November 18, 2004
Two billion dollars

Two years after the ferocious budget-cutting of the 78th Lege, we still have a budget deficit.

"It looks to me like we're going to be short about $2 billion," said [Lt. Gov. David] Dewhurst, who presides over the Senate.

"That's a lot of money, and during all of the 1990s the Legislature was never faced with a shortfall like that," he said. But after the deficit of two years ago, he added, "Two billion dollars doesn't sound quite as bad."

Even with a shortfall, he said, "We're going to balance this budget. We're going to put more money into public education. We're putting more money into the Medicaid and CHIP programs. We're putting more money into adult protective services and child protective services.

"These are all critical needs."

Left unaddressed, of course, is how all of that is going to be paid for. Restoring CHIP funds seems to be a priority this time around (so sorry, Arlene!), and the Governor is running out of time to Do Something about school finance before he faces voters again, so the pressure to spend more is there. Broadening and perhaps increasing the sales tax, plus reforming the useless corporate franchise tax, two things which were verboten in 2003, may have to get a serious look in 2005. It's hard to imagine what else could be targeted for cuts, but I'm sure something will be held up as "wasteful". More and higher fees are a sure thing, and that $1/pack cigarette tax is pretty close. Finally, there's still the specter of more gambling - casinos, video slots at horse tracks and the like, and so on.

One thing to note: State Rep. Rob Eissler (R, The Woodlands), who has introduced a bill to increase the sales tax, gave as a justification for the increase the new federal law which allows sales taxes to be deducted from one's federal income taxes. Apparently, the Bush Administration is considering doing away with deductions for state and local taxes as a deficit-reduction measure. I rather doubt that will ever pass, for a variety of reasons, but its very specter might spook some legislators. Watch the rhetoric on this one.

There are, of course, other obstacles to school finance reform.

Gov. Rick Perry is serving notice that he wants to make more than funding changes in the public schools.

And he is armed with a new report from business advisers who want, among other things, to spend tax dollars on school vouchers, boost funding for charter schools and restructure the way teachers are paid.

Those proposals, strongly opposed by many educator groups and many Democrats, already are producing fireworks, two months before lawmakers convene Jan. 11.

Perry told a business audience in Dallas earlier this week that Texas has a once-in-a-generation opportunity to provide "meaningful reform" to public education.

He is expected to deliver a similar message today in an address to the Greater Houston Partnership.

Obviously, it's early days here, so until actual proposals are made one can assume most of this is trial ballooning. I'm just pointing this out as a reminder that an agreement to reform school finance is a long way from an agreement on how to reform it.

Posted by Charles Kuffner on November 18, 2004 to Budget ballyhoo | TrackBack