The Amarillo Globe News today features an op-ed piece by Governor Perry defending his veto of some $153,979,799 in health benefits for community college employees. Many Republican lawmakers are upset by this veto; Phil King told me that he is concerned it will hurt the party in the ’08 elections. Perry would not have penned this explanation had he not been getting a lot of heat over the. The following excerpt from the editorial contains the heart of Perry’s defense:
Unlike larger universities with a statewide reach, community colleges serve the needs of a specific local area. As such, they are empowered to raise taxes from the population they serve, not unlike a local hospital, school or utility district. These community colleges then pay their employees from either these local taxes (combined with tuition and fees) or state funds which are allocated by the Legislature and collected from all the taxpayers in Texas.
State law clearly dictates that any community college employee paid with state funds can have his or her health insurance paid the same way. However, state law also says that if a community college employee is paid from locally raised funds, his or her health insurance must also be paid from that same local source.
I fully support this sensible dividing line between funding sources. If the state pays an instructor’s salary, then the state also should fund his or her health benefits. However, I don’t support the notion that all Texas taxpayers should cover the health benefits of those local community college employees who are not paid by state funds. This would be akin to the state of Texas paying the health insurance of a local city councilman or a county commissioner.
Unfortunately, this is exactly what has been happening. And this is precisely the reason I vetoed a portion of community college health insurance funding for the 2008-2009 biennium.
The concept of a “dividing line between funding sources” is known in budget jargon as “proportionality.” When Perry said that there is a state law that requires employees paid with institutional funds (tuition, fees, and taxes) to receive their benefits from institutional funds, he was referring not to a statute but to a budget rider. For Perry to call a budget rider a law is a stretch. It is a legislative directive. There are no sanctions for failure to comply (although the Legislature–or the governor–may punish the offending agency in future budgets). In any case, the violator of the rider was not the community colleges, but the Legislature itself. Judith Zaffirini, the Senate conferee charged with funding higher education, told me that budget writers, knowing full well what they were doing, ignored their own rider requiring proportionality and fully funded community college health benefits with state funds.
Now, why would they do something like that? The short answer is that the Legislature understands the importance of community colleges. Around 70% of the students who continue with the education beyond high school are in these institutions. To enforce proportionality would strain their ability to do their academic mission. Their boards would have to raise taxes, which local taxpayers would blame on the Legislature, or increase tuition and fees, which could force some students to drop out. The Legislature has chosen to ignore proportionality and fully fund health benefits instead. Now, Perry–who, as everyone knows, generally opposes tax increases (the business margins tax being a notable exception)–has, with his veto, put many community colleges in the position of having to raise taxes and tuition.
Perry has been a strong advocate of truth in budgeting, and rightfully so. But there are some things that are more important than truth in budgeting, and one of them is community college education. The Legislature had the right priorities. I would say that Perry can’t see the forest for the trees, but that’s not the problem, exactly. It’s that he thinks he’s looking at big trees, but it’s just brush.