Inside the House’s Brutal Budget

Latest budget bill still contains harsh cuts to education, health care and the environment.

It was supposed to get better.

In January, state lawmakers released a first draft of the state budget that contained shockingly deep spending cuts. Legislators assured us there was plenty of time to improve the budget. It was just the first step in a long process, we were told.

Well, two months on, the budget outlook isn’t much brighter. On Wednesday, the House Appropriations Committee approved the latest version of the budget bill—known officially as the Committee Substitute for House Bill 1. It looks alarmingly similar to the first version. Budget writers added about $4 billion to education and health care programs. But most of the deep cuts remain.

The budget bill goes to the House floor next week—a major step in the budget process—where it’s unlikely that lawmakers will add new money. After the House passes what now appears will be draconian two-year spending plan, the budget-writing process will be officially half over. Then it will fall to the Senate to prevent spending cuts that not only will ruin lives (and in some cases end them), but also cost the state 335,000 jobs, according to one recent analysis.

In a rare move, all seven Democrats on the House Appropriations Committee voted against the budget. When you look at the details, you can see why. The headline numbers have already been well reported. The House plan would cut spending by $22 billion over the next two years. But the dispiriting news lies in the details. We combed through the latest version of the budget to see how it would affect public schools, health and human services, and state parks and the environment. It ain’t pretty.

PUBLIC EDUCATION

While the latest House budget puts $2 billion back into funding for school districts, public education still suffers almost $8 billion in cuts—a loss of around 18 percent. If the House budget passes ‘as is’, the implications for school districts are sure to be enormous. But there’s no word yet on how exactly individual school districts will be impacted. That’s because the Legislature will have to pass a new school finance bill, which will dictate how the cuts will get made. While the original House draft of the budget cut nearly all discretionary grant programs for public schools, the lawmakers did find some places to put back partial funding—most notably in a mentoring program and dropout prevention effort. Those are two of the few bright spots; most of the other programs that target at-risk students are gone completely—like early childhood education and various efforts to help kids pass state assessments.

  • Eliminated: The Advanced Placement Incentive Program, a $14 million-a-year effort to subsidize the costs of AP tests for high school students.
  • Gone, also, are the Pre-K Early Start Grants, which pay for all-day pre-k programs in school districts across the state. The program serves over 50,000 students each year for around $104 million, with the specific purpose of helping students start school at grade-level. School districts can still use their general funds to offer half-day pre-k programs, but the jury’s still out on the effectiveness of half-day instruction.
  • Teens who get pregnant better not be hoping for classes on what to do once they have a baby. The Texas Education Agency’s teen parenting programs, which serves tens of thousands of students each year, are now zeroed out.  
  • The latest version of the House budget also zeroes out Student Success Initiative grants. The program gives money to districts for programs to help students with learning disabilities and students who would likely have trouble passing the state assessment exams in key years—third, fifth and eighth grade. Since students who fail their fifth and eighth grade state exams are held back, impacted families better plan on some extra tutoring.
  • A mentoring program run by the Boys and Girls Club was one of the few programs to see renewed funding. The program was initially cut entirely, but House budget-writers opted to restore $750,000 a year to the program—still only half of what the program received in the last budget.
  • There was good news for Communities-in-Schools, a program geared toward dropout prevention through partnering with businesses and community resources. In 2010 and 2011, the program helped 85,000 kids each year with a budget of around $20 million. The first version of the House budget left only $4.8 million in federal money for the program, enough to help just  20,000 kids. Now, the state’s pumped an extra $5 million a year of its own funds into the program, enough to serve around 46,000. It’s almost half of the number they served last year, but better than initial proposals.

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HEALTH AND HUMAN SERVICES

It’s hard to overstate the impact of the spending cuts to health and human services in the latest version of the House budget. If these policies are instituted, people will lose their lives. That may sound overly dramatic, but it isn’t. Nursing homes will close; the mentally ill won’t get their meds and may injure themselves or others; the mentally disabled will be kicked out of community homes and consigned to large institutions; and child-abuse prevention programs will be slashed.

Medicaid

Many of the worse cuts in this latest version of the budget involve this state-federal health care program. Medicaid pays for so many services, that cuts to it impact millions of people. House budget-writers recently added $1.8 billion for Medicaid—the biggest difference between the initial budget proposal and the version that’s headed to the House floor.

But even with that extra $1.8 billion, the Medicaid program is facing massive cuts. The latest House budget under-funds Medicaid by $6 billion, according to the Center for Public Policy Priorities. In other words, the program would need an additional $6 billion just to maintain current services for the state’s growing population.

In 2003, lawmakers simply kicked people off the program. That isn’t an option this time. Under national health care reform, the federal government won’t allow states to reduce the Medicaid rolls. In fact, more Texans will be signing up for Medicaid in the next two years, but the House budget provides no money for that caseload growth.

So, how do you serve the same number of people—actually more people—with $6 billion less. This isn’t rocket science. The state will simply pay less for each person served. That means all the providers who accept Medicaid—doctors, hospitals, nursing homes, group homes—will receive substantially less money for their services. Providers say that the budget amounts to a 30 percent cut to their Medicalid payments. Very few businesses can survive a 30-percent loss in revenue, and many providers will either go out of business or simply withdraw from Medicaid. Either way, the effect is the same: Many poor, elderly and disabled Texans will suffer.

Nursing Homes

The 30 percent cut to Medicaid payments could put half the state’s nursing homes out of business. Many others would have to stop accepting Medicaid because they couldn’t afford it—such as Autumn Winds Retirement Lodge, which the Observer profiled last month. That would leave tens of thousands of frail seniors without a place to live or forced to move in with relatives. It would also cost a lot of jobs. Texas nursing homes employ about 50,000 people.

Mental Health

The latest House budget doesn’t provide much added funding for mental health services. The budget would cut funding for mental health community centers by 20 percent. The community centers provide medications and outpatient treatment for severely mentally ill adults and children. At many centers, including the one in San Antonio, there’s already a long waiting list.

Foster Care Prevention

These prevention programs help keep kids out of foster care. They’re slated for deep reductions. Funding for the Services To At-Risk Youth (STAR) program would be cut by 33 percent from the 2010-2011 budget. Other at-risk youth prevention programs—which received $17.9 million from the state in 2010-2011—would be zeroed out. These cuts would lead to more kids in state foster care.

Community Care for Mentally Disabled

This is another area that will be devastated by the cuts to Medicaid. The Home and Community-based Services (HCS), and the Community Living Assistance and Support Services (CLASS) programs allow Texans with mental retardation to live in the community. The programs use Medicaid money to house people with mental retardation in small, group homes or pays for home-health aides to help the disabled live at home with their families. These programs have led to profound improvements in people’s lives, as we detailed in this post. In the House budget, HCS loses 27 percent of its funding. CLASS is cut 25 percent. Moreover, many group homes and community providers have said they simply can’t continue operating if their Medicaid payment fall 30 percent.

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THE ENVIRONMENT AND NATURAL RESOURCES

For the agencies that manage Texas’ vast natural resources, the House budget cuts range from bad to worse. Funding for clean air, clean water, state parks, wildlife conservation, fisheries, coastal protection and groundwater planning all face significant reductions. These devastating cuts come at a critical time for the state. Growing concerns over natural gas fracking haunt residents in the Barnett Shale. Water supplies are increasingly strained. Our big cities struggle to meet federal smog standards. And the state’s political leaders are locked in a nasty fight with the EPA over air permitting, greenhouse gas regulations and other environmental issues. For now, let’s take a look at two agencies: the Texas Commission on Environmental Quality and Texas Park & Wildlife Department.

The Texas Commission on Environmental Quality, the second largest environmental agency in the world, faces a whopping $336 million cut, about 34 percent of its budget. About 235 TCEQ employees could lose their jobs.

Taking the biggest hit are the state’s programs to clean up Texas’ smog problem. The Texas Emissions Reduction Program (TERP), which provides incentives to businesses and governments to replace polluting engines, is sliced from $229 million to $89 million, a 60 percent reduction. As part of the TERP cuts, the Clean School Bus Initiative, which helps public schools replace polluting diesel buses, is reduced by more than half from $8.3 million to $3.5 million. Also, the Texas Clean Fleet Program, which provides incentives to owners of large fleets to replace diesel-powered vehicles with alternative fuel or hybrid vehicles, is facing an almost 60 percent reduction, from $5.2 million to $2.2 million. As a result, about 13,500 tons of smog-forming gases will be left in Texas’ air, 56 percent more than if the Lege sustained current funding levels.

One difference between the original House budget and the budget bill headed to the floor: Budget-writers have restored some funding (but not much) to another important clean-air program, the “Drive a Clean Machine” effort. Also called the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP), the program provides financial incentives to low-income folks who replace their old polluting vehicle with a newer, cleaner model. In the original House budget, LIRAP had been totally eliminated but the new version kicks $25 million to the program. However, that’s far short of the $90 million available in the last biennium. As a result, the number of highly-polluting cars taken off the road drops from around 37,000 in 2010-2011 to about 9,500 in 2012-2013, or 75 percent fewer. It appears that the budget-writers are funding the LIRAP program by shifting money from TERP.

Other important environmental programs set for elimination or cuts:

  • Air-quality planning in areas close to exceeding federal smog standards (e.g. Austin, El Paso, Victoria, Waco, etc) is cut in half, from $7.1 million to $3.5 million.
  • Research into improving air-quality monitoring is also cut in half, from $1.5 million to $750,000.
  • Funding for research into air toxics at the Mickey Leland National Urban Air Toxics Research Center– $1 million last biennium – is completely eliminated.
  • Pollution prevention and recycling programs also face significant reductions. The House budget whittles funding from $11.4 million last biennium to $4.6 million for 2012-2013, a 60 percent reduction.
  • Cleanup of leaking petroleum storage tanks and hazardous materials sites is cut by 32 percent under the House budget, from $127 million to $87 million.
  • The agency’s oversight of drinking water systems and water utilities goes from $30.8 million to $28.9 million, a six percent reduction.

Texas Parks and Wildlife Department

The latest version of the House budget does little to pretty the picture at Texas Parks & Wildlife Department. Just as the beleaguered agency was bouncing back following an infusion of cash from the 2007 session – money intended to make much-needed repairs at dilapidated parks, extend operating hours and replace worn-out vehicles – it’s now looking at bone-deep cuts. Ken Kramer, director of the Lone Star chapter of the Sierra Club, describes it as “two steps forward and two steps back.”

Overall, TPWD is being forced to slash $238 million from its budget, a full third. The biggest blow is to the state park system. Seven parks, including Blanco State Park and Big Spring State Park, now face either transfer to local government or closure.

And the hits keep coming…

Grants for local parks are zeroed out. Money for land acquisition is eliminated. The operating budget for state parks drops by 16 percent, from $139 million to $118 million. About 260 employees are set to be laid-off, including twenty-five game wardens. Education programs for hunters and boaters plunges by one-quarter, from $3.5 million to $2.6 million. Wildlife conservation sees a 43 percent reduction when compared to last biennium.

The House budget proposal also suspends the buy-back of commercial fishing licenses, a program funded by the Saltwater Fishing Stamp Endorsement and a surcharge on commercial licenses.

It’s also unlikely that the Legislature will authorize the issuance of more bonds this session, putting TPWD’s efforts to modernize aging infrastructure on hold. In 2007, the Lege appropriated $69 million in bonds for TPWD, funds that have been largely rolled into ongoing repair projects at more than 40 state parks. But with no new money in the pipeline, TPWD’s work will come to a “screeching halt” in 2014-2015, according to TPWD spokesman Tom Harvey.

Much of the decline in funding can be attributed to the Legislature choking off the flow of the sporting goods sales tax. Since 1995, a portion of the sales tax on sporting goods has generated revenue for state and local parks. Until 2007, the amount TPWD could receive from the tax was capped at $64 million each biennium, even though the tax typically generates well over $200 million in revenue. Although the cap was removed in 2007, the Legislature must still decide every two years how much the agency gets. This session the House budget-writers are being especially stingy, giving TPWD just $61 million for the biennium – less than what the agency got in the mid-90s.

Still, there are a couple pot-sweeteners in the budget for Texas Parks & Wildlife. For example, a budget rider would allow the agency to keep any “extra” revenue (above and beyond the Comptroller’s estimate
) it generates from entrance fees, camping fees, etc. Another rider would give people the option of donating to state parks when they register their vehicle. Finally, a bill working its way through the House by Reps. Ryan Guillen (D-Rio Grande City) and John Frullo (R-Lubbock) would allow TPWD to partner with a “for-profit entity as an official corporate partner” of Texas parks. Welcome to Big Bend Exxon State Park, y’all.