On the Budget, One Step Forward and Two Steps Back

Despite yesterday's deal, Texas' budget mess looks as bad as ever


Dave Mann

Did yesterday’s budget deal make things better or worse? Tough to tell.

The big news at the Legislature yesterday—as you probably know—was the agreement between House budget writers and Gov. Rick Perry to use up to $3.2 billion of the Rainy Day Fund to balance the state’s finances. The deal has to be considered a bit of progress. Without the Rainy Day Fund, the state had no way to pay its bills through the end of this fiscal year. Yet Perry had, until yesterday, refused to publicly endorse tapping the emergency fund. Under the deal, budget writers can keep the state functioning. In exchange, I believe, the governor’s office must be getting some piece of Jim Pitts’ soul.

Forgive me some dark humor. Despite yesterday’s small bit of progress, it’s hard to be optimistic about the budget situation. The deal keeps the state solvent for this fiscal year. (We have a $4 billion deficit for the rest of 2011, and lawmakers can’t cut their way out of it because, with just five months left in FY 2011, there’s not enough time to implement cuts. The Rainy Day Fund was the only option.)

But here’s the thing: The deal really does nothing to address the larger problem—the roughly $27 billion budget deficit we’re facing for the next two years. In fact, we now have $3 billion less in the Rainy Day Fund to deal with the huge deficit for 2012-2013.

And Perry seems opposed to using any Rainy Day Fund money for the 2012-2013 budget. I hope Perry is simply posturing. Because without the Rainy Day Fund, the 2012-2013 budget would implement cuts that might cripple the state.That’s not just my opinion. That’s what state officials are telling the Legislature.

While the House was negotiating with Perry yesterday, on the other side of the Capitol, a Senate budget committee was having a terrible time trying to close the budget deficit for the next two years.

A Senate Finance subcommittee—headed by Republican Jane Nelson—has been tasked with slicing $16 billion from the health and human services budget. That’s nearly impossible.

A string of state agency administrators pleaded with the committee to restore a handful of key programs that are cut in the Senate’s draft budget. And your heart would have to be made of stone not to want these proposed budget cuts undone.

For instance, the draft budget drastically reduces funding for prevention programs that help keep kids out of foster care, as officials with the Department of Family and Protective Services pointed out. That might expand the number of kids in foster care. At the same time, the budget slashes the rates the state pays foster care providers. Essentially, the foster care system would be caring for more kids with significantly less money. If that doesn’t sound like a chilling recipe for mistreated children, I don’t know what does.

Sen. Nelson observed that the state’s Child Protective Services department had made great improvements since its scandals from 2005 and 2006—when media reports of murdered children ignored by the state were popping up regularly. Nelson stressed that the state couldn’t “backslide” on that progress.

So that seems like a dire need. But so does mental health care. The next agency head before the committee—the Department of State Health Services’ David Lakey—pleaded    with lawmakers not to cut funding for community mental health centers. In the draft budget, these centers—which provide counseling and medications to severely mentally ill Texans—take a $75 million hit. That would deprive treatment from 20,000 people, who would be wandering the streets without their meds and likely end up in the emergency room or county jails. Or worse, commit some horrific act of violence. Lakey said restoring some funding for the community centers—like the one in San Antonio I recently wrote about—is “essential.”

Then there are in-patient crisis centers for the mentally ill, which are slated for a $9 million cut. That would eliminate 54 beds statewide, mostly in Harris and Galveston counties and in Lubbock, for people experiencing mental health crises. The state is already short on beds for mental health treatment. Removing 54 beds would mean that some people who are a danger to themselves of others would either remain on the street or be thrown in county jails.

That’s to say nothing of the huge Medicaid rate cuts for doctors and nursing homes in the draft budget that would do serious damage. Lawmakers need to find money to restore those rate cuts or we could see hundreds of nursing homes closing across the state and thousands of seniors with no place to go.

Listening to hearings like this is profoundly depressing. I’ve started imagining the state budget like a submarine that’s taking on water. There are many compartments filled with vulnerable people who will drown without help, but we can’t save everyone. And state lawmakers are trying to decide which people to save and which hatches to close off and let people fend for themselves.

Is that analogy over-dramatic? I don’t think so. A good number of these cuts could end lives.   

So, yes, lawmakers made progress on the budget yesterday. The deal had to be done. But there’s no reason to celebrate. If Perry holds firm to his no-more-Rainy-Day-Fund-use stance, then yesterday’s events might have actually made things worse.