Slash and Burn
The largest budget cuts in Texas history take effect.
The state of Texas’ fiscal year begins today, and unless you’re a government accountant, the date usually passes with little fanfare.
But this year is different. On Sept. 1, the massive budget cuts the Texas Legislature passed in 2011 take effect. The austere two-year budget, $23 billion lighter than its predecessor, will shrink almost every part of state government. Texans are likely to feel the cuts most in public schools and health and human services.
Since the modern school finance system was established in 1949, no Texas Legislature has reduced the amount it spends on education. This session, lawmakers cut $4 billion in funding to school districts—a 6 percent reduction.
Across the state, school districts have laid off teachers and increased class sizes. Many districts are asking voters to raise property taxes. When voters rejected a tax increase to help make up for the cuts, administrators at Keller Independent School District north of Fort Worth started charging students $185 a semester to ride the bus to school.
In addition to the raw cuts to schools, the Legislature also slashed more than $1 billion in funding for grants and programs, many of which targeted the state’s neediest students. Students who struggle to pass standardized tests, including many with learning disabilities, can no longer count on the Student Success Initiative to help them, since the grant program received almost no funding this year. Similarly, the state’s Early Start Grants, which paid for all-day pre-kindergarten programs across the state, are gone, leaving 50,000 children in the lurch.
Meanwhile, for the weakest, youngest and oldest Texans—many of whom rely on state services—the lifeline is being cut in ways large and small. Reductions in health and human services total $9 billion.
“The main thing to note is that it’s going to be death by a thousand cuts,” says Anne Dunkelberg, a health care expert with the Center for Public Policy Priorities, a liberal Austin think tank. She contrasts the coming budget to 2003, when the Legislature dealt with a shortfall by booting hundreds of thousands of kids off the Children’s Health Insurance Program. “Here they’ve spread the harm out. And you could argue, legitimately, that that’s a better approach. But it also means there are going to be many, many marginal additional barriers to care.”
The Legislature hacked $2.03 billion out of Medicaid and left an additional $4.8 billion in IOUs— Medicaid bills that will have to be dealt with in 2013.
Some of the most harmful cuts involve reductions in payments to Medicaid service providers. During the 2011 session, advocates managed to stave off potentially devastating cuts to doctors and nursing homes. But other providers, from hospitals to social workers to physical therapists, will soon have their reimbursement rates—the money the state pays them for their services—reduced by 1 to 10.5 percent. Advocates worry that these cuts will push more providers out of the market or lead them to reduce the quality of care. But nobody is sure exactly what’s going to happen to the state’s most vulnerable citizens in the coming months.
“We’re definitely walking into the unknown,” Dunkelberg says.