Dollars and Sense

When the Legislature meets in January, lawmakers know they won’t be able to cut their way to a balanced budget. Instead, they should do what a certain Republican governor did more than twenty years ago: raise taxes.
Dollars and Sense
The state capitol. 

When the Legislature meets in January, it will have a disaster to deal with—a record-breaking collapse in state revenue caused by the devastating global recession. Texas may be short more than $18 billion, roughly 20 percent of what we need to write a workable budget. We must figure out how to make ends meet. Given the size of the shortfall, though, one thing is certain: We cannot balance the budget through cuts alone without seriously damaging our children’s opportunities and leaving needy Texans unprotected. Instead, for state government to be able to do its job, we must take a balanced approach that includes new revenue.

Taking the contrary view, Paul Burka offered in his story “ The Eighteen Billion Dollar Man” a plan that he claims would balance the budget without hurting the state’s most vulnerable citizens and without new taxes. In fact, his plan would cut help for the needy, and he ignores the damage his plan would do to our economy. Worst of all, Paul gives comfort to those who mistakenly think that Texas can somehow balance its budget through cuts alone.

Our budget grows because population and costs grow. Over this decade, our population increased by almost 20 percent, or 4 million people. We have the second youngest population of any state, giving us lots of children to educate. And costs are going up. About a third of what state government spends is for health care, where costs go up much faster than consumer inflation. When the state budget does not grow to cover additional people and costs, we have to cut vital programs and services.

As a very low-spending state, we are long past being able to do more with less by adjusting priorities or increasing efficiency. Because Texas has budgeted carefully and tightly for years, we can’t balance our budget through cuts alone without seriously damaging the ability of state government to do its job. This is why politicians never have any specific ideas about how to save big bucks. Whatever adjustments or efficiencies we can identify will be dwarfed by the magnitude of our revenue shortfall.

Paul nonetheless suggests big cuts are possible with fundamental rethinking. For example, he proposes eliminating the Public Utility Commission, an agency he describes as engaging in unnecessary rate regulation. But Paul misreads the budget. Most of what he proposes cutting is actually assistance provided to low-income families for their utility bills. For each of Paul’s suggestions, once you have all the facts, you see that his hoped-for savings are illusory or damaging.

Consider education. Paul proposes to save almost half a billion dollars by delaying building new schools. But the money he identifies doesn’t pay for new schools; it pays for debt service on bonds for existing schools. For higher education, Paul proposes to cut more than a billion dollars, leaving it to public universities to cut programs or raise tuition. Tuition has already skyrocketed, putting college out of reach for many kids with good grades but no money. Paul’s approach to just slash doesn’t work.

Instead, to balance the budget, the Legislature must do what Texas families do. When Texas families face tough times, before they cut spending in ways that hurt their family, they use their savings and try to raise more money. The Legislature should

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