On Wednesday, the Texas Senate passed their version of a job-killing, fiscally irresponsible budget bill.
A majority of the Texas Senate took advantage of a seldom-used procedural device to pass the Senate’s budget plan today. The 19-member Republican majority, opposed by a solid bloc of all 12 Senate Democrats, first dumped a part of the bill that would have tapped the Rainy Day Fund for $3 billion to reduce budget cuts. Then the majority rammed through the budget and sent it on to the Texas House, which has already passed an even worse budget for 2012-2013. The two versions now must be reconciled.
The budget bill did not pass without first coming under fire from a number of senators who eloquently described the damage this budget proposal would do by “putting the next election ahead of the next generation,” as Sen. Eddie Lucio, Democrat of Brownsville, put it.
Senator Rodney Ellis of District 13 had this to say:
Unfortunately, the leadership chose to make painful cuts and refused to address systemic challenges. Worst of all, the Senate budget cuts $11 billion from our children's schools, from our children's and seniors' health care and more, while leaving over $6 billion sitting in our savings account, the Rainy Day Fund.
That was the choice they made, and now they are responsible for the results.
Does this budget close the door to college for thousands of Texans? Yes.
Does this budget close our children's schools? Yes.
Does this budget put the elderly on the street? Yes.
Does it have to be this way? No.
Could we use a few billion more of the Rainy Day Fund to avoid eliminating thousands of jobs? Yes.
Could we get billions to save vital services, simply by closing wasteful loopholes? Yes.
Could we fix the broken and inequitable business tax? Yes.
Are we going to do it-Of course not.
Instead of finding more revenue, Texas has chosen to irresponsibly cut vital services for Texas families to the bone. We don't have to cut so severely. Those in charge are choosing to sacrifice our children's educational opportunities and kick the elderly out of nursing homes, while continuing multi-million dollar corporate giveaways.
We've constantly heard that, in these tough times, our state ought to act as responsible families sitting around the kitchen table, tightening their belts and making tough economic decisions, and I couldn't agree more. Texas is one big family. We're all in this together, and a responsible family doesn't decide to let their children go hungry, or put grandma out on the street, or not help a sick child just because dad doesn't want to dip into his yacht fund. A responsible parent doesn't just decide to cut off electricity, the water and the phone; they go out and get a second job or hold a garage sale. They find more revenue. They figure out a way to make it work. If we're broke, we don't take a cuts only approach and tell little Johnny, "sorry, you don't get to go to college." We hunker down and find a way to make a little more.
We're a family with a huge plate of food, enough for everyone to eat, it's just that one family member is eating 4/5 of the plate while four others are getting crumbs and being told to tighten their belts and stop complaining.
Let's be clear: nobody elected [congressmen] to close nursing homes and leave vulnerable seniors with nowhere to go. Nobody elected us to cut billions from neighborhood schools, crowd our children's classrooms, fire quality teachers, and make a college education unaffordable and out of reach for Texas families. Nobody elected to eliminate thousands of jobs for working Texas families struggling to make ends meet.
And the truth is we don't have to. We can act responsibly and bring in new revenue and get rid of tax loopholes that rip-off Texans and benefit those already making out like bandits. We can use our savings account for the purpose it was intended. We can show the leadership to address the structural deficit now.
But we chose to take the easy, politically safe way and make Texas families and schools pay the price.
Earlier Filer Giveaway
We could have ended huge giveaways to business, like the early filer tax break. Texas gave retailers a tax break of over $200 million last year simply to file their sales tax on time. We gave them another $200 million to file them early, and we gave another $65 million to businesses who pay their fuel taxes on time. There shouldn't be such a huge reward for doing what you are required to do.
Natural Gas Giveaway
We could have eliminated the so-called "high cost" natural gas tax loophole. Texas gave away over $7.4 Billion in tax giveaways from 2004-09 to natural gas producers who already profit in the billions, because their lobbyists have been able to maintain an antiquated definition of "high cost" gas in the code. From new drills established in 2009 alone, we will lose another $7.9 billion over the next 10 years.
This 'tax incentive' was created in 1989 to help companies with the costs of drilling high cost wells, which made sense then, but now virtually every new well produced is a so-called 'high cost' well. Mom and Pop producers are not getting this tax break, major oil companies are. One huge oil company saved $113.8 million in FY 2010, while reporting net profits of $4.6 billion. A subsidiary of another of the world's largest oil companies saved $113.2 million.
Rainy Day Fund
We could have used the Rainy Day Fund -- our savings account -- to spare cuts our kids, our seniors and our schools. The Rainy Day Fund was created for budget challenges exactly like we face today. And, because of rising oil and gas prices, the Rainy Day Fund sits at $9.4 billion; yet we are now choosing to leave all of our savings virtually untouched.
Those opposed to using more of the Rainy Day Fund say that times might be bad next session. Texas has spent nearly every penny of the Rainy Day Fund on four occasions, including as recently as 2005, a year in which we had a strong economy and a stable budget and in 2003, the last time we faced a significant shortfall. In fact, in 2003 $295 millionwas taken from the Rainy Day Fund to create the Governor's Texas Enterprise Fund and, in 2005, millions more were diverted to create the Emerging Technology Fund.
Leaving billions in our savings account while nursing homes and schools are closed and tens of thousands lose their job is simply unacceptable. Since taxes on oil and gas revenue are what replenishes the fund, it will quickly gain back the funds we use to stem the tide during this crisis.
Structural Deficit Remains
We could have addressed the structural deficit. The truth is that most of this deficit has nothing to do with the economy. It's because the margins tax simply did not raise enough to offset property tax cuts we promised. And it's no fluke occurrence. We knew this when it passed in 2006.
Standard & Poors recently wrote about our budget situation:
Indeed, we believe many of Texas' current budget challenges are the result more of previous fiscal policy decisions that created structural budget deficits, than of a weak economy. (Texas' Budget Challenge, Standard & Poors, February 16, 2011)
The comptroller testified before the Senate Finance Committee the state would face a $10 billion shortfall every two years if we do not fix the state's tax structure. So doing nothing is not feasible, but that is what we have chosen to do. Having the moral courage and determination to fix this problem now would mean fewer cuts this session and would keep us from being right back here next session.
But somehow, sacrificing our children's educational opportunities and kicking the elderly out of nursing homes, so we can to continue multi-million dollar corporate giveaways to special interests, is being portrayed as responsible governing.
Cuts to programs which help Texans over enacting systemic change: that is the choice this legislature has made.
Texas Ranks Low in Helping Families
Texas is ranked 46th in tax revenue raised per capita and 50th in tax expenditures per capita. This is not an overspending problem. We rank 38th in current expenditures per student; 44th in state & local expenditures per pupil in public schools; 37th in percentage of school funding from state revenue; 45th in SAT scores; 49th in percent of population who have graduated from high school.
We have the highest percentage of overall uninsured -- and of uninsured children -- in the nation; we have the fourth highest percentage of children in poverty. The highest percentage of uninsured seniors, and 49th in the percentage of our low-income population covered by Medicaid. Per capita, we rank 50th in spending on mental health, 49th in Medicaid spending and 45th in total health care spending.
Texas is already at the bottom in what we provide to the people of the Lone Star State; today, we have decided to do even less and make life that much more difficult for those already struggling to get by. It's a road map to a third world economy.
Texas AFT President Linda Bridges also had something to say about the proceedings in the Senate today. Here’s her statement:
“Today a majority of our Texas senators joined their House counterparts in helping make history--of the worst kind--while sowing the seeds for a bleaker future for our state. This is the first budget bill in more than 60 years that has not funded new enrollment for Texas public schools. That's 80,000 to 90,000 more students each year streaming into underfunded schools and facing the damage done by the $5 billion plus in public education cuts in this budget.
“The Senate budget means our students will have fewer teachers, larger classes, and fewer support services for those most in need. And with this awful budget proposal as its starting point, the Senate majority moves the budget debate toward the even more extreme level of cuts in the horrendous House budget plan--all while leaving $6 billion dollars in the Rainy Day Fund. The consequences of this failure of leadership will be felt for decades unless lawmakers from both houses have the courage to do better.”
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