Assessing the Vetos: The Line Items
Mon June 25, 2007 8:18 am

The most important line-item vetos involved higher education. I presume everyone is well aware of Perry’s belief that special items are pork. The best counter-argument I can offer is that they are good pork–pork loin instead of bacon–but it is hard to argue the fundamental issue. Perry’s veto messages about bills often border on the nonsensical. He vetoes so many bills that do no harm and probably do a little good–pilot programs, studies–that one gets the sense that he is more interested in putting notches on his gun than in public policy. Higher education funding is a different story. His signing statement for HB 1 is a well crafted document. It ought to be taken seriously, and not just in the area of higher ed. Perry lays bare some of the hanky panky that has been going on here since the eighties–the manipulation of fiscal notes, for one, and the diversion of revenue, as from TxDOT to DPS. Budget writers are going to have to deal with this in 2009, especially in higher ed. Perry threatened to veto Article III this session and he says in his statement that he is more persuaded than ever that higher education funding is flawed. I would feel a lot better about Perry’s scrutiny if he had ever demonstrated that he was a true friend of higher ed, and I am concerned that he is more focused on the little picture than the big picture. Still, I can’t defend some of the things the Legislature has done, like the tuition revenue bond frenzy (grade A pork, and mendacious to boot–TRBs are not strictly revenue bonds; they obligate GR); the creation of new institutions by influential legislators; and the excessive use of special items.

Here are the vetoes. I have rounded the amounts:

$2.2 million for administrative expenses for the Texas Building and Procurement Commission. My quarrel is not really with Perry here; it’s with the Legislature. They transferred the agency’s procurement functions to the Comptroller. Putting an elected official in charge of procurement is asking for trouble. They won’t get it from Susan Combs, but somebody will go to jail some day.

$297 million for Medicaid Federal Giveback. This cuts all funding for the second year of the biennium. Perry believes the funding is “unnecessary.” The federal government believes we owe them the money. Guess who is going to win. We’re just going to have to pay it back in future years.

$154 million for employee health insurance in the second year of the biennium. Perry’s veto message cites a rider: “[T]he funds appropriated by this Act out of the General Revenue Fund may not be expended for employee benefit costs, or other indirect costs, associated with the payment of salaries or wages if the salaries or wages are paid from a source other than the General Revenue Fund.” Community colleges have been submitting their budget requests as though everyone were paid with general revenue, which is not true. (Tuition is the other main source of revenue.) Budget writers know this, but they continue to fully fund health insurance as if all employees were paid with GR. Until now, no one has complained. Community colleges are under the gun. Many face declining enrollments, attributed to a healthy economy in which jobs are available. Perry’s veto won’t mean that employees will be without health insurance. It will mean that community colleges will have to raise taxes and raise tuition. This was a terrible veto.

$3.3 million for new community colleges. When Perry gets mad, he stays mad.

Fourteen “special items” for state universities. The Legislature funded 36 special items in a format that allowed gubernatorial vetoes. Twenty-two survived. UT Southwestern Medical School received $19 million for obesity, diabetes, and metabolism research. Some of the items Perry cut really did look like pure pork, especially $4 million for the Texas Tech, Texas State, University of Houston, and University of North Texas systems for “system operations.” The largest cut was a $5 million student success initiative at Texas A&M International University in Laredo. Perry’s veto message read, “This university already receives a disproportionate share of special items and excellence funding. Special Items represent 48.3 percent of its total general revenue budget, less tuition revenue bond debt service, compared to the university statewide average of 18.4 percent. If this initiative is a priority, the university can use its $31.3 million appropriated for Institutional Enhancement.” Hometown senator Judith Zaffirini was appalled. In an interview with the Laredo Morning Times, she said the veto was “a slap in the face,” adding, “It’s just beyond belief that he would make such a hostile statement in his veto message.” TAMIU’s president told the Times that the funding would have been used “to recruit and retain first-time students; create an outreach program to boost math and science learning at middle schools; develop collaborative degree programs among TAMIU, other universities and health science centers.” The Morning Times story is quite good. Tricia Cortez, the reporter, interviewed A&M chancellor Mike McKinney:

“McKinney said he spoke with the governor and his staff this session about special items and was told that each special item must address how it meets the state’s Closing the Gap goals.

“Adopted in 2000 by the Texas Higher Education Coordinating Board, Closing the Gap refers to improving student participation, student success, excellence and research in universities.

“One key issue is finding ways to drastically boost the enrollment and graduation rates of students from different racial, ethnic and disadvantaged groups.”

The Student Success Initiative directly addressed recruiting and retention of students and improvement of math and science skills in middle school. Yet, Perry vetoed it, ostensibly because the university gets so much of its funding from special items. Or, he may have been peeved at Zaffirini’s failure to advance his higher ed proposals during the session, or perhaps by Laredo’s overwhelming support for Tony Sanchez in the 2002 governor’s race.

Perry really nailed South Texas. He also scotched $3 million for the UT Health Sciences Center in San Antonio. His reason: “[B]efore the state makes the investment required to create more tier-one research institutions, we need a long-term vision and plan. The select commission on higher education and global competitiveness created by House Concurrent Resolution 159 is charged with drafting a Texas Compact that reflects a long-term vision and a step-by-step plan to attain specific goals.”

$40 million for the Texas Department of Criminal Justice for contracted temporary capacity and for other support services. The Legislature increased TDCJ’s funding by 10% at a time when inmate population was expected to grow by only 2%. Legislative staff who are familiar with the “support services” issue registered concern that, due to the budget cuts of 2003, TDCJ remains understaffed. Correction officers are staffing mail rooms, and TDCJ’s antiquated record-keeping system needs to be upgraded. The veto will cause “hiccups” in the system.

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