Ellis: Budget is Terrible for Texas’ Present & Future

(Austin, Texas)—Senator Rodney Ellis (D-Houston) today said the 2012-2013 budget it is terrible for Texas families because is slashes $4 billion from schools, guts health insurance programs for children and seniors, cripples financial aid and will create perpetual future deficits which will force more reckless cuts next session and beyond.

CSHB 1 and CSHB 4 provides $80.7 billion in General Revenue, but Texas will need to spend $99 billion in General Revenue simply to provide the same level of services to Texans.

Ellis criticized the process, pointing out that many warned the initial budget cuts proposed in January were deliberately draconian to make the final budget appear somehow less severe.

“This has played out exactly as many of us predicted,” said Ellis. “In January, the House and Senate offered apocalyptic budgets that completely devastated Texas schools, gutted health insurance programs, threw thousands of seniors into the streets and virtually eliminated college financial aid. Now, we’ve gone from apocalyptic to merely horrific and we’re calling that an improvement.”

Ellis said the political decision to not use any of the remaining $6.5 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 not likely to be granted — will lead to another massive deficit in 2013 and provide fewer tools to address it.

“The legislature has now created 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 on a statewide scale and will force more reckless cuts next session and keep us from investing in the future.”

The 2012-2013 budget lowlights include:

* cuts over $4 billion from Texas schools now;

* cuts $220 million from Texas medical schools;

* shifts another $2 billion in payments to Texas schools into the 2014-15 budget cycle;

* cuts $4.8 billion in Medicaid and cuts nursing home reimbursement rates by 3%;

* counts more than $1 billion from unlikely federal waivers and other rosy scenarios;

* slashes higher education $1.5 billion, a 10 percent cut from current levels and $2 billion below what is needed to maintain than current services;

* eliminates financial aid for over 43,000 students, including 29,000 students who will lose their TEXAS Grant.

In addition, the legislature has done nothing to address the structural deficit resulting from the legislature’s failure to fully pay 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 balancing the budget by pretending we will get money from the federal government, 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.”

But this budget doesn’t come close to maintaining current services or accounting for inflation costs and the state’s population growth. As a result, it is just plain mean. (Didn’t Have to End This Way, Dallas Morning News, May 24, 2011)

Posted in: Press Releases