Editorial

Oops. They Did It Again

almadge Heflin, Arlene Wohlgemuth, and Teel Bivins have all departed the Legislature, but their state budget is still very much with us. As you may recall, two years ago, the GOP leadership—led in part by Talmadge, Teel, and Arlene—took Texas’ already austere budget and used a $10 billion shortfall as cover to hack away at state services for the poor and infirm like weed infestations. The 2003 budget dropped 171,000 from the rolls of the Children’s Health Insurance Program; swiped Medicaid services from tens of thousands of the poorest Texans; denied mental health care to 17,000 people; and reduced the amount that 12,000 nursing home residents get to keep from their Social Security checks. (At one Waco nursing home, attendants must buy denture cream because the residents can’t afford it anymore.) The budget reductions were also an economic drag. Economist Ray Perryman recently estimated that the 2003 cuts deprived Texas of as much as $16 billion in productivity, and slowed growth by 70,000 jobs. There was somewhat of a political price too. In last November’s election, Wohlgemuth lost her race for Congress, and voters bounced 21-year incumbent Heflin from office, at least in part because of the 2003 reductions. A week after the election, several legislators filed bills to fully restore the CHIP cutbacks. So when legislators returned in January, and with the comptroller estimating a tiny budget surplus, the conventional wisdom posited that lawmakers would restore many of the worst rollbacks. It just hasn’t worked out that way. The 2006-2007 budget that the House passed last week increases overall spending by nearly $11 billion. Don’t be fooled, though. Much of that increase simply goes to keep up with the state’s population growth. Even the several billion in new money for education barely keeps up with population increases. The closer you examine the initial budget, the worse it looks. The plan maintains many of the worst 2003 cuts. For CHIP? The initial House plan actually reduces state spending by nearly $25 million on the popular program for the working poor. A few CHIP services are refunded, but the biggest reductions remain. That means rather than rebound, CHIP enrollment will continue to plunge, according to House budget projections. For Medicaid? The very harshest 2003 reductions are still in place, including one that forces Medicaid recipients to re-enroll every six months instead of annually. (Lawmakers know this bureaucratic maneuver kicks people off the Medicaid rolls). For mental health? Forty percent of the 2003 cuts to an already strained public mental health system remain. What have House and Senate budget writers chosen to spend money on? Lawmakers allot $130 million for Gov. Rick Perry’s Enterprise Fund, which as Paul Sweeney explains in this issue, pays Fortune 500 companies to create jobs in Texas, for questionable value. Besides the Enterprise Fund, other cash streams are available to pay for undoing the 2003 cuts. For example, Texas has left unspent more than $300 million worth of federal emergency funding from 2003, according to the progressive Center for Public Policy Priorities. That would easily make CHIP whole again—a cost of $93 million in state spending. (That would draw down more than $536 million in federal matching funds; it’s hard to find a better return on an investment than that.) It’s not too late to fix the budget. In the next six weeks, a conference committee will write the final spending plan. If the 2003 reductions aren’t restored this session—despite the political pressure to heal CHIP and other programs—this budget will entrench the 2003 cutbacks as the status quo, and institutionalize a level of spending that will permanently harm the state. —DM