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February 20th, 2003:

Not every budget is feeling the pinch

While the City of Houston is $67 million in the hole, the County of Harris has $172 million in cash under its mattress. This, not surprisingly, has led people to grumble that the County takes in too much tax money for its needs:

“The county is so flush with money, it’s unreal. They have way too much money,” says Bob Lemer, the chairman of Citizens for Public Accountability, a local government watchdog and research group of retired accountants. “They’re very flush because they budget like crazy, but then don’t spend it by huge amounts.”

As an example, he cites the county’s fiscal 2002 financial report. According to the report, the county budgeted $114 million for road and bridge work, but spent only $44 million.

“I don’t buy into the idea that Harris County is efficient,” Lemer says. “They’ve got a revenue stream that is grossly more than they need.”

Not surprisingly, county officials disagree. Budget Officer Dick Raycraft and County Judge Robert Eckels point out that Harris County began including a 15 percent reserve in its annual budget in 1998, a goal borne of dismal experience.

“If we were not to budget those reserves, we could do more things, but the reserves are an important part of the fiscal health of the county,” Eckels said.

I can see both sides of this. How big a cushion does an entity need? I wish I could give some kind of answer to that question, but I can’t make heads or tails out of this thing, which claims to be the County Auditor’s Financial Report for Fiscal Year 2002. My non-accountant’s take on it says that the assets and liabilities balance out, and if that’s the case, then where’s the surplus? If this makes any sense to you, feel free to enlighten me in the comments.

Oh, and by the way: It was a bitch finding this thing in the first place. A Google search on +”harris county” +”commissioner’s court” takes you to this totally useless page. There are pages for each individual Commissioner linked on the Harris County home page (and am I the only one who finds it amusing that Robert Eckels’ page looks more like a campaign site than a government site?), but to find this report I had to find the County Auditor first.

As for the city, it’s just all confusing:

Although the city’s revenue over the next 17 months is expected to be $67 million less than projected, the city is not actually in the red. City officials still expect to end this fiscal year June 30 with a balance of about $81 million, slightly exceeding the required reserve of 5 percent of its operating expenses.

But almost all of that $81 million exists only on paper, in the form of revenue expected later in the year.

As for why the city’s finances are a mess compared to the county’s, an old bugaboo is cited as a cause:

To city Councilwoman Annise Parker, the difference between the two governments is largely one of philosophy: The city sees its responsibility as providing the best services it can, while the county provides only those services it can afford under its budget.

“I think there is more long-term thinking at the county,” she says.

Parker is not alone. Almost everyone interviewed for this article cited the county’s long-term outlook as the key to its current fiscal success. Such a philosophy is easier at the county because, without term limits, county elected officials tend to enjoy more stability. Until Sylvia Garcia took office as Precinct 2 commissioner last month, for example, there had been no change in the makeup of Commissioners Court for eight years.

Moreover, Harris County government is less bureaucratic, with elected commissioners having far more control over projects in their districts than do City Council members.

Because of term limits, city budget planners, mayors and council members come and go at least every six years.

Critics say term limits — combined with the city’s “strong mayor” form of government, which all but guarantees an adversarial relationship with council members — result in short-term thinking on long-range issues.

“In the city of Houston, everything is political,” said George Scott, president of the Tax Research Association of Harris County. “If it’s good for politics tomorrow, then it’s good. If it makes sense today, we’ll worry whether it makes sense next month or next year.”

Yes, it’s our friend term limits again. Not a single member of city government was in office the last time there was a roster change on the Commissioner’s Court in 1994. That has to have some effect. To be fair, you really can’t compare how the city works with how the county works. As the articles note, the county is limited by the State Legislature in what it can spend money on. In addition, the individual Commissioners have a lot more direct influence in their precincts, and they operate in a much more collegial environment that’s farther out of the limelight. That’s probably the biggest factor.

Where the rubber meets the road

We’ve been talking about budget cuts as the Only Acceptable Solution for the budget crunch for awhile now, so let’s talk a bit about what that’s actually going to mean. Two articles from today’s Chron give us some insight, starting with this one about the effects of proposed cuts on state universities:

The University of Houston’s president told legislators Wednesday the school would need to increase tuition and fees by as much as 50 percent to make up for money lost in proposed state budget cuts.

UH President Arthur Smith and other educators also predicted that a lack of funds might lead to staff cuts. Smith didn’t provide specific numbers, but University of Texas at Austin President Larry Faulkner said he might be forced to cut as many as 250 faculty positions and 300 administrative and support positions, and Lee Jackson, chancellor of the University of North Texas System, said the Denton campus might have to eliminate 200 faculty and 300 administrative slots.

“Faculty hiring will come to a stop, and staff reductions will begin,” Smith told members of the House Appropriations subcommittee on education. “Next year’s students will find fewer course sections and larger classes. Marked reductions in retention and graduation rates will come as early as the second year of the biennium (2005). Research productivity will decline significantly within two to three years.”

Mark Yudof, chancellor of the UT System, added, “We face one of the most extraordinary budget crises in the history of Texas. … There will be no free ride.”

And one for the law-and-order fans, about how there’s no more room in the prisons:

With state prisons nearing capacity and legislators in a belt-tightening mood, Senate leaders announced Wednesday that they are working on an emergency solution to find space for 4,000 more inmates.

But some lawmakers warned that the state cannot avoid future prison overcrowding if the Texas Department of Criminal Justice is forced to continue to cut its budget.

The state prison population is at 97.5 percent of capacity with 147,565 inmates. TDCJ spokesman Larry Todd said prisons are receiving an average of about 5,500 new inmates a month while releasing only 5,000.

We are going to stay ahead of this (crowding) problem,” Lt. Gov. David Dewhurst vowed.

The powers that be hope to put the problem off for awhile by shuffling people around and shortening the required stay in drug rehab from nine months to six. But other measures, ones that will undoubtedly be unpopular, are also being considered:

Dewhurst also indicated he may support an increase in parole of nonviolent offenders, if it could be done safely.

The parole rate, which had been averaging about 25 percent of those eligible, dropped to 17 or 18 percent several months ago.

“That’s one of the reasons why we’ve had an increased pressure on our prison beds,” he said.

Gerald Garrett, chairman of the state board of pardons and parole, said the board may accelerate its review of cases already slated for parole consideration and expand the pool to put more cases into the process.

Which is something I support, frankly. I’ve noted before that the prison industry is the only part of the Texas budget that’s above average in per-capita spending, and thus it’s the first place we should look for efficiencies. So this doesn’t particularly bother me.

Of course, as the story notes at the end, budget cuts will likely reduce the number of parole officers “to 1,100 from 1,600, increasing their caseload from 75 to 100 parolees per officer”, meaning that there will be less oversight of parolees and thus very likely a higher recidivism rate. Which just proves that not all cuts actually wind up costing us less.

Bad things you can do to pizza

From Brad DeLong:

Ann Marie, staring at a line on a menu offering kung pao chicken pizza: “I think we can safely say that fusion cuisine has gone too far.”

I think it’s the combination of hoisin sauce, peanuts, and mozzarella cheese that is distressing…

My parents once took some friends of mine and me out for pizza while I was in college. A couple of my buddies wanted to order a “Hawaiian” pizza that had Canadian bacon and pineapple on it. My folks still refer to this as an unspeakable culinary depradation. I shudder to think what their reaction would be to the aforementioned kung pao chicken pizza. I’m feeling a bit queasy myself.

Iraq can pay for its own reconstruction

From Yahoo News:

The Bush administration said Tuesday that it expects Iraq to pay for its own reconstruction in the event there is a war to oust Saddam Hussein.

“Iraq, unlike Afghanistan, is a rather wealthy country. Iraq has tremendous resources that belong to the Iraqi people. And so there are a variety means that Iraq has to be able to shoulder much of the burden for their own reconstruction,” said White House Spokesman Ari Fleischer.

“Our advice is to start by cutting taxes on dividends. We find that this allows you to pay for most everything,” Fleischer did not add.

Via Body and Soul.

It’s a great time to be a political consultant

Tim Fleck gives an overview of fat times in the local political consulting industry, thanks to the sure-to-be-a-record-breaker Mayoral race that looms large this November. First up, we see that Bill White is not letting his Democratic credentials keep him from going after Republican voters:

For instance, businessman and former state Democratic chairman Bill White has hired fund-raiser Herb Butrum, a veteran Republican consultant with ties to the Bush family who raised money for both Mosbacher and Sanchez.

Butrum predicts he’ll have no trouble tapping GOP sources to support his candidate.

“People understand the mess the city is in,” says Butrum. “More than anything, people want to see the city fixed, and that will trump most partisan feelings.

“For the city to come out of that, it’s going to take real business experience. That resonates with Republicans regardless of party labels. Bill has always been viewed as a real uniter and a very smart guy.”

Asked whether he can deliver GOP movers and shakers to White, Butrum says a number of people already on the team are “very, very close to the Bushes and the Perrys of this world.” He expects that the White campaign will unveil a high-powered battery of GOP supporters in coming months.

We’ll see if the Democrat-who-can-appeal-to-Republicans act works any better for White than it did for Chris Bell and George Greanias. I think it’s more likely to annoy Democrats and amuse Republicans, but if you’re a guy with a big bankroll, actual credentials, and no obvious base of support, I guess you have to do something.

This bit I’m still trying to understand:

The conservative Republican team of Allen and Elizabeth Blakemore is handling hyperambitious Councilman Michael Berry’s mayoral campaign, although a lot of smart money is betting that Berry eventually runs for controller instead. Berry could draw away attention and support from Sanchez in the early going while roughing him up with hardball attacks behind the scenes in the conservative community.

Allen Blakemore certainly has the connections to do that, since he is joined at the hip to right-wing activist Steven Hotze and his church-based political network. In any case, the rivalry between Sanchez and Berry for Republican votes also creates a mini-soap opera pitting the Blakemores and the Waldens against each other. (Social note: These two tandems have never been particularly fond of each other and should not be included on the same dinner party list.)

The Waldens are Dave and Sue, mentioned elsewhere in the article. I don’t get why the Blakemores have hitched their wagon to Boy Wonder Berry. He’s certainly no more conservative than Orlando Sanchez, he’s even less experienced in city government, he has no realistic chance of winning, and he could siphon off just enough support from Sanchez to let White and Turner in to the inevitable runoff, an outcome which I’d think would make most GOPers grind their teeth. Maybe it is just a bluff and he really wants to be comptroller, but again, there are other conservative Council members who would seem to be more attractive to the Blakemores (I’m thinking Bruce Tatro especially). Can any of the local Republicans help me out on this one?

No mention in this article of Chief Bradford. The Chron‘s John Williams had an amusing roundup of what-they-said/what-they-meant from each campaign’s main flack regarding a possible Bradford candidacy. If that’s accurate, then as a Bill White supporter I ought to start encouraging the Chief to toss his hat in.