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Budget deal reached

One less reason for a special session. Assuming nothing else goes wrong, and Rick Perry doesn’t veto it out of whatever sense of grandeur and vanity drives him.

House Speaker Joe Straus indicated legislative negotiators have reached an agreement on the state budget, and the House soon today will consider the much-delayed revenue-generating bill crucial to balancing it.

“We wouldn’t be going with this bill until there was an agreement, so you can draw your own conclusion,” Straus told reporters, referring to Senate Bill 1811. “We’re ready to go.”

Straus didn’t give details, but one sticking point had been higher education, an item on which senators initially wanted to spend $1 billion more than the House. The House countered with an offer to narrow that gap by $300 million.

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said a bit earlier after leaving a meeting on the House side, “We’re working on it … We’re in better shape than we were a few hours ago.”

SB1811 “has to pass in some form in order to balance the budget,” Ogden said. The measure includes deferring about $2 billion in state school payments.

Postcards and the Trib have more. Looks like Sen. Florence Shapiro’s SB22, which was added as an amendment to SB1811, will be the plan to officially reduce funding to the public schools. We’ll see if those House teabagger freshmen and others who’ve been expressing heartburn about voting to slash funding to their own schools wimp out or not.

I normally put statements from elected officials beneath the fold, but this one from Rep. Garnet Coleman deserves to be seen by everyone.

Rotten Deal Bad for Texans, Nursing Homes, Schools and Colleges

Republicans in the Texas House and Texas Senate have come to an agreement for the 2012-2013 state budget. The rotten deal cut by the Republican supermajority cuts nursing homes, public schools and universities, and financial aid for college students. Their celebratory rhetoric does not match the reality of their budget’s painful cuts to Texans.

Texas needs to pass a budget with $99 billion to provide the same level of services to Texans. No real effort was made by the conference committee to improve the painful cuts made in the House and Senate.

$21 billion short of current services – House budget
$16 billion short of current services – Senate budget
$18 billion short of current services – “Rotten Deal” Budget

All Republicans have done is come to an agreement between bad and worse. Republican leaders are boasting that they cut a deal, but for some reason haven’t bragged about their cuts to nursing homes, public schools, and public universities, all of which will adversely affect Texans. Those in control in the two chambers have come to an agreement to burn down the house we know as Texas.

The cuts from the current biennium, like the 3% rate cut for nursing homes, carry forward under this budget. On top of the new level of cuts, the rotten budget deal uses funny money and accounting gimmicks like delaying payments to push off the cost to the next Legislature. They also left money in the Rainy Day Fund during a storm and didn’t even address the permanent budget shortfall created by Gov. Perry in 2006. Republicans are writing a hot check so they can skip town and not fix the mess they’ve made.

Untouched money sitting in the bank:
$6.6 billion Rainy Day Fund
Drastic Cuts:
$4 billion cut from public schools for Texas children
Funny Money:
$4.8 billion in unfunded Medicaid services for elderly, disabled, children and pregnant women
Accounting Gimmicks
$700 million “assumed savings” from Medicaid waivers that likely won’t be approved.
$2.2 billion “deferral” of Foundation School Program payment
Permanent Structural Shortfall Not Addressed
$10 billion shortfall every 2 years

Future shortfall
$10 billion shortfall every 2 years
$700 million “assumed savings” from Medicaid waivers
$2.2 billion “deferral” of FSP payment
+ $4.8 billion in unfunded Medicaid
$17.7 billion shortfall for the 83rd Legislature

There’s no way this is a balanced budget. It’s billions short of where Texas is supposed to be on Medicaid and education. Even worse, it means Texas is going to be at least $17.7 billion of current services next session. Those in control of the budget should have crafted a budget that invests in our children, ensures that our seniors are cared for, and protects vulnerable Texans. Instead, they’ve developed an irresponsible budget, made devastating cuts to Texans, and created a huge shortfall that Texas families will have to make up for in the next legislative session.

Keep an eye on that $17.7 billion number. There’s no question that a lot of the “cuts” from this budget are just bills being deferred to the next Lege, and as we’ve discussed before, the Rainy Day Fund that Perry and his minions have been so mulish about not using will be tapped at some point in 2013 to pay the piper. What I want to know is, what excuse will the Republicans use for the next ten-digit budget shortfall? Who will they blame next time? The 2014 elections may wind up being more interesting than the 2012 elections will be. A statement from Sen. Wendy Davis is here and a statement from Sen. Rodney Ellis is beneath the fold.

Senator Rodney Ellis (D-Houston) today said the budget solution being crafted between the House and Senate will create perpetual future deficits which will force more cuts and more pain next session and beyond.

Ellis said the political decision to not use any of the remaining $6.6 billion Rainy Day Fund for the current budget, the failure to address Texas’ structural deficit and over-reliance on accounting tricks, payment deferrals and outright dishonesty — such as counting federal Medicaid waivers which were not even granted under the Bush Administration — will lead to another massive deficit in 2013 and provide fewer tools to address it.

“Those in charge are creating a perpetual massive deficit machine, which will force future legislatures to pay the hot checks written by this one,” said Ellis. “It is Enron accounting writ large and will force more deep cuts next session and keep us from investing in the future.”

According to reports on budget negotiations, House and Senate budget leaders will push $4.8 billion in Medicaid spending to the next budget, count money from federal Medicaid waivers, and defer nearly $2 billion in payments to Texas schools by a month, which extends the costs into the 2014-15 budget cycle. Meanwhile, with HB 400 and SB 22 in peril, school finance formulas would remain unchanged; if so, education funds would be prorated and the state would not pay schools everything they are owed this cycle, adding $5 to $6 billion to the deficit for 2014-15.

In addition, the legislature has done nothing to address the structural deficit resulting from how the legislature paid for property tax cuts during the 2006 school finance debate. The business, or “margins tax,” simply did not raise enough revenue to offset property tax cuts and, according to the Texas Comptroller of Public accounts, will lead to a $10 billion shortfall every two years if we do not fix the tax.

“We have set the precedent that the Rainy Day Fund cannot be used even under the most dire fiscal circumstances,” said Ellis. “We are pretending to balance the budget with money we will never get from the federal government and by passing the buck down to local governments, or just by kicking the can down the road with deferrals. It is dishonest, immoral and Texas families will pay the price.”

Ellis linked the de facto budget deficit regime to HCR 18, which calls for a federal balanced budget amendment and passed the Senate yesterday.

“It is ironic that the same week this legislature lectured the federal government on deficit spending, we are ensuring Texas carries deficits well into the future,” said Ellis. “Politics is full of hypocrisy, but when it will lead to more cuts to schools, more cuts to health insurance, more cuts to nursing homes, more cuts to the environment and to virtually every program important Texas families, we’re entering a whole new level of dishonesty. We certainly shouldn’t pat ourselves on the back and say ‘we did the best we could’, because we didn’t and, frankly, we didn’t even try.”

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8 Comments

  1. Amerloc says:

    Reminds me of this:

    One day a man drove by a farm and saw a three-legged pig. The man went up to the farmer and said, “Excuse me sir, but why does that pig only have 3 legs?”
    “Well,” said the farmer, “that there pig is very special. One time my wife was cooking something she stepped out of the kitchen and it caught on fire. No one in the house knew about it but the pig and he saved me, my wife, and my 2 kids.”
    “That’s amazing sir but why does that pig only have three legs?” said the man.
    “Then there was that time the pig saw a big storm coming and we didn’t. The pig ran into the house and dragged us out to the storm cellar. If it weren’t for that pig we would all be dead.”
    “But still, that doesn’t explain why the pig only has 3 legs.” “And I remember the time my youngest son was stuck up in a tree but I was too far away to hear him scream. The pig came running towards me and led me to where he was.”
    “Well, that is miracle but how come that pig only has 3 legs?” the man said quite annoyed at this point.
    “Well,” said the farmer, “with a pig that special… you have to eat ‘em real slow.”

  2. […] the legislature clearly don’t. I don’t even know what else to say. Perhaps now that a budget deal has been reached, there will be some resolution for this, though I don’t know what I’d […]

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