Facing South

How Texas conservatives are manipulating a budget crisis of their own creation

Facing South
Facing South
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rick_perry_horiz.pngBy Forrest Wilder, Texas Observer

"While some are worried, conservatives should be excited. This challenge should be viewed as an opportunity." - Andrew Kerr, executive director of Empower Texans, a conservative group.

What's Kerr so excited about? Oh, just Texas' little old $27-billion budget hole.

Conventional wisdom holds that tax increases are "off the table" and that violent cuts to core government services must
be made. State lawmakers across the political spectrum almost
unanimously lament the "painful" choices they will have to make this
session. They make it sound like the butchery they are contemplating is
inevitable. It's not.

Legislators could build new revenue streams
from the immense wealth in this state. They might, for example, devise a
state income tax, as 43 other states have, which would also make the
regressive state tax code more equitable. They could maintain essential
state services, including public education, health and human services
and higher education. It is unlikely that any of that will come to pass.
Instead, we hear that "everyone will have to do their part" and "all
options are on the table" -- platitudes that the powerful use to signal an
unpopular decision has already been made. The public hears this kind of
thing from leaders when they are preparing for war -- whether it involves
tanks and bombers or a full-frontal assault on one's own government.

many Texas legislators and conservative activists, the budget crisis is
a thing of wonder -- a once-in-a-generation chance to drown government in
the bathtub, to use anti-tax crusader Grover Norquist's infamous phrase.
As Lt. Gov. David Dewhurst succinctly put it in his inaugural speech: "We pronounce the word 'C-R-I-S-I-S' as 'opportunity.'"

If you're
looking to understand this legislative session, look no further than the
Shock Doctrine. In a 2007 book by the same name, Naomi Klein argues
that acolytes of far-right economic theory use "moments of collective
trauma to engage in radical social and economic engineering."

it was post-apartheid South Africa, Chile after the coup that toppled
socialist Salvador Allende, or New Orleans after Hurricane Katrina, the
engineers of Milton Friedman-style economics swooped in with a
three-prong agenda of privatization, government deregulation and deep
cuts to social spending. Disasters, natural and manmade, create the
conditions for changes that couldn't otherwise happen -- an economic
shock-and-awe campaign so swift that nobody notices until it's too late.

You can see it at work in Texas now.

the numbers: Maintaining current services for the coming biennium
requires about $100 billion. That sounds like a lot until you consider
that Texas already spends less per capita than almost any other state,
despite a diverse, booming population with complex needs, not to mention
a variegated economy, vast infrastructure and intractable problems. The
state is short $27 billion, more than one-quarter of the state's $100
billion discretionary budget. About 91 percent is consumed by public
schools, higher education, and health and human services. That means "devastating" cuts are all but certain.

In case anybody's looking
for a culprit, Gov. Rick Perry said Texas' deficit was "reflective of
the national recession's lingering impact on state revenue." In fact,
the recession has little to do with the $27 billion shortfall. Back in
2006 the Legislature concocted a Rube Goldberg-style measure that
simultaneously cut property taxes, imposed a new "margins" tax on
business and rejiggered the way public schools are financed. Wowee
zowee -- three birds with only one stone! Problem was, as the state
Legislative Budget Board pointed out at the time, the plan's math didn't
wash because the margins tax wouldn't bring in as much as the
Legislature thought. In fact, the board said, it would leave a $5
billion hole in the state budget every year. The upshot: Perry, who
pushed the swap, knew full well he was helping to create today's "crisis."

The budget shortfall
is not the cause of the pain. It's the justification. For 30 years,
antigovernment forces have been in the ascendancy with a platform of
free markets, deregulation, privatization, the evisceration of social
programs and the systematic debasement of the greater good. In Texas,
where Republicans control more than two-thirds of the state House and a
little less than two-thirds of the state Senate, this ideology now has
its moment in the sun.

"The bottom line is there are no excuses
now," Republican Sen. Dan Patrick of Houston, the right-wing radio
talk-show host and founder of the Tea Party Caucus, told the Associated
Press in January. "It's a perfect storm, in a positive way, for

Free market fundamentalists are champing at the bit
to slash into the marrow of state government. The influential Texas
Public Policy Foundation, which carries the mantle of Milton
Friedman-style economics, is not shy about its agenda. It sees an
opening to privatize state-supported living centers; cut the state's
Medicaid program with a reckless goal of allowing "the quality of
Medicaid-covered health care services to deteriorate in order to prevent
the crowd-out of private health coverage"; and eliminate the state's
successful Renewable Portfolio Standard, which has made Texas the
nation's leader in wind energy.

The foundation's wish list isn't
likely to be enacted in full. But take a stroll through the news in the
past few months, and you see that the Texas Shock Doctrine is in full
effect. Things once unthinkable, such as savage cuts to public schools,
are now imminent.

Schools consume 44 percent of the state's
general revenue, making it virtually impossible to spare schools from
the ax. Austin lawyer Buck Wood, a veteran of school finance lawsuits,
told the San Antonio Express-News that a 5-percent cut in
education funding would mean $30 million less for San Antonio's
Northside school district, forcing larger classes and staff reductions. "School districts right now are in a state of shock," Wood said. "Things
are much worse than even I thought just a few months ago."

draft budget floated by chief House budget writer state Rep. Jim Pitts, a
Waxahachie Republican, whacks state community mental health funding by
40 percent. Texas already spends the least of any state on mental
health, and those in the field warn that further cuts could lead to a
permanent crisis, with mentally ill people off their meds and literally
wandering the streets. Untreated mentally ill people often commit
crimes. Jail, never a cheap prospect, ends up being the de facto mental ward.

prime target: colleges and universities. At minimum, drastically
reduced state funding for higher education will translate into higher
tuition and fees, and less financial aid. In 2003, the last time we had a
budget deficit in Texas, the Legislature "deregulated" tuition,
allowing governing boards of universities to raise it unilaterally.
Legislators can't "deregulate" again, so the assault on colleges and
universities will be more direct: faculty layoffs, bigger classes, a
construction freeze and the elimination of courses, perhaps whole
programs. The House draft budget proposes to cut state funding for four
community colleges.

University leaders expect the austerity measures to become a permanent fixture.

support at the level we have enjoyed for the last 15 or 20 years is
never coming back," Stanton Calvert, Texas A&M University's vice
chancellor for governmental relations, told regents earlier this month. "There will almost surely be less money for a long time going forward."


The Shock Doctrine "relies heavily on the element of surprise," writes Klein. "A state of
shock, by definition, is a moment when there is a gap between
fast-moving events and the information that exists to explain them."
That's where Texas is right now.

Sen. Kirk Watson, a moderate
Austin Democrat, has proposed one modest fix: the Honesty Agenda.
Watson's idea is to force legislators to be transparent about accounting
gimmickry, hidden taxes and structural deficits. Watson warns that this
might be the last chance to fix state finances before "our budget
crises become chronic," consigning Texas to a future of second-rate
schools, health care and infrastructure.

Most of Watson's plan
involves changes to the process: requiring five days to "lay out" the
final budget before voting on it; abandoning taxes and fees that don't
go toward their advertised purpose; and eliminating unfunded mandates. "In a sane world, they wouldn't be controversial at all," Watson said in
a December speech.

We don't live in a sane world. Conservatives
have a simple story: Government is bad, and taxes are bad, so we must
balance the budget by cutting spending. If progressives and moderates
find a compelling counternarrative to explain why bombing state
government is bad in the short term and worse in the long term, then
perhaps some of the damage in store for Texas can be mitigated.
Sometimes cooler heads need to be fiery.

(Photo of Gov. Rick Perry from the Texas Office of the Governor.)

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re: How Texas conservatives are manipulating a budget crisis of

The problem with half truths is that the other half is either a lie or some version of the truth. The current leadership in Texas has dropped the ball and worse have not owned up to thier mistakes. The current situation cannot be blamed on the economy as they would have you believe. They need to admit they made mistakes and fix them. Placing 120,000 state and school district employees into the unemployment line is not the answer! The leadership has been part of the problem, they need now to be part of the solution.

re: How Texas conservatives are manipulating a budget crisis of

The actions of our state leadership put us in the position in which we find ourselves today when they changed the tax structure in 2006 KNOWING at the time that it would lead us to where we are - and it will get $5 Billion worse every successive year that we keep the current tax structure. The Legislative Budget Board told the 2006 Legislature that this would happen and Slick Rick got the same information back then and still pushed for the tax changes that were proposed, and passed, by that Legislature, most of whom are still in the Texas Legislature. That kind of points the finger right back at us for sending the same mental midgets back to the Legislature and/or the Governor's office.

re: How Texas conservatives are manipulating a budget crisis of

"Sometimes cooler heads need to be fiery."

W.B. Yeats said it best:
"The best lack all conviction, while the worst
Are full of passionate intensity."

re: How Texas conservatives are manipulating a budget crisis of

I am glad someone is getting the truth out. I really do not understand how the media in Texas are ignoring the fact that much of this problem is the direct result of the legislature reducing property taxes by 1/3 in 2006. Our leaders were warned then and again in 2008 about this structural deficit and have done nothing to fix it. Now they can blame it on the recession and wash their hands of it.