Rainy Day Fund OK for Water, Roads & Schools

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Last week I told you about SJR 1, legislation to take $6 billion from the Rainy Day Fund and invest it water and transportation projects. I was wary of using the Rainy Day Fund solely on water and transportation and said we had to use money from the fund to restore the disastrous cuts to public education enacted in 2011.

Happily, I actually have some good news to report on that front. On Tuesday, we were able to get an additional $800 million for our children’s schools — $500 million for school funding and $300 million for merit pay raises for top-rated teachers. I supported plans to draw down even more from the Rainy Day Fund for education – $2 billion – but believe this plan is a good down payment for our kids. When combined with the added funds in the 2014-15 budget, approximately $3.7 billion of the $5.4 billion cut from our children’s schools will have been restored.

Overall, the Senate voted 31-0 to add $2.9 billion for transportation projects, $2 billion for water projects, and $800 million for Texas schools. The proposed constitutional amendment now goes to the Texas House for consideration and, if passed there, will then go directly to you, the voters.

I hope that the House finds the will to add even more funding for our kid’s schools, because I believe we need to do more than just restore the cuts from last session. Even before the cuts, Texas invested far too little in our children’s future. In 2011, we ranked 44th in per child school expenditures; today, we rank 49th , behind Mississippi, Louisiana, Arkansas and Alabama but ahead of Nevada. Even with budget increases and the added money from the Rainy Day Fund, per student spending in FY 2014 will remain lower than in FY 2012, the first year of the budget cuts.

We can – and must – do better. I hope the Texas House improves on the plan the Senate has approved.

Will Keep Fighting to Invest in Health Care

Unfortunately, my amendment to use a tiny portion of the Rainy Day Fund to help improve the health of tens of thousands of Texans failed to get added to SJR 1. My proposal would have drawn $50.4 million from the Rainy Day Fund to draw down $4 billion in federal funds and make the first steps in expanding Medicaid under.

Texas has the highest uninsured rate in the nation, with 1 in 3 Texans lacking any health insurance at all and, according to a new report, 54 percent lack any meaningful coverage. There are more uninsured in Texas – 6,080,000 — than the entire populations of Alaska, Delaware, the District of Columbia, Montana, North Dakota, South Dakota, Vermont and Wyoming combined – 6,021,410. And our Medicaid program currently spends less than the national average per enrollee and also reimburses doctors, hospitals and other providers less than the national average.

Providing health care access to 1.5 million Texas does not just make moral and social sense, it makes economic sense. Two recent studies show just how good a deal expanding Medicaid would be for Texas. According to an economic analysis by the Perryman Group, Texas would see a return of $1.29 for every $1 spent on Medicaid expansion, and the burden on local governments would be reduced by $1.21 for every dollar the state spent expanding the program.

According to conservative estimates conducted by Billy Hamilton, the full amount of savings from expanding Medicaid and drawing down this enhanced match could be almost $1.2 billion dollars in general revenue. Perryman further estimates that Medicaid expansion would generate over 300,000 Texas jobs per year on average over 10 years, even after netting out the impact of diverting the state’s required matching contribution. Furthermore, Billy Hamilton Consulting projects economic activity from the ACA Medicaid expansion would generate an estimated 231,000 jobs by 2016, and several times that number in later years.

Expanding Medicaid will reduce Texas hospitals bills for uncompensated care. Currently, hospitals absorb more than $5 billion per year in uncompensated care, a loss that is passed on in the form of higher prices, as well as a direct tax in areas that have hospital districts. In fact, expanding Medicaid to cover those eligible but uninsured Texas will cost us less in four years than what Texas hospitals spend on the uninsured population in one year.

For a total investment of $15 billion, Texas could draw down as much as $100 billion in federal funds and expand health care coverage to 1.5 million low-income Texans over 10 years. The feds will cover 100 percent of the costs for expansion for the first three years, and then gradually reduce to 90 percent thereafter.

This issue is too important to ignore. My initial down payment plan failed, but I will continue to look for any and every conceivable way to drive the debate for Medicaid expansion. We have the need and we have money; we just need the will to do it.

Texas cannot afford to do nothing.

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