Capitol Fax.com - Your Illinois News Radar

Texas shows what cuts look like, if they actually pass

Posted in:

Illinois

* Texas just got its first look at proposed cuts to their two-year state budget, which has a huge deficit As always, click the pic for a larger image…

* But even with these cuts, it may not be enough…

Some analysts say the true shortfall could be much higher than $15 billion - closer to $27 billion - to account for enrollment growth in public schools and on Medicaid rolls, cost increases and other variables. That figure amounts to almost a third of discretionary state spending in the current budget.

So, this is only half of what may have to be done.

* Some details…

Texas lawmakers got their first glimpse of what the next state budget might look like late Tuesday, including a staggering $5 billion cut to public schools, as Gov. Rick Perry and his supporters were dancing at an inaugural celebration. […]

The budget draft, which is expected to be filed as legislation in the House later this week, would cut funding entirely to four community colleges and would generally eliminate financial aid for incoming freshmen and new students. The Texas Grants scholarship program would drop by more than 70,000 students over the next two years.

The proposal also would reduce reimbursement rates by 10 percent for physicians, hospitals and nursing homes that participate in Medicaid - a decrease that could eventually dry up participation in the program for poor and disabled Texans. […]

A $4 billion reduction to the Foundation School Program - the pot of money distributed to schools based on daily attendance - means the program would be short almost $10 billion below the amount required to fund the school finance formulas under state law. That would make school finance reform legislation almost inevitable. […]

While almost every other state agency would see a reduction in employees, the average number of full-time employees in Perry’s office over the next two fiscal years would go to 132, up from an average of 120 in the 2010-2011 budget.

* More…

The proposed budget does not cover $9.8 billion owed to the school districts under the current school finance formulas. […]

Democratic House members said the budget proposal pretends that the 170,000 new students expected in Texas classrooms just won’t materialize. Nor was money included to pay for new textbooks or supplemental science materials that are needed to prepare high schools for the upcoming end-of-course exams. […]

Spending on Texas Grants, the state’s main financial aid program, would be cut 41 percent, according to an analysis by the office of Rep. Mike Villarreal, D-San Antonio . The number of students receiving Texas Grants — 156,225 in the current biennium — would decline by half to 78,080 in 2012-13. […]

Medicaid reimbursement rates for doctors, nursing homes and other health care providers — already set so low that more than half of Texas doctors are refusing new Medicaid patients — face a 10 percent cut .

* The education cuts could very well mean a transfer of the tax burden to local taxpayers, if they’re willing to vote for them…

In Aldine ISD, voters rejected an attempt to raise the tax rate in August. Superintendent Wanda Bamberg said a decision to try again would be up to the school board.

The district, bracing for $30 million to $60 million in cuts, is preparing to increase class sizes, reduce busing services, continue a hiring freeze and reduce staffing even more if needed, Bamberg said.

“If the funding scenarios we’re hearing now become reality,” she said, “reductions of that size could certainly cripple this school district.”

* And they’re skipping part of the pension payment…

The state’s contribution to the state employee retirement fund would be reduced from 6.95 percent to 6 percent, less than what is needed to maintain the fund, according the Legislative Budget Board. The base budget proposes a similar cut in contributions to the Teacher Retirement Fund.

* Except for the governor’s staff budget, almost everything is taking a hit…

Parks and Wildlife Commission would fall from $717 million to $479 million.

* By the way, Texas got itself into big budgetary trouble without the help of the now universally demonized public employee unions…

Oh, and at a time when there’s a full-court press on to demonize public-sector unions as the source of all our woes, Texas is nearly demon-free: less than 20 percent of public-sector workers there are covered by union contracts, compared with almost 75 percent in New York.

* Also, these cuts are just a first draft. Expect changes…

But the chief budget writer in the House stressed that the recommendations are only a starting point and will likely undergo extensive changes as lawmakers craft a final spending bill during the 140-day legislative session, which started last week.

“I don’t want the folks back home to think this is a done deal,” said Rep. Jim Pitts, R-Waxahachie, chairman of the House Appropriations Committee, as he briefed House members about the 980-page document. “It is not.”

* Related…

* Child-protection budget cuts fought: In announcing its legislative priorities, the group decried the proposed cuts, which would slash $467 million from the Child Protective Services portion of the Department of Family and Protective Services, about 18 percent. The proposed cuts also call for a staff reduction of 14 percent, mostly from the ranks of caseworkers and supervisors, said Madeline McClure, executive director of TexProtects, also known as the Texas Association for the Protection of Children.

* Texas budget fix may mean fewer teachers, bigger classes

* Texas House budget zeroes out state funding for crisis pregnancy resource centers

* With Medicaid cuts, everyone could pay more for health care

* Houston-area prison to shut under budget proposal

* Proposed state budget cuts would hit North Texas hard

* Amazon sues Texas, demands tax documents - Online retailer wants information on audit that led to $269 million bill

posted by Rich Miller
Thursday, Jan 20, 11 @ 10:11 am

Comments

What makes this situation particularly fascinating
is that both the Texas house and senate have Republican supermajorities, and, of course, a governor that has flirted openly with the idea of secession in response to some national Democratic policies.

This body should be unconstrained, both logistically and ideologically, to impose the sort of cuts outlined above, and more if necessary, without additional revenues.

Comment by The Doc Thursday, Jan 20, 11 @ 10:27 am
Bet they aren’t cutting the budget for executions!

Comment by D.P. Gumby Thursday, Jan 20, 11 @ 10:28 am
What you are missing is that Texas basically starts from zero every 2 years in recalibrating their budgets. They look at expenses and then projected revenues and make the decisions accordingly.

Whereas Illinois looks at the budget every year, “balances it” by piling on more debt and never really addresses the structural problems.

If the reason for posting this is to show that Texas has the same problems as Illinois, the attempt is way off base. They have nowhere near the problems we do and their economy continues to grow. Also, it completely bypasses the issue of medicaid and Obamacare on future liabilities incurred by the state.

Should we even bring up illegal immigration or is that off limits?

Comment by Logical Thinker Thursday, Jan 20, 11 @ 10:31 am
- What you are missing is that Texas basically starts from zero every 2 years in recalibrating their budgets. -

What you’re missing is that no matter when they calculate their budget, these cuts aren’t just numbers on a paper.

Comment by Small Town Liberal Thursday, Jan 20, 11 @ 10:36 am
Excuse me?! Texas is the best state ever - just ask Tom Cross and John Tillman. It was but a mere 19 months ago they collaborated on an op/ed in the SJR that featured this excellent 3rd paragraph:

**During the past 10 years, more than 727,150 people left our state, ranking Illinois third in the nation in net outmigration. “We’re moving to Texas,” to paraphrase what a few friends have said. “Dallas has the best growth opportunity for what I do. Plus, there’s no income tax and property taxes are much lower. We can live like kings there.”**

Yes, well. How’s that working out for Texas? And, bad as Illinois’ finances are, that was a glimpse into what Cross and his ilk aspired to if given the chance.

It’s fun to be a glibertarian, until those chickens come home to roost. They always do. IPI really ought to get a chicken coop for its lawn.

You can view it here, until someone gets busy a scrubbin’ the HRO website and it disappears down the GOP memory hole:

http://www.ilhro.com/news/in-the-media/85-tom-cross-and-john-tillman-state-needs-to-get-moving-on-economic-reform-agenda

Comment by Willie Stark Thursday, Jan 20, 11 @ 10:37 am
What is the point of having a “rainy day fund” if you don’t tap it to fill budget gaps during a fiscal downturn? Hint: it’s raining in Texas. In fact, it sounds like it’s a torrential downpour.

Comment by 47th Ward Thursday, Jan 20, 11 @ 10:44 am
@Logical Thinker -

What you are missing is that this is what 10% budget cuts — The Brady Plan — look like:

- 4 state colleges closed
- 70,000 students denied college financial aid
- Medicaid reimbursements cut to the point where doctors and nursing homes can no longer care for the elderly and disabled
- Funding for crisis pregnancy centers completely eliminated.

Its easy to criticize Quinn and the Democrats for taking the painful yet necessary steps to enact a responsible budget.

Until you look at the Republican alternative.

Comment by Yellow Dog Democrat Thursday, Jan 20, 11 @ 10:50 am
So, how much longer is that high tech boom going to last if Texas ends up gutting its higher education system?

Will they now have to import college and technical school grads from out of state to run all those businesses that fled IL and other high tax states? Will there be an exodus of native Texan young adults who can no longer afford to attend college in their home state? I guess we’ll just have to wait a few years and see.

Comment by Secret Square Thursday, Jan 20, 11 @ 10:52 am
–They have nowhere near the problems we do and their economy continues to grow.–

States by poverty rate:

IL: 11.5%, 24th
TX: 16.2%, 46th

High School Graduation Rate:

IL: 78%
TX: 67%

Unemployment Rate:

IL: 9.2%
TX: 8.3%

Like Chughar said in “No Country for Old Men”: No problem, friendo.

Comment by wordslinger Thursday, Jan 20, 11 @ 10:52 am
YDD,

I have news for you. The Texas plan and the closing of colleges, problems for students obtaining aid, and the others WILL come here. It will come everywhere.

Regardless of how you spin it, there just isn’t any money. No one has it and those that do, you’ll never get it from them because they have all the resources available to them to hide it.

This process is called the “deleveraging” of our society and it’s going to be a long and painful process. Let’s stop kidding ourselves that a 2% income tax hike is the panacea that puts us back on solid footing. When the revenues fall short of projections, we’ll be right back at square one having the same conversations.

Comment by Logical Thinker Thursday, Jan 20, 11 @ 10:54 am
I continue to believe that this is exactly the budget, if introduced, that would have energized more members of the GA to talk responsibly about revenue increases.

Comment by steve schnorf Thursday, Jan 20, 11 @ 10:56 am
Wordslinger,

When do we get to bring in the overwhelming numbers of illegal immigrants in Texas into the conversation? Or is that not allowed?

Comment by Logical Thinker Thursday, Jan 20, 11 @ 10:56 am
About four years down the road Illinois and Texas should make interesting comparisons.

Comment by Bigtwich Thursday, Jan 20, 11 @ 10:59 am
The point that the ultimate real culprit is not public employee unions is well made with this example.

The problem, which is nationwide and impacts all states to a greater or lesser degree, is that the ultimate culprits for the mess are the collision of the recession with long term ’smoke and mirrors’ financial shennanigans by the elected officials.

Every state (and the fed) has been living off its credit cards and home equity loans for a long time - never paying off the balances or building any real reserves - and now the bubble has burst, revenues are down but the bills kep getting bigger.

D run states tend to be in worse shape than R run states overall, but every state is in trouble.

Comment by titan Thursday, Jan 20, 11 @ 11:02 am
Logical Thinker your right and when that happens we will move to a graduated income tax. Perhaps we may want to sell the house now and move to Texas.

Comment by Palatine Thursday, Jan 20, 11 @ 11:02 am
All budget talk aside, I will take Austin weather any day over what an Illinois January looks like.

Comment by Living in Oklahoma Thursday, Jan 20, 11 @ 11:03 am
Rich

An absolutely outstanding analysis of the Texas
budget.

Comment by Pete Granata Thursday, Jan 20, 11 @ 11:35 am
I am probably missing something here and maybe this is apples to oranges but it looks like Texas has been spending out their butts. Even with the drastically reduced projected budget of $156 billion, that still works out to $6240 per person in spending (25 million people).
Illinois’ total budget of what? $60 billion? That works out to only $4615 per person (13 million people). That is 35% higher per person spending in Texas than Illinois AFTER their cuts.
I must be missing something (maybe has to do with the federal money) otherwise I would say they have a ways to go on their cuts.

Comment by Been There Thursday, Jan 20, 11 @ 11:35 am
@Been There

Perhaps the Texas state budget includes line items that in Illinois are paid by local governments.

Schools for example.

Comment by Bill White Thursday, Jan 20, 11 @ 11:41 am
@Schnorf -

I agree — somewhat. Senate Democrats introduced the Brady Plan, but the media ignored it because they didn’t think Illinois lawmakers could possibly be that cruel or short-sighted.

Even with the tax plan that’s been enacted, there will be more cuts, which gives Quinn another bite — albeit smaller — at the apple.

Comment by Yellow Dog Democrat Thursday, Jan 20, 11 @ 11:52 am
–When do we get to bring in the overwhelming numbers of illegal immigrants in Texas into the conversation? Or is that not allowed?–

Why ask me? Keep me out of your strawmen activities, please.

Comment by wordslinger Thursday, Jan 20, 11 @ 11:52 am
@Logical Thinker -

Unlike you, I’m not willing to throw in the towel.

American workers are the most productive in the world.

America is still the #1 manufacturer in the world.

America’s universities are still the envy of the world.

Maybe you’re right — maybe we ARE willing to pull the plug on higher education.

Maybe we’re envious of the standard of living of Chinese workers.

But I think not.

Comment by Yellow Dog Democrat Thursday, Jan 20, 11 @ 11:56 am
Could some of these budget projections by the states be a coordinated effort to play chicken with the federales or other states’ politicians? The spillover impact of draconian efforts will put extra burdens on other states like Illinois that may have more favorable health and education programs. Emigration of people hurt in Texas to states and local communities that attract them could require the federal government to get involved or attempt to preempt some disastrous scenarios. Could this be part of a continuing effort by the states to force the federal hand in bailouts to preempt what some states may be letting loose — banana republicanism and the ensuing chaos?

Comment by vole Thursday, Jan 20, 11 @ 12:23 pm
“Texas officials told Amazon.com Inc. that it owes $269 million in uncollected sales taxes”

I guess all those U_Hauls headed for Texas will be met by U-Hauls exiting Texas. Think I will look into a U-Haul franchise and happily pay taxes.

Comment by Bigtwich Thursday, Jan 20, 11 @ 12:49 pm
This is terrible. Texas has a HUGE head start on Illinois in the race to the bottom.

Comment by lincoln's beard Thursday, Jan 20, 11 @ 12:55 pm
I lived a significant length of time in Texas and know a few pols and decision-makers. Their legislature and exec are dominated by the head-in-the-sand types who are unable to see the connection between the government services that people clamor for and the taxes that pay for them: Government services for nice, suburban middle-class people spring fully formed from the fertile Texas soil, and taxes are an evil, confiscatory conspiracy by liberals and Yankees and snooty educated types.

Well, The parade is about to start (maybe down 6th St. in Austin!) and the people are about to see that the Emperor has no clothes.

Comment by Ray del Camino Thursday, Jan 20, 11 @ 1:08 pm
We love our own mythology that Illinois is the worst of all sorts of things. Its all nonsense. Texas has produced more minimum wage jobs but do they have a world clss metro areas like Chicago?
They do have a lot of hunters who vote republican who may find no public hunting areas with those TPW budget cuts. This should be very interesting. It may encourage a higher voting rate there too. Thye are a majority minority state so we shall see how shutting the education system affects voting

Comment by western illinois Thursday, Jan 20, 11 @ 1:38 pm
Public hunting areas in Texas? We have very few public hunting areas for a reason, because the private sector does a pretty dang good job filling that void.

Comment by Doug Thursday, Jan 20, 11 @ 1:57 pm
Got a brother who is a longer timer in Texas. He went on and on about how great everything has been there and how people should make do for themselves. Told him about the numbers that were starting to pop up about Texas budget issues. He just blew it off. Last night he calls with ‘Maybe it’s time to move.’

All budget talks remains simply talk until some state actually does something because there finally is no other place to turn. The reality of Texas closing state schools, cutting 70,000 students, and whacking 24% in human services gives a tangible, actual outcome that cannot be denied. The plan will get tweaked, but the shear size of the problem is not going away because of some political talking points.

Comment by zatoichi Thursday, Jan 20, 11 @ 2:17 pm
I guess this is just Mr. Miller’s way of allowing all the D’s out there to complain about the ways R’s are handling their budgets. NJ, now TX. I would like to interject that noone has mentioned that the federal stimulus money is almost gone. State budgets have been artificially inflated for two years now and the piper has come calling. Difficult choices must be made. I look forward to seeing who was wiser: budget cutters or tax raisers. but it will take a few years until we will know who did best. I’m betting on budget cutters.

Comment by Dwight Thursday, Jan 20, 11 @ 2:47 pm
Dwight, bite me.

Comment by Rich Miller Thursday, Jan 20, 11 @ 2:49 pm
@ Dwight,

According to the State of Texas’ own website they got just shy of $15 BILLION in stimulus money.

The current projected budget shortfall is between $15 Billion to $27 Billion.

So either Texas INCREASED spending in the 2009-2011 budget OR they simply used stimulus money to patch a hole in the 2009 budget.

If ‘cutting’ is the way to go, too bad they didn’t have the brass hangers to do it when they needed to rather than patch a hole in 2009.

Afterall, if it’s just the elimination of the the stimulus money, then really there should be NO ‘cuts’ as everything was gravy (stim funding) right?

Sorry pal. Your GOP budget guru’s down in Texas simply drove their state into the dirt. And they are not going to ‘cut’ out of it.

It won’t take years to see that either. They are in for a rough ride.

If they wanted to crow about how good they were for the last few years (fiscally) then they should have been buying new hay for when the chickens came home to roost. Now they just have an empty henhouse.

Comment by How Ironic Thursday, Jan 20, 11 @ 3:41 pm
@Dwight:

These issues aren’t about D’s and R’s. Until people get that through their thick skulls things will continue to be bad b/c everyone will still be focused on “who is to blame.” The fact is, Dwight, that EVERYONE in Illinois politics is to blame. That is just a fact.

Comment by Demoralized Thursday, Jan 20, 11 @ 4:13 pm
@ Demoralized,

Had Mr. Miller not banned me from making comments I would tell you that you are correct that there is plenty of blame to go around. However, there are two differing paths to correcting the mess we are in. I believe iin cutting expenses which is generally the goals of R’s. D.s prefer raising taxes. Those are also facts.

Comment by Dwight Thursday, Jan 20, 11 @ 4:21 pm
– Did you know TX has a $10 billion rainy day fund? I think they got us beat pretty good.–

$10 billion in a rainy-day account? You big government types. You want government to steal our money even when they don’t know what to do with it.

They have a $25 billion deficit.

I used to work with a guy who had $50,000 in credit card debt and $10,000 in a passbook account. He thought he was Commodore Vanderbilt.

Comment by wordslinger Thursday, Jan 20, 11 @ 4:44 pm
@Dwight -

What you and Republicans refuse to recognize is that the people of Illinois, Texas and the rest of the country are more than just line items.

When you eliminate funding for crisis pregnancy centers or nursing homes, pregnant teens and disabled seniors don’t just magically disappear.

When you eliminate funding for 70,000 kids to attend college, our need to have a well-educated work force doesn’t magically disappear.

The irony, as someone pointed out to me earlier, is that when its their street that doesn’t get plowed, Republicans are the first to complain.

Comment by Yellow Dog Democrat Thursday, Jan 20, 11 @ 4:49 pm
That rainy day fund is oil money. Socialists! lol

Comment by Rich Miller Thursday, Jan 20, 11 @ 4:51 pm
Sigh. Rich, Rich, Rich, why must you continue to throw facts and numbers out. As Karl Rove said, “[we’re] entitled to our math, [Republicans] are entitled to THE math.”

And why oh why Dwight and other angry R’s on this board do you insist that you EITHER raise taxes or you cut budgets. All states are going to have to do both (other than Alaska which is awash in high-oil priced revenue) in order to get through this crisis. IL is doing that.

Comment by Chicago Cynic Thursday, Jan 20, 11 @ 6:04 pm
Dog, I think having to face actually DOING these things, actually voting for them (which 4 community colleges shall we close?) rather than simply calling for them non-specifically, longing for them, extolling them, would be a good exercise for those who believed cuts and not revenue increases were what we needed to do.

Comment by steve schnorf Thursday, Jan 20, 11 @ 6:19 pm