The Bloody Billion
There’s English at the Capitol these days as politicos try to ax $1 billion from the state budget. Here are the boondoggles, sacred cows, and hidden fat they ought to cut—but won’t.
There aren’t many smiles in the corridors of the Capitol these days. The Legislature has to slash the state budget by $1 billion, and to make matters worse, the Quorum, everybody’s favorite watering hole, has been sold. On the third floor, supplicants from the state agencies and colleges gather outside the hearing rooms, their faces drawn and anxious. Legislators passing by avoid eye contact with the crowd, like jurors who have already condemned the defendant in their minds.
Numbers alone cannot explain the emotional toll exacted by the budget crisis. Texas is, after all, a low-tax state—forty-fourth in taxes paid per capita, and next to last in tax effort, which measures how much of its potential revenue a state is currently raising. What really accounts for the tension in the Capitol is much the same question that confronted the country as a whole in the late seventies: Is this the twilight of our glory? Or, in Texas terms: Is the boom over for good? Is this the end of the oil era? What will become of us?
To raise taxes is to admit defeat, to concede to diminished expectations. But cutting won’t be easy, for four reasons:
1. Politicians love to talk about fat and waste, but they hate to cut budgets. Every item has a vocal constituency. Cutting makes people mad. Spending makes people happy. Politicians have longer careers when people are happy.
2. You can’t cut the Texas budget without affecting the basics. Education, employee and teacher retirement, and the Big Three agencies (highways, prisons, mental health and mental retardation) account for three fourths of the money.
3. The budget is an intimidating document. Very few legislators even know how to read it, much less what’s in it. And they get no help from the bureaucracy; when money is on the line, candor disappears. The three big lies of the budget process are “We’re already cut to the bone, Senator,” “This program actually makes money for the state,” and “This is one of the most important things the state does.”
4. Every legislator fears that his district’s pet projects will be the first to go. That’s why most legislators seek sanctuary in across-the-board reductions, even though the effect is to cut the essentials and perpetuate the fat. Thus budget writers have handed the Legislature a proposal that decimates faculty salaries at all state universities but ignores the question of whether the state should maintain two universities in Denton.
What might a budget look like if the Legislature put politics aside (ho, ho, ho) for just one session? Here is a proposal for cutting $1 billion by eliminating the frills, waste, fat, and pork barrel while keeping the basics intact—especially higher education, so vital to a Texas without oil. I have added one touch of political realism, though. I’m not going to make cuts in Galveston, my hometown. Galveston has already been cut to the bone, it makes money for the state, and it includes some of the most important things the state does.
I. Vestiges
One of the more curious items in the proposed state budget is a $423,273 appropriation in 1987 for the Texas Sesquicentennial Commission. The sesquicentennial occurs in 1986.
This is a vestige in the making. Some parts of the budget reflect the Texas of yore—poor, rural, even ignorant—rather than the Texas of today. Yet these items take on a life of their own, swallowing up money in perpetuity, though the problems they were designed to solve long ago ceased to exist.
Target: Merit System Council
Recommendation: R.I.P.
Savings: $2.3 million
The council is supposed to make sure that Texas has merit-based personnel management system that conforms to federal standards, whatever that means. It doesn’t matter. Two year ago the feds stopped requiring states to have one. That didn’t prevent the agency from requesting a budget increase.
Target: National Guard and National Guard Armory Board
Recommendation: Unilateral disarmament
Savings: $18 million
Why do we need a state militia? Pancho Villa is dead. State troopers can handle disasters. Restoring order to the East Texas oil field, the Guard’s last mission, hasn’t been necessary since 1931. Today our National Guard plays solider in Honduras, while the State Guard recruits Yankees with the lure of cheap tuition at state colleges. The feds probably won’t let us get rid of the Guard, but we don’t have to pay for it with tax dollars. Enter the armory board. It maintains 143 armories across Texas, many of them on valuable urban land. Relocate the armories, sell the sites, and make these anachronisms self-supporting.
Target: Agriculture Department
Recommendation: Cut marketing 75 per cent
Savings: $8 million
A group of conservative legislators will be out to pare Jim Hightower’s budget this session. They’ll be doing the right thing for the wrong reason. With them, it’s personal. With us, it’s business. Try as he might, Hightower can’t change the fact that the Agriculture Department is the most visible vestige in state government.
Take the marketing program. It is really a public relations program, mainly because the state has no ability to influence marketing in a meaningful way. Once it was designed to get consumers to buy more Texas products, like eggs. Well, we all know where eggs come from. They come from Safeway. Reagan Brown, Hightower’s predecessor, may not have been very smart, but he had enough sense to know that the marketing program was useless, so he turned it into a self-promotion campaign.
Perhaps the agency deserves a little money to help make consumers aware of new Texas products, like wine. Still, why should the state finance PR for farmers but not for, say, oil companies, which are less loved and more important to Texas’ economy?
Target: Prison system freebie groceries
Recommendation: Lock the pantry
Savings: $3.5 million
More than a thousand Texas Department of Corrections employees get free groceries for two from the TDC’s agricultural program. This goody is a double vestige, in that it reflects the days when state employees were badly underpaid and also when the prison system ran things as it damn well pleased. Today TDC salaries range from close to the national average to well above it, and TDC benefits—free housing, free laundry, and special retirement pay, to name a few—are among the best in the nation. Yet the food perk lives on, even if the TDC did have to buy $1 million worth of groceries on the open market last year to keep it going.
Target: Transportation regulation
Recommendation: Deregulate
Savings: $9.3 million
When Texas was a poor state, the Railroad Commission, like the rest of state government, did what it could to nurture homegrown business. In the case of trucking, that meant keeping out the out-of-state competition. This was the sort of policy that used to drive Texas liberals mad, as they heard paeans to free enterprise from the same folks who were granted monopolies by the government. By deregulating trucking, the Legislature could cut $4.5 million from the Railroad Commission’s budget. Another $4.8 million is there for the taking from railroad regulation, which the feds have preempted anyway. Stick to oil and gas, fellas.
Target: Good Neighbor Commission
Recommendation: Adios
Savings: $420,762
The commission was created in 1943 after Mexico, angry over the bad treatment of Mexican workers in Texas, refused to let the state participate in U.S.-Mexican contract labor negotiations. At first the commission made enough noise about discrimination that a state senator tried to have the agency abolished. Who then could have foreseen Henry Cisneros or ballots in Spanish or MALDEF or bilingual education? The only thing that hasn’t changed is that the agency is still hard to get rid of.
Target: Governor’s Commission on Physical Fitness
Recommendation: Take a hike
Savings: $296,470
The commission dates back to 1971, when Texans still had the good sense to spend their lunch hours eating barbecue instead of jogging. Do we really need an agency like this during a budget crunch?
Target: Texas Forest Service
Recommendation: T-I-M-B-E-R
Savings: $17.2 million
There was a time when East Texas was a filed of stumps, its forests ravaged by out-of-state timber companies. The small farmers who owned the land had neither the money nor the know-how to reforest the land. Thus the reason for the creation of the Texas Forest Service—seventy years ago.
Today the Forest Service still helps landowners manage their timber. It also provides rural fire protection, something the state supplies nowhere else in Texas. But this isn’t 1915. The small landowner is gone, replaced not only by huge timber companies but also by tax-shelter types and other absentee owners. Only 7 per cent of the agency’s reforestation clients in 1984 were true timber farmers. More than half of the remainder were corporate executives, doctors, lawyers, and other professionals. The Forest Service is providing welfare to the rich. Either it ought to pay its own way or the state should heed the slogan of the Northern timber companies back in 1915: cut and cut out.
Target: Securities regulation
Recommendation: Relax the regs
Savings: $2.2 million
The state’s standards for regulating securities far exceed the federal Securities and Exchange Commission’s full-disclosure policy. Why? Because when Texas was an unsophisticated state crawling with fly-by-night oil promoters, investors needed all the protection they could get. But things have changed. If the Legislature brings Texas in line with the SEC, it could cut regulatory costs in half.
Target: San Antonio Chest Hospital
Recommendation: Sell to Hospital Corporation of America
Savings: $18 million plus the sale price
Back when tuberculosis was a major health problem, the state set up four chest hospitals to treat TB victims. The disease is no longer a major threat, but two of the chest hospitals survive, even though only 22 per cent of their patients suffer from tuberculosis. To fill the beds, the state has slowly slipped into the general hospital business. That may not be such a bad idea in Harlingen, since South Texas has no other hospital for indigents—unlike San Antonio. The state should transfer San Antonio chest patients to Harlingen and cash in the hospital.
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