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January 11th, 2011:

A few thoughts from Opening Day

Just a few random bits from today’s festivities…

– In the end and despite the teabagger footstomping, the Speaker’s Race turned out to be a big nothingburger, which was what most rational people expected all along. There were a few deadenders, mostly Republican freshmen, who voted against Joe Straus. I can’t wait to see what kind of committee assignments some of them get, not to mention how they get treated in redistricting. Anyway, despite some speculation that they might get wooed by Team Paxton, in the end all the Democrats voted for Straus. At least they all knew enough not to go putting “Kick Me!” signs on their own posteriors.

– Putting it another way, what Harold says.

– Senate President Pro Tem Steve Ogden lays out the budget situation as he sees it. On the plus side, I am glad to see him call for reform of the business margins tax, with the apparent goal of generating more revenue. On the minus side, anyone who thinks the federal government needs a balanced budget amendment is either economically illiterate or doesn’t care that we’d have 15% or higher unemployment right now if we lived in such a world. Neither is a particularly comforting trait for a budget writer to have.

– Oh, and Ogden’s assertion that “It is impossible to balance the budget without making cuts in (education and health and human services)” is of course wrong. We can most certainly choose to raise enough revenue to do it, though I’ll agree that long term something needs to be done about Medicaid costs. (Like federalizing the program, just to pick one possibility.) The political will absolutely does not exist for this, but the point is that it’s a choice, not a physical law, that is forcing that course of action. It’s a choice the Republicans are making.

– Still having said all that, Ogden is much more in touch with reality than our Governor.

– Speaking of which, Rick Perry’s top priorities for this session are eminent domain and “sanctuary cities”. I wonder if anyone has informed Aaron Pena about this.

Robert Miller predicted that the Senate’s traditional 2/3 rule would remain unchanged. Paul Burka suggested it might be tweaked to be a 3/5th rule as desired by Dan Patrick. According to the Quorum Report, the Senate has put off deciding its rules till tomorrow, with Patrick saying he doesn’t have the votes to make his preferred change. However, it strikes me as entirely plausible that certain legislation, such as a voter ID bill, will be exempted from the 2/3 rule, as was the case last year. We’ll know soon enough.

– Finally, for those of you who are wondering what life is like in the alternate universe where Bill White was elected Governor, here’s an email he sent out to his campaign mailing list:

The Texas comptroller announced yesterday that next year’s state budget shortfall, already tens of billions of dollars, will be $4.3 billion more because Texas has been running an operating deficit for its last two fiscal years. Cuts of twenty to thirty percent in higher education are being discussed in Austin right now.

Please click on this link to an article describing why improved and more accessible higher education is critical to the future of Texas and showing where Texas ranks relative to other states and countries: DMN: Employment growth and higher education by Bill White.

For the first time, young Texans are less educated than the generation of their parents. Cuts in public universities and community colleges will hurt Texas’ long run competitiveness for high wage jobs, where we have already fallen behind at current funding levels. More detail can be found in the 2009 Report of The Select Commission on Higher Education and Global Competitiveness.

You can share your concern by writing or emailing your local newspaper expressing your views on the importance of investing in education. Texas is a great state with great people and prospects. And certainly we can always spend public money more efficiently. But we should not miss the opportunity to prepare for a future with better education and training, resulting in rising incomes and greater opportunities.

So now you know. Not a whole lot else of interest is likely to happen until committee assignments are given out, so we get a little bit of calm before the storm. After that, the level of action will make “Deadliest Catch” look like a paddleboat ride at Hermann Park. Buckle up now and get ready.

UPDATE: Adding in a few opening day emails, from the Texas League of Conservation Voters, Planned Parenthood of the Gulf Coast, and Equality Texas. In addition, here are a couple of worthwhile press releases that respond to Governor Perry’s wacked-out priorities. First, from State Rep. Mike Villarreal:

Today Rep. Mike Villarreal expressed his dismay and concern about Governor Rick Perry’s official proclamation giving emergency status to divisive immigration legislation.

This rare first-day move by the Governor allows the Legislature to take up immigration within the first 60 days of the legislative session. The decision to put immigration legislation on the front burner ignores the true emergency faced by the Texas Legislature – the $27 billion shortfall announced by Comptroller Susan Combs the day before the session opened.

“Once again, the Governor demonstrates that he is a masterful politician.” said Rep. Villarreal. “Just when the public begins to learn that the state’s financial crisis is worse than California’s, he distracts us with a controversial issue that ultimately cannot be resolved by the state.”

“Texans deserve a state government that puts responsible governance over scoring political points,” Rep. Villarreal said. “Doesn’t he know the election is over? He won. Now it’s time for him take responsibility for our schools, our jobs, and the financial crisis he helped create.”

And from State Rep. Armando Walle:

Today State Representative Armando Walle (D-Houston) was sworn in to the Texas House of Representatives for his second term. After hearing Governor’s Perry’s call for emergency action on eminent domain and sanctuary cities, Rep. Walle released the following statement:

“The most pressing issue facing the Texas legislature is addressing the $27 billion shortfall that the Republican leadership has created and failed to address. Balancing the budget on the backs of uninsured children, the elderly, and hardworking everyday Texans is not the kind of approach that will make Texas stronger for future generations. The Republicans are driving the car, and we need to work together to get it out of the ditch. Running over the most vulnerable Texans is not the way to move Texas forward.

I find it very ironic that the Governor who brought you toll roads and Trans-Texas Corridor is calling to strengthen private property rights. We will face many challenges in the 82nd Session, and we must be guided by sound policy, not political pandering.

The call to address sanctuary cities is nothing more than a divisive political ploy aimed at distracting Texans from our state’s budget crisis. Law enforcement officers across the state understand that crime victims and witnesses are their most important resources for solving crimes. We cannot afford to alienate anyone who could be of assistance in solving crimes. The immigration system is broken and the federal government needs to act. And that should be our message to the federal government, so we can focus on the very real and challenging task of balancing our budget to build a stronger Texas.”

The Trib has more.

We have a number for the hole

There’s actually more than one number that can be used to accurately describe the state budget deficit, depending on what your perspective is, but however you look at it, it’s big and it’s no longer projected or theoretical.

State Comptroller Susan Combs today said lawmakers will have $72.2 billion available to spend in general revenue over the next two years — nearly $15 billion less than they budgeted in the current period.

Combs’ official revenue estimate sets the limit for how much lawmakers can budget for state services.

Her estimate puts the shortfall in the amount needed to continue the current level of services – taking into account such items as population growth – at least at $27 billion, according to figures from the Center for Public Policy Priorities, which focuses on low- and moderate-income Texans.

[…]

Looking at state agency funding requests, the Center for Public Policy Priorities found that the state will need at least $99 billion in general revenue through the next two-year budget period, on top of closing a shortfall in tax collections in the current budget period.

Combs’ estimate includes a prediction that tax collections will fall $4.3 billion short in this budget period. Combs’ $72.2 billion figure takes that shortfall into account.

In addition to having to meet that recession-driven shortfall, lawmakers will be working without two sources of funding that they had last time they met: unspent state fund balances and federal stimulus money.

First things first: The $4.3 billion figure refers to the 2009 biennium budget. The amount of revenue that Combs estimated at that time for the two-year period was short of what we actually collected, so the first order of business will be to appropriate money to make up that gap. How big the hole is for this biennium then becomes a matter of opinion based on how much you think the state needs to spend to pay for what it does now.

Lawmakers budgeted $87 billion in general revenue spending in the current biennium; at least $6.4 billion of that money came from federal stimulus funds which aren’t available to budget-writers this time. Public and higher education and health and human services spending accounted for $73 billion of that; without the stimulus money, that leaves just over $7 billion that’s not in those two major categories.

The comptroller’s official biennial revenue estimate sets the limit, effectively, on what lawmakers have available to spend during the two-year period that will begin in September. There’s a shortfall between what’s available and what’s needed, but estimates of the size of that shortfall depend on the size of what’s needed. For instance, the Center for Public Policy Priorities, a think tank that advocates for the poor, estimates it would cost $99 billion over the next two years to maintain the services the state provides now; they put the size of the shortfall at about $27 billion. Former Appropriations Chairman Talmadge Heflin, now with the Texas Public Policy Foundation, a think tank that advocates for small government and free markets, estimates the shortfall at “$15 or $16 billion.”

In other words, the slash-and-burn TPPF is basing the shortfall on Texas not spending any more than it did two years ago. Thing is, Texas is a growing state – you might have heard about those four shiny new Congressional seats we’re going to get because we’ve been growing like gangbusters – and with all that growth comes added expenses. Much of the state’s increased population comes from children, which means we need to spend more on schools just to keep up. A lot of it comes from lower-income folks, which means things like Medicaid and CHIP need more revenue to keep up. That’s the reality of the situation, and it’s what the Lege will have to deal with.

Now the good news is that after more than a year of declining sales tax revenue, economic indicators are pointing in the right direction again. The next two years will be better for the state, and who knows, maybe in 2013 we’ll hear that this biennium’s budget came in under cost because we took in more money than we initially thought we would. But let’s not lose sight of the fact that the system we have in place now isn’t equipped to keep up with the state’s growth. Too many things are exempt from the sales tax. The property tax cut of 2006 created a structural deficit. We’re going to face many of the same problems in two years’ time even if the economy recovers to a large degree. In the meantime, we’ll be shortchanging schoolchildren and pushing the sick and the needy onto local governments.

Finally, it must be said that Combs’ figures, which you can see in detail here, stand in stark contrast to the denial and Pollyanna-ism that Rick Perry displayed all last year, as Greg and ThinkProgress document and BOR pointed out before the election. He can’t hide from it any more. For more, see statements from Rep. Mike Villarreal, Rep. Lon Burnam, and Sen. Wendy Davis; Vince has more as well.

Quittencourt

I have one thing to say about this:

Many things about Paul Bettencourt have been true for as long as he has inhabited public life.

The former Harris County Tax Assessor-Collector hates when public money is spent on professional sports stadiums. The self-proclaimed “Taxman” always has advocated for lower taxes and fees, often in the form of unwelcome advice to elected city officials. And he, apparently, enjoys a good fight, especially one that garners headlines.

The latter quality has brought Bettencourt roaring back into the limelight after he drew widespread criticism for quitting his office just days after he was re-elected in 2008. Last year, he re-emerged as one of the most meddlesome foils of Mayor Annise Parker, so much so that the mayor a few weeks ago chastised him for repeatedly challenging the city in court, litigation the city claims has cost millions by delaying potential bond issues for capital projects.

A devout Catholic with two children, Bettencourt, 52, insists he is just looking out for the taxpayer. But some supporters suspect he may be testing the waters for a conservative candidacy against Parker. Critics contend that it is all about money. The more Bettencourt raises his profile, the more he gins up business and interest in his company, which helps people contest their property taxes, and the conservative radio station of which he is a part owner. Bettencourt said that accusation is false. It’s all about the policy, he said.

“I may run for office again, but if I do, it may be because there’s some public policy need, not a personality issue,” Bettencourt said when asked about running for mayor.

If being an elected official is important to Paul Bettencourt, then he shouldn’t have quit the office to which he was elected in 2008, which he’d still occupy today if he hadn’t walked away less than a month later, before he was even sworn in again. If there’s one thing we don’t need in a Mayor, especially at this time, it’s a penchant for getting lost when the going gets rough. Greg, Martha, and Campos have more.

Galveston commuter rail project off track

Bummer.

A depressed economy and a budget-cutting political climate have indefinitely delayed a proposed Houston-Galveston passenger rail line, a project that could have been under construction by now according to earlier predictions.

Despite strong support from governments in Galveston County, federal dollars are harder to come by than when the idea gained favor in 2007, and local money is too scarce to finance the $650 million project, said Barry Goodman, whose Goodman Corp. consulting firm spearheaded the effort to win federal money for the project.

“The reasons for that are the economic downturn the last two years has impacted local political subdivisions very dramatically,” Goodman said.

The dearth of local and federal money has turned the project from something over the horizon into a more distant goal, he said.

But Goodman says he’s not giving up and will continue to lobby for the money. Neither is Galveston Mayor Joe Jaworski, whose city has led the fight for the commuter rail line.

“I’m certainly not letting it go,” said Jaworski, who vowed to seek support for the project at the regional, state and federal levels.

More here, here, here, and here. I wish Mayor Jaworski the best of luck with that, but I’m not terribly optimistic about his prospects at this time.

Please use the Rainy Day Fund

I don’t have any faith that those who need to hear this are listening, but as the 82nd Lege gets gaveled in today, it still needs to be said.

A coalition of progressive organizations from throughout Texas called for “a balanced approach to a balanced budget” at a Capitol press conference Wednesday. The groups’ challenge comes less than a week from the beginning of the legislative session Tuesday.

Members of Texas Forward urged lawmakers to resist steep cuts to education and social services as the Legislature attempts to close a budget shortfall projected as high as $24 billion.

“The cuts coming down the pike are not about cutting the fat; there is no more fat,” said Ana Yanez-Correa, executive director of the Texas Criminal Justice Coalition. “What we’re looking at is actually cutting into muscle, and this is the muscle that is key to the infrastructure of Texas.”

Organizers called for the Legislature to close the budget gap using all the money from the state’s “rainy day fund,” a sum estimated at $9.6 billion, as well as finding additional revenue sources, maximizing available federal funding and making “carefully considered cuts” to existing services.

Some of the folks in this effort wrote an op-ed in the Statesman outlining their preferred approach in late December. Again, I agree with them entirely, but that ain’t the Lege we’ve got. I hope I’m being needlessly pessimistic, and I’ll be glad to be proven wrong, but I don’t expect that.