Daily Progress, Jacksonville, TX

April 4, 2011

Texas House passes budget

Lauren LaFleur
Jacksonville Daily Progress

AUSTIN — Rep. Chuck Hopson (R-Jacksonville) said from the State House floor  Monday that House Bill 1, the House’s version of the state budget for the next two years, is very bare bones, but as good as the bill could get.

“It’s not a pretty bill,” he said. “It’s like when a family has a meeting and mom and dad say you’re all going to have to cut back, that there’s light at the end of the tunnel, but for now you all have to work together to make it through.”

The House budget passed at about 11 p.m. Sunday, Hopson said, and includes massive cuts to public education and health care programs for the poor, allows for privatization of two state hospitals, and slims down the Texas Board of Criminal Justice’s Windham School District.

“Basically cuts were made to every department in the state,” he said.

HB 1 was approved by a 98-49 vote which closely followed party lines — two Republicans and House Democrats voted against the bill.

The House budget, which will now be sent to the Texas Senate for possible approval, underfunds schools by almost $8 billion less that state law requires to be spent, according to a story by The Associated Press. Medicaid is also underfunded, but by more than $4 billion.

Hopson said one of his major concerns about the proposed budget is the cuts in public education. HB 1 cuts all funding for public education’s pre-kindergarten program.

“A lot of those kids who go to pre-K in East Texas have never had a book read to them until they start pre-K,” he said. “We have to have an educated workforce for the future.”

The timing of the budget process bothers Hopson, he said, because of the budgetary schedule of school districts. He said he knows it is difficult for school boards across the state this time of year because they are required to have a final budget by mid April.

“We won’t have a final (state) budget until mid-May,” he said. “We’re still a long way away from having a final budget. It really makes it tough on local school districts.”

Other areas of education were cut drastically, such as the Windham School District — the district that provides education for those incarcerated in the Texas prison system.

“In education funding, there was a lot of things we cut out,” Hopson said.

Also of interest to Hopson is the amendment to HB 1 allowing for privatization of two of the state’s hospitals.

“We’re trying to make sure Rusk State Hospital is not one of those,” he said.

The amendment pertaining to possibly privatizing two of the hospitals in the state system stipulates those hospitals must show a $10 million savings for the next two years, Hopson said.

In all, the budget proposal spends $164.5 billion over the next two years in state and federal dollars. That’s about $23 billion less than what is in the current budget.

While the economy has left many states with budget deficits, the economic downturn caused only a third of the revenue shortfall in Texas. When consumer spending slowed, state revenue from sales tax receipts also decreased, creating a $4 billion deficit in this year’s budget.

To balance the current budget, a pair of companion bills, HB 4 and HB 275, were passed late last week allowing $3.2 billion of the state’s “Rainy Day Fund” to be used to fill in the gaps of the state’s budget until August, when the new budget goes into effect.

Most of the shortfall was created when the state overhauled the business tax structure and the school finance system in 2005. The new tax structure did not generate enough money to offset decreases in school property tax rates, creating a recurring $10 billion budget hole.

“When that tax was passed in 2005, I did not vote for it,” Hopson said.

In the current budget, most of the hole was filled with some state savings and federal stimulus dollars that are no longer available.

“Last year, we had $13 billion in stimulus money that we do not have this year,” Hopson said.

The state will have at least $9.4 billion available in reserves in the Rainy Day Fund, made up from oil and gas tax revenue.

“With oil prices up, that makes a big problem for individuals,” Hopson said. “But it does let us put more dollars into our Rainy Day Fund.”

Leaders have approved a plan to use about a third of that to close a deficit in the current budget, but Gov. Rick Perry has fought using any more.

“The governor doesn’t want to use our Rainy Day Fund, but I don’t see how we cannot,” Hopson said. “We’ve had to use it twice since I’ve been in office — in 2003 and 2005.

 “I do think it’s better to have a reserve, but it looks to me like it’s raining pretty hard right now.”

But despite the bleak picture Texas’ finances paint, Hopson said he does see the light at the end of the tunnel.

“The Texas economy is the second best economy in the nation right now,” he said. “We’re the fastest growing state in the nation.

“Last year we created more jobs in Texas than the rest of the country combined. As bad as it is now, we’re better off than most.”

Keep reading the Daily Progress during the Texas Legislature’s budget process for updates about the state’s economic outlook and how the upcoming budget will affect state-funded entities in Cherokee County.

The Associated Press contributed to this report.