Texas Budget - Smoke & Mirrors (& Lies)

If you listen to Texas Governor Rick Perry you might think the Texas legislature has just done the impossible. Perry says they have balanced the budget, closing a $27 billion budget hole for the next biennium, without raising any taxes and leaving $6 billion untouched in the state's "Rainy Day Fund". If that was true it really would have been an incredible feat -- worthy of a superhero. But it isn't. It's just an illusion performed with smoke and mirrors (although a trick any magician/bookkeeper would be proud of).

The state constitution requires a balanced budget, but the Texas budget for the next biennium is not truly balanced. The legislature just did some bookkeeping tricks and put off paying for billions in some programs. They just shoved some bills off on the next legislature which meets in 2013 (and is now assured of facing the same kind of debt this legislature did -- and refused to deal with).

First, let's look at that "untouched" $6 billion dollars in the Rainy Day Fund. Like it or not, that money is actually as good as spent. You see, the state couldn't figure out how to pay for Medicaid without either raising taxes or using the Rainy Day Fund, so they just left it out of the budget. This gives the illusion of a balanced budget and an unused Rainy Day Fund, but it is just an illusion. The Medicaid must be paid for eventually, and it will pretty much eat up all of that $6 billion in the Rainy Day Fund when it is paid (but this won't have to happen until after the 2012 election, so the GOP can go into that election with voters ignorant of this truth).

This is even admitted by some of the Republicans. Rep. Phil King (R-Weatherford) said, "The Rainy Day Fund is probably already spent with the Medicaid costs and public education." Sen. Charles Perry (R-Lubbock) said, "There's been a lot of misinformation out there that there's $6 billion dollars in the fund that's not been used. It's been used."

And then there are the games the legislature played with education funding. First, they funded education as though there would be no growth in the student population for the next biennium -- a physical impossibility since Texas is one of the fasted growing states in the nation population-wise.

Then, after outright slashing more than $4 billion from education funding, they voted to delay a $2.3 billion payment to the state's schools for the 2012-13 biennium until the first day of 2014. That means the new legislature meeting to find the 2014-15 biennium will have to come up with that money immediately -- before they can start planning the 2014-15 budget. In other words, they just kicked the can another two years down the road.

Just those little bookkeeping tricks with Medicaid and education means the budget is actually about $10 billion out of balance (assuming the growth in Medicaid and student population doesn't push it up even further).

As for not raising taxes, they isn't strictly true either. While the sales tax has remained at the same rate, the state has raised all kinds of "fees". They have also taken money the public was told had been dedicated for certain things (like specialty license plates that was supposed to feed money into cancer research) and put a huge chuck of the money into the general fund -- which is nothing short of legalized theft. And the huge cuts to education will probably force many school districts across the state to raise property taxes.

Governor Perry and his GOP cohorts can brag about the new budget all they want, but the truth is they did not balance the budget, they did use the Rainy Day Fund up, and they raised taxes. They have violated every pledge they made to the voting public.