Quantcast

Texas' economic miracle beginning to tarnish

By Chris Tomlinson

Associated Press

Published: Wednesday, March 16 2011 4:46 p.m. MDT

FILE - In this March 15, 2011, file photo Republican State Representatives Van Taylor, left, and Jim Pitts discuss the state budget in the House Chamber at the Capitol in Austin, Texas. Gov. Rick Perry and his fellow Republicans, who have talked tough about weathering the state's $27 billion budget crisis solely by cutting spending, relented Tuesday and endorsed a plan to take money out of the state's rainy day fund to fix one part of the Texas budget shortfall.

Austin American-Statesman, Jay Janner, File) MAGS OUT; NO SALES; TV OUT; INTERNET OUT; AP MEMBERS ONLY, Associated Press

Enlarge photo»

AUSTIN, Texas — Some in Texas had talked tough about solving the state's budget problem by austerity alone, but lawmakers finally faced a hard fact: Texas is in serious financial trouble.

The severity of the state's $27 billion budget crisis was evident in the furrowed brows, sad eyes and pained expressions of legislators. They fidgeted in their seats as hundreds of teachers, parents and disabled people explained in testimony in recent weeks how proposed budget cuts would ruin their lives.

Legislatures elsewhere are facing budget problems, but most are blending cuts with asset sales, increased fees and tax modifications to soften the impact. Texas prides itself on lean government so Republicans here promised to solve the crisis here by budget cuts alone.

Then rhetoric hit reality this week. The result was the latest and most vivid example of a state taking steps it had fiercely resisted.

The Republican committee chairman's southern accent turned plaintive as he urged legislators who had campaigned on preserving the state's $9.2 billion Rainy Day Fund to now break that promise to ease the budget pressure.

"If you want to close this shortfall through cuts alone, you have to either (completely) cut payments to Medicaid providers, cut payments to school districts or lay-off a substantial number of state employees," said state Rep. Jim Pitts, chairman of the House Appropriations Committee. "You would have to do these things immediately."

Magnifying the difficulty of the move here was that Pitts and other conservatives knew they had to get the state's — and perhaps the nation's — most outspoken advocate of budget cutting -- Gov. Rick Perry -- to climb down from the no-spending pledge with them. It took a week of convincing, but Perry, Lt. Gov. David Dewhurst and Speaker Joe Strauss — all Republicans — issued a statement on Tuesday approving a $3.2 billion withdrawal from the reserve fund to plug the budget hole, in addition to making $1 billion in cuts.

That deal will solve the budget problem — until Aug. 31. Lawmakers still need to cut another $23 billion from the next two-year budget.

"In other words, the state only has about three-fourths of the money it needs to continue doing what it is doing now," explained F. Scott McCown, director of the Center for Public Policy Priorities, an advocacy group for the poor. "And every single thing the state does now is something that the governor previously agreed it ought to be doing."

Several months into the current legislative session, the government fiscal crisis across the nation is proving as difficult for states with a tradition of austerity as for those more accustomed to spending. Other conservative states are struggling with how to pay for keeping tough-on-crime corrections policies in place.

Perry, the state's longest serving governor, has signed every budget over the last 10 years and praised lawmakers for spending only what's necessary. When lawmakers pressed Perry's budget experts last week to help cut $4 billion from the current budget, they could only find $50 million in new cuts.

So Perry relented, but his support for tapping the Rainy Day Fund now came with an ultimatum about the budget that begins Sept. 1.

"I remain steadfastly committed to protecting the remaining balance of the Rainy Day Fund, and will not sign a 2012-2013 state budget that uses the Rainy Day Fund," Perry warned. So the dilemma may return.

The Texas Public Policy Foundation, one of the most influential conservative groups in Texas, opposed this week's concession and will fight any future solutions involving spending.

"We are disappointed to learn that Texas will likely resort to using its Rainy Day Fund this early in the legislative session," said Talmadge Heflin, the group's director. "Those who seek to empty the fund because it is raining today have not checked the long-range weather forecast."

Get The Deseret News Everywhere

Subscribe

Mobile

RSS