Wednesday, November 10, 2010

The Texas State Budget: How did we get that HUGE Shortfall???

Over and over in the news I see reports of budget shortfalls for states.  Estimates in newspapers for the Texas Budget shortfall range from $18 billion to $25 billion.  So I decided to write a new series of posts on the Texas Budget.

Then the confusion set in.  When I started to investigate the shortfall by going to websites where these things are actually calculated, like the Center on Budget and Policy Priorities (CBPP), which gathers data on all the states, and the Center for Public Policy Priorities (CPPP), which deals specifically with the State of Texas, I started finding a lot of discrepancies.  The CBPP which gets its numbers for Texas from the CPPP says the budget gap is $4.6 billion for 2011.  But the CPPP says
Texas needs to make significant public investments in infrastructure and services to ensure our prosperity. Unfortunately, Texas is a low-tax state with a structural deficit. In 2006, the state made its structural deficit worse by pledging to pay for a local school property tax cut. The "hole" or uncovered cost of that tax cut is now almost $10 billion per biennium. To add to the state's woes, just before the legislative session began in 2009, the country went into a severe economic recession that substantially reduced state tax revenues. Fortunately, the federal government stepped in with Recovery Act funding. Even so, many important projects and programs were left unfunded or inadequately funded.
Now, I guess you could figure that $10 billion per biennium has added up since 2006 to about $20 billion.  Not quite sure where the $4.6 billion figure comes from.  According to the Sunshine Review of the 2009-11 budget there was a projected amount of $9 billion in the Rainy Day Fund, which probably helps balance the budget out to the point that in 2010 the gap in the budget is $3.5 billion, with an added $1.3 billion in 2011, which adds up to $4.8 billion.  But usually, legistators hate touching the Rainy Day Fund.

In an article by Veronica Flores-Paniagua in the Express, she says the shortfall is about $25 billion, so if you add $20 billion for the last four years plus $4.6 billion from the CBPP, then it sort of makes sense.

Since the Texas legislature only meets every other year they have to come up with a budget that covers the government until the next legislative session in 2013, two more years, another $10 billion.  Public School Districts across Texas have been ordered to cut their budgets by 5-10%.  Now there is always fat in a large bureaucracy that can be trimmed, but if you are looking at $60 million for the next school year like Northside ISD, limiting paper use doesn't go very far, and hiring freezes can only work for a limited time in a fast growing school district.

Then to add to the pain, Perry refused to sign off on the latest school funding bill which would have given some relief to cash strapped districts.  The political wrangling on that bill was just plain STUPID in my opinion.  I blame both Perry and Lloyd Doggett for being pig-headed.  Lloyd Doggett basically drew a line in the sand by requiring Perry (the only governor required to do this) to pledge that federal funding would not replace state funding for schools (which apparently happened the last time Texas got federal school funding).  Perry, of course, refused to sign it, saying it was illegal for him to tie the legislature's hands for the future budget process, making him a Tea Party Darling.  Lloyd Doggett was trying to make Perry look bad, because he wasn't taking money for the schools, well that BACK FIRED, and now the school districts are paying the price.

Texas is 35th in the nation in per pupil spending.  Now if you are anti-taxes you probably think this is great and spending per student is not necessarily an indicator of how well students do in school.  But when budget cuts have to continue, because there is no money to make up for the gap in spending, after awhile it will effect student performance.  Can Texas afford to lower its student performance at a time when it is becoming the place for high tech and biomedical companies to locate, grow and proper?  Remember that old saying, you get what you pay for.

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