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Draft Texas budget would cut spending 16 percent

01/18/2011 11:34 PM

01/19/2011 7:32 PM

AUSTIN -- Lawmakers got their first detailed look at the dire impact of the state's budget shortfall Tuesday night with the release of a draft budget that would reduce spending by 16 percent and cut 9,610 positions from state government.

The so-called base-line budget, prepared by the Legislative Budget Board, will serve as the starting point for determining spending over the next two years as legislators confront a multibillion-dollar shortfall caused by a steep decline in sales tax revenue during the recession. The debate will last for months.

The recommendations showed reductions in every category, including a 24.6 percent drop in health and human services and 13.1 percent in public education, which collectively form the bulk of state spending. The budget also called for a steep retrenchment in general government -- 23.8 percent -- and a 12.7 percent reduction in public safety and criminal justice operations, including the state prison system.

Higher education would face a 7.6 percent cut.

Although the impact on North Texas wasn't immediately clear, cuts in higher-education assistance are likely to be felt at the region's three major public universities: the University of Texas at Arlington, the University of North Texas in Denton and the University of Texas at Dallas.

The University of North Texas Health Science Center at Fort Worth will sustain a $2 million reduction for uncompensated care authorized by the last session of the Legislature, according to the budget summary. Four two-year colleges, including Ranger College in Eastland County, would be closed to save $39 million in the next two-year budget under the plan.

House budget writers had planned to publicly release the budget Tuesday but decided to distribute it exclusively to House members later in the evening to avoid upstaging inauguration ceremonies for Gov. Rick Perry and Lt. Gov. David Dewhurst. The board planned to post the document on its website this morning.

The base-line budget calls for a total of $156.4 billion for spending from federal and state revenue, a reduction of $31.1 billion, or 16.6 percent. The state funds come from dedicated and discretionary general revenue totaling $79.3 billion, a decrease of $9.2 billion, or 10.4 percent, according to the report

State general revenue that is not dedicated to specific programs is the amount that lawmakers will have available as they decide the level of services. GOP leaders are committed to overcoming the shortfall through targeted reductions without raising taxes. Outnumbered Democrats say they will fight to avoid deep reductions in education, health and social programs.

The plan calls for a 10 percent rate cut for providers of Medicaid, the fast-growing program providing insurance coverage to indigent children, elderly and disabled people. In their summary, budget writers said healthcare appropriations constitute 36 percent of the state budget and cited healthcare costs as "the state's single largest budget driver."

"Other significant factors affecting the cost of state government include public and higher-education enrollment, prison incarceration, and certain health and human services programs," the budget document said.

The proposal adhered to Perry's pledge to avoid additional taxes. The proposal does not tap the so-called rainy-day fund even though many lawmakers wanted to do so to help avoid cuts. The fund balance is expected to be $9.4 billion in fiscal 2013.

Perry, who was sworn in to a third full term, pledged in his inaugural address that "tough times dictate government doing more with less." But he pledged that the state will not turn its back on "the frail, the young, the elderly on fixed incomes, those in situations of abuse and neglect, people whose needs are greater than the resources at their disposal."

"We will protect them, support them and empower them but cannot risk the future of millions of taxpayers in the process. We must cut spending to keep our economic engine on track."

The Texas Conservative Coalition Research Institute, in a 67-page report released Tuesday, identified $21.3 billion in savings and reductions that its leaders said could balance the budget without increasing taxes. One objective, the report said, would be to strip away "layers of bureaucracy" in public education.

Dave Montgomery is the Star-Telegram's Austin bureau chief. 512-476-4294

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