicking the can” down the road.

Yet that’s exactly what they did.

Gov. Rick Perry signed a budget that was balanced only through accounting maneuvers, rewriting school funding laws, ignoring a growing population and delaying payments on bills coming due in 2013.

It accomplishes, however, what the Republican majority wanted most: It did not raise taxes, took little from the Rainy Day Fund and shifted any future deficits onto the next Legislature.

Those are key talking points for Perry, as he speaks to the conservative faithful around the country and considers a run for president in 2012. Many Republican lawmakers have complained privately, and Democrats publicly, that Perry has heavily influenced the session to make sure nothing passed that would hurt a potential campaign.

States across the nation faced major budget shortfalls this year, but none as big as Texas. While most legislatures chose to raise taxes and fees along with making cuts, Texas tea party activists put enormous pressure on the Republicans, who control every branch of state government, to manage the $27 billion shortfall through cuts alone. That included $7.8 billion to health and human services.

Texas Republicans crowed about their budget accomplishment. Perry, who has touted his budget-cutting prowess as he flirts with running for president, declared victory.

“I am proud Texas will continue to live within its means while encouraging job creation and maintaining essential services,” said Perry, who claims that keeping taxes low helps create jobs.

Lt. Gov. David Dewhurst bragged that the $80.6-billion, two-year budget will cut state government spending by $15 billion compared to the previous budget.

Critics, who see things differently on what services are truly essential, say it underfunds the state’s needs by $10 billion beyond that.

Democrats also derided the GOP’s claim that it was truly a balanced budget.

“It’s all smoke and mirrors and misdirection,” said state Rep. Garnett Coleman, D-Houston. “There’s no way this is a balanced budget. It’s billions short of where Texas is supposed to be on Medicaid and education.”

Much of the overall savings came through cuts to university and state agency budgets, but the bulk of it came from accounting sleight-of-hand and putting off the biggest problems until lawmakers come back in 2013. At that point, lawmakers will be bound by the balanced budget law to tap the Rainy Day Fund to cover any existing deficit and House rules will require fewer votes to do it.

In Texas, the elected state comptroller — currently a Republican — can certify the budget is balanced if the spending does not exceed the revenues she expects over the next two years. That leaves lawmakers with a lot of leeway to use ploys that have been practiced for more than a century.

The first accounting shift was to delay a $2.3 billion payment owed to public schools in 2012-2013 by one day, so that the bill isn’t technically due until 2014, thereby going into the next budget. The new budget also assumes there will be no growth in the number of school children in Texas, even though it is one of the fastest-growing states in the nation. Critics say the state will short school districts $2 billion that way.

Lawmakers also decided to rewrite the laws that determine how Texas pays for public education, since the Legislature could not afford what the law mandated. They slashed $4 billion in what will be the first cut in per-student spending in Texas since World War II. Districts must either lay off thousands of teachers and increase class sizes, increase local property taxes or both.

Republican leaders came up with another $800 million on paper by ordering the Legislative Budget Board, essentially the Legislature’s accountants, to forecast a faster increase in land values in order to show more property tax income for schools. While signs do point to a recovering economy, state Rep. Mike Villarreal, D-San Antonio, found the move dishonest.

“The education cuts hurt our children and economy and the accounting tricks will put the state into a deeper ditch in two years,” Villarreal said.

Lawmakers also chose to ignore the estimated $4.8 billion extra it would need for the Medicaid health care program because of Texas’ fast-growing population and high poverty rate. By simply opting not to budget for it, conservatives showed their hatred for the program and could technically balance the budget.

But all the deferred bills and payments will come due eventually, and the Republican victory in not tapping the $6.5 billion Rainy Day Fund is for this year only. Conservative lawmakers readily admit that one of the first things they’ll do when they come back in 2013 is tap that resource.

“The Rainy Day Fund is probably already spent with the Medicaid costs and public education,” said Rep. Phil King, R-Weatherford. “I think that’s where all of the Rainy Day Fund will go” in 2013.

But the biggest problem lawmakers left unaddressed is the $8 billion structural deficit that recurs every two years. The deficit was created by a deal to lower property taxes while transforming the state’s business tax. It has never generated as much money as expected.

The Standard & Poor’s rating agency says the problem hurts Texas’ credit rating and is the “primary source” of the state’s budget woes, not slower revenue growth.

Even the Republican chair of the Senate Finance Committee warned of trouble ahead if Medicaid and public educations were not fully funded.

“This is a really big deal,” Sen. Steve Ogden, R-Bryan, said. “We cannot kick the can down the road on everything.”

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)


One Comment

  1. Tom Katt says:

    The malignant cancer known as Rickey Boy Perry….. Another right wing Christian Conservative that worships Mammon. If a Christian votes for Perry, they are voting for Satan

  2. Mad Milker says:

    like on Jenkins Hill in Washington D. C…..all politicians are turnips.

    Did you know everything in ones country hinges on its currency.

    Did you also know that Retail makes NOTHING and the Government only makes MORE DEBT.

    Now, for the past 100 years in America the Government in Washington D. C. has put we the people from a $2.6 billion debt load in 1910 to over $14 trillion today.

    And with 1975 being the last year America had a trade surplus more Retail has been born and more and more NOTHING is being made.

    See, it’s all about the American currency(George Washington)and just how those dollars float around.

    Years ago when they floated around this great union helping each hand George was touching foreigners would had given their left nut just to touch one of them.

    But today it be a different story because for the past thirty-six years more and more of those George Washington’s have been sent to foreign lands and now all those foreigners have we the people and Uncle Sam by both nuts squeezing the life out of them.

    The dollar is the key in America just like the Mao(yuan) is the key in China.

    “It is the aim of good government to stimulate production, of bad government to encourage consumption.” – Jean Baptiste Say

    That quote is like 230 years ago and it makes more “cents” today than ever before…..remember, the Constitution wasn’t written for a Corporation nor was it written for a Government….it was written for We the People and the founding fathers with goose quill pens in hand and the penmanship of poets call it the American Dream.

    Now, ask yourself what was Sam Walton doing back in 1975 east of Seoul…did it have anything to do with making more products in America….

    Now, fast forward and ask yourself ….if Sam Walton didn’t take the hyphen out of Wal-Mart and replace it with a big single star Wal*Mart….was it the same person a few years back that took the star out and put the starburst at the end Walmart*.

    Think the word “rich”….99% of the people on Earth ain’t there. Yeap, 1% of the total population purdy much dictate very quietly to that 99% just how their money is spent.

    But there’s one small problem with them thinking like that…..cause it’s the 99% that hold all the power…it’s in their hand when they go to vote and it be in their pocket book and purse when they go to shop.

    Did you know Wal*Mart puts less than 5% foreign in all their stores in China….one can look at this in two ways….they are depriving the nice people of China from purchasing foreign made or they are doing for the best of the Chinese currency Mao(yuan) in making sure it doesn’t fall into foreign hands.

    Now, remember the 1975 year from above….

    and read what Lance Winslow wrote in that article “The Flow of Trade in a Global Economy”….

    “Now let us look at Wal-Mart again; you buy a product there, 6% goes to the employees, 10-18% is profit to the company, 25% goes to other costs and 50% goes to re-stock or the cost of goods sold. Of the 50% about 20-25% goes to China, a guess, but you get the point. Now then, how long will it take at 433 Billion dollars at year for China to have all of our money, leaving no money flow for us to circulate? At a 17 Trillion dollar economy less than 40-years minus the 1/6 they buy from us. Some say that if we keep putting money into our economy, it would take forever, but if we do not then eventually all the money flow will go. If China buys our debt then eventually they own us, no need to worry about a war, they are buying America, due in part to our own mismanaged trade, so whose fault is that? Not necessarily China, as they are doing what’s in the best interests, and we should make sure that trade is not only free, but fair too.”

    As an American you have the power. If you hold onto George Washington(dollar) he will not let you down.

    It’s not about a cheaper price to the 1%…it’s about holding all that power that George represents.

    Today, the Federal Reserve(private bank), China and Japan hold more George Washington’s than anytime in the history of this great union and the sad part is We the People that has all the POWER let it happen.

    In 1960 U.S. goods manufacturing produced a $5 billion trade surplus and if you as an American worker(non-union and union) want those days back in America all you have to do is STOP supporting other countries and start SUPPORTING the United States of America again.

    The label Made In America will tell that 1% what it told them sixty years ago.

    God Bless Made In America cause the two things Lady Liberty needs less of today is NOTHING from Retail and MORE DEBT from the turnips in Government.

  3. RandomUser says:

    Wait … lowering taxes doesn’t bring in more income to the state? Sorry, states and the US Government are living off debt, and refuse to admit the problem. There are hard choices ahead, but they refuse to see that.

    “But the biggest problem lawmakers left unaddressed is the $8 billion structural deficit that recurs every two years. The deficit was created by a deal to lower property taxes while transforming the state’s business tax. It has never generated as much money as expected.”

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