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Capitol Comment
How did we get here?
The facts about Texas’ economic hole and the consequences we face
by Brock Gregg, ATPE Governmental Relations director
At times like these, when a crisis has arrived, it is best just to state the facts and not try to be cute. Once absorbed, facts morph into questions needing answers and problems needing solutions. One can then file facts away for a while, reflect on better times and consider what the future can hold.
The facts about the shortfall
The state faces a $27 billion shortfall in its next two-year budget. That $27 billion is the difference between the amount of projected revenue the comptroller says Texas has available to spend and the amount the state must have to fund current services and pay for population, inflation and enrollment growth. K–12 public education represents about 40 percent of the state budget, and lawmakers are proposing the education budget be cut by $10 billion, or 22 percent of what is needed to fund current services and growth. To put this in perspective, the entire state budget shortfall in 2003 was $10 billion.
Two-thirds of the shortfall comes from the recent economic contraction, but one-third is the result of a structural deficit. The 2006 property tax reduction passed by the Legislature has created a structural deficit that enslaves our state’s tax system.
The property tax cuts were sold to the public based on a package of replacement taxes—increased cigarette taxes, a modernized tax on used car sales and a reformed business tax that was intended to reflect the current economy, thus allowing it to grow and meet increased needs. The business tax change was a colossal failure that not only didn’t grow to meet the increased needs but also fell $2 billion short of its projected revenue. The result is a structural deficit—a shortfall that lasts forever and grows in size—projected to increase to $10 billion in the next biennium. Even though the Texas economy is recovering and yielding more revenue, the hole continues to get deeper because the “replacement revenue” doesn’t fully replace the property tax cuts. So far, the legislative response is an all-cuts approach that slashes services and jobs, does not seek new revenue sources and does not tap the state’s Rainy Day Fund—a potential source of about $9.4 billion.
The consequences
By now, you have likely heard that the $10 billion all-cuts approach means the loss of as many as 100,000 jobs in education. It also means slashing many programs essential to meeting the standards set by the state accountability system—such as grants for full-day prekindergarten, state funding for past state salary increases for teachers and other professionals, and remediation programs such as dropout recovery and the Student Success Initiative, just to name a few. We face a $1,000 reduction in the amount of available per-pupil revenue.
So far, the legislative response to the public education funding cuts is to propose “relaxing mandates,” which includes eliminating 22-1 class-size limits; changing teacher contract law to facilitate local furloughs, layoffs and reductions in pay; making remediation for failing students optional; and eliminating the 10-1 class-size limit in remediation courses. The only mandate the Legislature does not intend to relax is the one on students: the testing and accountability system, including the new STAAR program set to go online for ninth- and 10th-graders in the next two years. The testing and accountability system is the biggest mandate in public education and drives the entire system, yet the Legislature seeks to eliminate the mandates that produce success.
Retired educators face another legislative session with no cost-of-living increase in their pension, and the Legislature is considering lowering the state’s contribution to the Teacher Retirement System (TRS) to save money. The budget proposal cuts by half the state contribution to the TRS-Care retiree health care program, which means there will be steep increases in premiums over the next few years. The Wall Street sharks smell blood and are circling. They will try to convince the Legislature to end the pension system completely by converting it to a defined-contribution, 401(k)-type program, a great money-making machine for themselves.
This is just in public education. Higher education faces 40-percent budget cuts. State employees are looking at massive layoffs, and funding for Child Protective Services, nursing homes and more is likely to be reduced.
Digging out another way
There is always another way, including one proposed by Texas Forward, a coalition of many groups including ATPE. Please visit www.txforward.org to take a look at the coalition’s plan and its possible consequences. It is a balanced approach to a balanced budget that includes using the whole Rainy Day Fund, considering new revenue options and funding current services while accounting for growth and inflation.
Reflection time
Once you have considered the facts and filed them away, reflect on the practices and policies that we believe are truly essential to giving our students what they deserve. We will have to make some choices, all of them difficult. Which results do you want to achieve? Do you prefer the sacrifices and consequences of an all-cuts budget approach focused on shrinking government services and lowering taxes at the state level? Are you willing to make the sacrifices associated with funding current services and future growth? The choice is yours to make based on your own circumstances and your own values.
Regardless of that personal choice, it is your obligation as a citizen and professional educator to share your conclusions with those we have elected to make these decisions in our stead. If you don’t fulfill that obligation and don’t share your facts, reflections and solutions, then your choices, along with those of the rest of the public education community, will be limited.
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