These are tough times for state governments. Huge deficits loom almost everywhere, from California to New York, from New Jersey to Texas.Read the rest here.
Wait — Texas? Wasn’t Texas supposed to be thriving even as the rest of America suffered? Didn’t its governor declare, during his re-election campaign, that “we have billions in surplus”? Yes, it was, and yes, he did. But reality has now intruded, in the form of a deficit expected to run as high as $25 billion over the next two years.
And that reality has implications for the nation as a whole. For Texas is where the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting wasteful spending — has been implemented most completely. If the theory can’t make it there, it can’t make it anywhere.
How bad is the Texas deficit? Comparing budget crises among states is tricky, for technical reasons. Still, data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York’s, about as bad as California’s, but not quite up to New Jersey levels.
The point, however, is that just the other day Texas was being touted as a role model (and still is by commentators who haven’t been keeping up with the news). It was the state the recession supposedly passed by, thanks to its low taxes and business-friendly policies. Its governor boasted that its budget was in good shape thanks to his “tough conservative decisions.”
Oh, and at a time when there’s a full-court press on to demonize public-sector unions as the source of all our woes, Texas is nearly demon-free: less than 20 percent of public-sector workers there are covered by union contracts, compared with almost 75 percent in New York.
So what happened to the “Texas miracle” many people were talking about even a few months ago?
The above was published on January 6th 2011. We now have Texas' answer to their budget crisis.
NEW YORK (CNNMoney) -- Texas lawmakers unveiled a Spartan budget late Tuesday night that slashes $31 billion in spending to close the state's massive budget deficit. Education, Medicaid and corrections would be hit particularly hard.Read the rest here.
House legislators were forced to rely on spending cuts to close the shortfall -- estimated at between $15 billion and $27 billion -- because Republican leaders pledged not to raise taxes. They also did not touch the state's projected $9.4 billion rainy day fund, one of the most flush in the nation.
The spending plan calls for a 13% hit to public education and a 7.6% drop in higher education support. Among the cuts, funding for pre-K Early Start programs would be slashed, and four community colleges would be closed.
Such a drastic decline in public education support could be problematic because it would drop the education budget below a level mandated by the state, and force the legislature to change the law.
Health and human services would see funding plummet by nearly a quarter, while government services would fall by almost the same percentage.
Nearly 9,300 government jobs would be eliminated and Medicaid providers would see a 10% rate reduction. Fewer residents would receive meal deliveries and services to keep them in their homes. Some 60,000 students would lose financial aid for college.
Funding for defending the poor in court would drop by 15%. And the department that supervises and supports parolees would by cut by nearly 21%.