The cuts in education we’re being told are starting to startle even purported pro-public education Republicans. But there’s a difference between being startled and what truly scares them. As we see from GOP state Sen. Florence Shapiro and her GOP cohort in the House Rep. Rob Eissler, No easy answers for deep budget cuts in education.
Here’s one way Texas legislators could trim the state’s tab for public education by nearly $10 billion : lop off 48 days from the school year.
“We’d win the 5- to 18-year-old vote forever,” quipped House Public Education Committee Chairman Rob Eissler , R-The Woodlands.
Or perhaps they could allow school property tax rates to increase by one-third, which would increase the annual tax bill for a $200,000 home by $555 .
“Don’t even go there,” said state Sen. Florence Shapiro , R-Plano, chairwoman of a special committee on public school funding.
[...]
The severity of the needed cuts hit him last week when the Texas Education Agency laid off scores of employees, he said.
“Those are real people losing jobs, and that’s depressing,” Eissler said.
Finding efficiencies in schools, improving productivity and culling non-classroom positions have been paramount for Shapiro. But the tangible and immediate savings to the state that would come with such changes are unclear.
“Money is not out there. We’ve got to find public policy changes that actually get us closer to what we want,” Shapiro said.
While Eissler is joking one minute, he then tries to show empathy by saying how “depressing” it is that “real people” are getting laid off. All joking aside it’s clear that Sharpiro and Eissler are willing to look at any kind of cut, in their opportunistic agenda to finally devastate public education.
But what they are unwilling to look at is raising taxes on the wealthy who have been paying an unfairly low amount taxes in Texas for years. Well, they are their true constituents, after all. It’s not the inner city, and rural school children and their parents that bankroll Shaprio and Eissler’s reelection campaigns. It’s the wealthy and their PAC’s that keep them in office.
GOP state Sen. Steve Ogden said today that the, Budget “decimates” public education. I’m sure that makes him feel depressed just like it does Eissler. But it likely doesn’t make him feel bad enough to ask those with more to finally start paying their fair share of taxes.
This is the opportunity the Texas GOP has been waiting on for decades. To roll back any and all social spending they deem unnecessary, which includes public education. As we’ve said many time before, look who is being asked to sacrifice. They never ask for anything from those who have profited so much in Texas.
The Tea Party stands strongly for interpreting the constitution according to original intent. As constitutional history shows, when Texas citizens created the Rainy Day Fund by constitutional amendment in 1988, they voted to save money in good times to pay for recurring expenses during bad times. The 1988 ballot language reads: “The constitutional amendment establishing an economic stabilization fund in the state treasury to be used to offset unforeseen shortfalls in revenue.” Original intent had nothing to do with emergencies such as hurricanes or a buffer to pay debt on bonds as you suggest; rather it was about protecting Texas during economic downturns.
When the constitutional amendment was proposed, how the fund was to work was clearly explained: In good times the state would pay for services with General Revenue while saving money from oil and gas taxes in the Rainy Day Fund. In bad times, when the state had less General Revenue, it would pay for services with the money saved in the Rainy Day Fund. Then, when good times returned, General Revenue would rebound, and the state would switch back to paying for services with General Revenue and saving in the Rainy Day Fund.
Your suggestion that money in the fund be “returned to the taxpayers of Texas” violates original intent. When voters approved using the Rainy Day Fund to offset shortfalls in revenue during an economic downturn they did not approve taxing one group to give money to another group. Look at it this way: If the state collects a tax from Jim for a public purpose, and then decides not to use the money for that purpose, the state can’t simply give the money to Sally. Conservative principles stand in the way of this sort of wealth redistribution.
The balance in the Economic Stabilization Fund should continue to accumulate and be held in reserve to address future potential shortfalls as a consequence of the current economic downturn. Comptroller Susan Combs has warned that the impact of the financial crisis will be felt not in the 2010?11 state budget, but two years from now as the 82nd Texas Legislature writes the 2012?13 budget. Retaining the entire balance in the Economic Stabilization Fund is important so that the state does not have to cut essential programs or raise taxes in response to an anticipated budget shortfall in 2011.
Texas conservatism is like the Texas weather, wait 20 minutes and it will change.
It’s been a while since we’ve written about road/highway funding in Texas but suffice it to say that EOW has wasted a lot o bits and bytes on the issue. Today there is an interesting article on the subject in the FWST, Texas Transportation Department going into debt to pay for road work.
Texans are increasingly borrowing from their children to pay for the roads they are using today.
Unable to persuade lawmakers to raise gas taxes or vehicle registration fees, the Texas Department of Transportation is going deep into debt to build roads and keep up with the state’s explosive growth.
Since 2001, legislators and voters statewide have allowed the department to use a variety of new tools to speed up road work. That eased traffic congestion in the short term — but now nearly $1 billion of the agency’s roughly $8 billion annual budget goes to debt service.
It wasn’t always that way. Traditionally, roads weren’t built until the state had cash in hand. But many long-awaited projects were delayed because of chronic funding shortages.
“We’ve advanced as much as we can with the ability to borrow funds,” Transportation Department spokeswoman Jodi Hodges said. “Now we’re having to pay it back with interest.”
Texas has borrowed $11.9 billion, which will cost $21.1 billion including interest and other fees, to pay back over 30 years, said state Rep. Joe Pickett, D-El Paso.
Some of the money repays debt from bond sales. Some goes to reimburse cities and counties, which use property tax-backed bonds to build roads.
“At the end of the day, there’s not going to be any new money,” Pickett said. “So we’re leaving it up to the communities to handle this crisis.”
Some of the money is paired with private equity from private developers: the North Tarrant Express project on Loop 820 and Texas 121/183 in Northeast Tarrant County, for example. The developers bring in their own funds to a project in exchange for control of the roads and toll collection for 52 years.
Though some Texas leaders criticize the federal government for engaging in expensive programs that mortgage the nation’s future, the state is arguably doing something similar by increasingly relying upon alternative financing options such as debt and public-private partnerships that commit public resources for decades.
Even so, supporters of the approach say building the roads now — even if Texas can’t put cash on the barrelhead — is a worthwhile investment.
[Emphasis added]
There are a few things that must be corrected about the narrative, or frame, of this article. It’s not TxDOT’s job to persuade the state elected leaders to raise taxes or fees to pay for roads. The transportation commissioners in Texas are appointed by the governor. Making those who run TxDOT for the last, oh say 17 years, beholden to GOP governor’s. Who have been against raising any tax, no matter the need.
Texas has never been a “liberal” state even when it was run by the Democrats. And the legislature, despite only being taken over by the GOP in 2003, had been dominated by “conservative” Democrats and GOP legislators for much longer than that. The gas tax in this state has not been raised for 20 years, while the cost of everything related to building and maintaining roads has gone up. It should not surprise anyone then that the only way Texas can now afford to build roads it to borrow money (financed by large banks), or sell/lease our precious resources to corporations.
With that as the frame it’s easy to understand why we’ve gotten to this point. The thirty-year destruction of working and middle class in our state and country is finally coming to it’s apex. If we do not have a fair tax system in Texas these types of rigged market, disguised as free market, schemes are all we are left with. This kind of scheme will now be tried with public education, health care, etc.. in Texas. Unless we make our elected leaders change course.
The Texas Progressive Alliance would like to thank the Academy for this week’s blog roundup.
Off the Kuff published an interview with Chris Barbic, founder and CEO of the YES Prep charter schools, which included a discussion of what the looming budget cuts will do to charter schools.
Redistricting endangers several Texas House representatives, Democratic as well as Republican. The mapmakers may need long knives instead of sharpened pencils (since we can all do maps online now). PDiddie at Brains and Eggs summarizes the opening of “negotiations”.
How can Wall Street destroy a global economy and walk away unscathed by it? Easy. The revolving door between government and Wall Street. There are plenty of high profile cases such as Orszag to Citi and WilliamDaley from JP Morgan to the White House or even the more recent departure of a senior FDIC official to Goldman, but it happens throughout Washington in Congress as well as the agencies. It’s rotting the system to the core and nobody in Washington cares. There are future job prospects to consider after all. Country? How much can it really pay compared to business?
The Governor decried “sanctuary cities” as a statewide emergency and legislators have scurried to file bills forcing local police and sheriffs to more directly confront immigration violations instead of merely identifying illegal immigrants after arrest. Some of them are so extreme the proposals forced the governor to walk back his comments somewhat a few days later. This week, law enforcement interests at the capitol this week rightly pointed out that bills to address this non-problem amount to an unfunded mandate. From Zahira Torres at the El Paso Times.
If you have a few moments free to watch some really well done documentary reporting, check out this piece from al Jazeera on American helicopter transport medics in Afghanistan.
The Williamson County Democratic Party sent out a press release this week reinforcing that Democrats in Williamson County know that teachers and students are the most important issue in the coming public education budget fights.
•Williamson County Democratic Party•
1901 E Palm Valley Blvd., Suite 216•Round Rock, TX 78664
FOR IMMEDIATE RELEASE
THURSDAY, FEBRUARY 24, 2011
Democrats in Williamson County Emphatically Support Teachers
Democrats understand that to protect our democracy and empower our children for the future we must have a well educated citizenry. A good education truly is the best investment in the future we can make.Democrats will not stand idly by while Republicans demonize teachers.Everyone knows that teachers work long hours for modest pay, we should be working with them to prepare students, our children, for life and future success.
Public education has long been on the Republican Party’s wish list of things to cut [1]. In Texas, the structural deficit created by Governor Rick Perry’s property tax scheme set the stage for this attack on public education. Texas Monthly senior political editor Paul Burka said, “Our state leaders have known about this since 2006 when they paid no heed to the comptroller’s fiscal note.” [2]
Experts are now saying that the current GOP budget proposals will damage public education in Texas so much that, “by 2040 three out of every 10 Texas workers will not have a high school diploma.”[3] Steve Murdock, U.S. Census Bureau director for the in the Bush administration agrees, “We are lagging now and to fail to educate this population is a formula for long-term disaster for Texas…. The thing that is most important for us to recognize is that what we do today with these young people will determine the future for all of us.”
Here in Williamson County there will be some truly devastating cuts [4] [5] [6] which will not only cost jobs, but will increase teacher/student ratios, reduce educational resources, and jeopardize the over all quality of our children’s education.
“Democrats in Williamson County emphatically support teachers,” said Williamson County Democratic Party Chair Brian Hamon. “Our future is in their hands. Parents understand that professional educators directly impact our children’s prosperity. All taxpayers in communities near good schools enjoy higher property values and access to better jobs. When we invest in education, everyone benefits.”
While inequality is growing across the country, inequality has been running rampant in our state, and also at the local (city and county) levels for some time. The main reason inequality is so bad in Texas is because we have a very regressive tax system. That is a system where the less money someone makes a higher percentage of their income goes to taxes. The opposite is also true, the more money someone makes a lower percentage of their income in taxes. The main reason for that is that in Texas we don’t use one of the fairest taxes there is, a progressive income tax.
Texas is a low service state because of that. We can only take so much from poor, working and middle class Texans before it starts to hurt really bad. Which is what is happening now. All the while the wealthy are continuing to less and less in taxes compared to those who earn less. The wealth is not trickling down as was promised. It’s important also to understand there is a different way (more on that later).
The reason this is important right now is because we have a demand problem in our economy. When those in the lower an middle income ranges have less disposable income, they can no longer afford to buy much more than the necessities of life. When gas, groceries, mortgage/rent, utilities and insurance take most of your money it’s not possible to buy much else. And the overall economy begins to suffer. That’s what has been happening over the last several decades, as the inequality has grown, the buying power of the working and middle class shrank.
The problem in Texas is not that taxes are too high in general, it’s that taxes are too high on those with low and modest incomes and not high enough on those with higher incomes. It has become increasingly clear that the scheme the GOP has been running is to make everyone believe that their taxes keep going up. And for those of us in the lower and middle incomes levels that has been true for the last 30+ years. But for anyone at the higher levels the exact opposite has been the case.
Here’s what the tax disparity looks like in Texas:
There are ways to address this right now without a state income tax. We can certainly put sales taxes on services that are currently exempt, specifically those that impact the wealthy more – like elective plastic surgery, legal fees, etc.., and keep things like milk, and day care exempt. Higher sales taxes on “big ticket” items – vehicles over $50,000, higher property taxes on the value over 250,000, as examples.
It will be impossible to get a handle on our budget problems at any level – federal, state, and local – until we address the underlying problems of income and wealth inequality. That can’t be done until we have a fair tax system.
The balance in the Economic Stabilization Fund should continue to accumulate and be held in reserve to address future potential shortfalls as a consequence of the current economic downturn. Comptroller Susan Combs has warned that the impact of the financial crisis will be felt not in the 2010?11 state budget, but two years from now as the 82nd Texas Legislature writes the 2012?13 budget. Retaining the entire balance in the Economic Stabilization Fund is important so that the state does not have to cut essential programs or raise taxes in response to an anticipated budget shortfall in 2011. – To see who signed onto that statement in 2009 click here. I think you will be surprised.
It looks like the reality of the budget situation in Texas is starting to set in for many Texas Republicans. They are beginning to say out loud that the Economic Stabilization Fund, aka the Rainy Day Fund (RDF), will be used to help fill the $27 billion budget shortfall.
Senate Finance Chairman Steve Ogden, R-Bryan, the Senate’s chief budget writer, told the Star-Telegram on Wednesday that he believes lawmakers will be forced to draw from the fund as they try to write a balanced budget for the 2012-13 fiscal biennium.
“We’re going to have to use a substantial amount of the rainy-day fund if we’re going to pass a budget,” Ogden said.
The senior Republican lawmaker said he hasn’t determined a likely amount but will have a “better idea” of how much would be needed as his committee maps out spending obligations for two high-cost priorities — public education and Medicaid.
[...]
“I think we’re going to have to,” said Sen. Chris Harris, R-Arlington. “At this point I can’t really come up with a number. There’s been talk of leaving $2 billion to $3 billion in it for the next session.”
As the senators took questions from the media at the conference, Shapiro also said she believed the Legislature would use some of the Rainy Day Fund to increase general revenue in the budget.
Now that it looks like many Republicans want to use the RDF, the GOP will have to start scrounging for votes to get it passed. They need two-thirds in both chambers to use if for the budget shortfall. But to get to that number the GOP will likely need votes from Democrats in both chambers. (With 102 in the House they could pass this without Democratic support, but I’d bet a paycheck that at least 3 Republicans in the House will vote against this). Here’s what Democratic state Sen. Wendy Davis had to say about the RDF:
Sen. Wendy Davis, D-Fort Worth, said that she would also favor using the fund if Republican legislative leaders first commit to correcting a so-called structural deficit created in 2006 when the Legislature compressed property taxes and created a business tax that has subsequently underperformed.
That is solid reasoning from Davis. Yes we should use the RDF to cover for the current structural deficit we have that was created by Perry and the GOP in 2006. But we should also fix the structural deficit first so that we don’t have to do this every session. Makes sense.
Despite what you may have heard in the last month or so, income stagnation for working and middle class Americans, and massive income gains for the richest of the rich over the last 30+ years, is the true legacy of Ronald Reagan’s time as President. It’s called plutocracy – government by the wealthy – a word everyone should get familiar with if they aren’t already.
The first is this: Income inequality has grown dramatically since the mid-’70s—far more in the US than in most advanced countries—and the gap is only partly related to college grads outperforming high-school grads. Rather, the bulk of our growing inequality has been a product of skyrocketing incomes among the richest 1 percent and—even more dramatically—among the top 0.1 percent. It has, in other words, been CEOs and Wall Street traders at the very tippy-top who are hoovering up vast sums of money from everyone, even those who by ordinary standards are pretty well off.
Second, American politicians don’t care much about voters with moderate incomes. Princeton political scientist Larry Bartels studied the voting behavior of US senators in the early ’90s and discovered that they respond far more to the desires of high-income groups than to anyone else. By itself, that’s not a surprise. He also found that Republicans don’t respond at all to the desires of voters with modest incomes. Maybe that’s not a surprise, either. But this should be: Bartels found that Democratic senators don’t respond to the desires of these voters, either. At all.
While Reagan may have started it both parties are now mostly controlled by the rich, and rich corporate interests. As shown in the post below unions, public employees, and their pensions have nothing to do with the budget crises we are facing in our states. This crisis was caused by the “gigantic criminal fraud scheme” run on us by Wall Street.
Everyone also must look at these stunning graphics on just how unequal, and un-Democratic, our country has become, It’s the Inequality, Stupid. And don’t think this same thing has not happened in Texas.
In Texas we are ruled by very wealthy plutocrats (Dewhurst, Straus, Perry, Ogden) and Texas became even more plutocratic after the last election. The way our state Senators and Representatives are paid the only people who can afford to hold office are those who are independently wealthy. It’s a very plutocratic governing system we have here in Texas.
We, working and middle class Americans and Texans are the only ones who can change this.
Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.
“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”
I put down my notebook. “Just that?”
“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”
Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.
The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.
He was also on Democracy Now recently and had this to say about how this all ties in to what is going on in Wisconsin and public pensions and unions.
AMY GOODMAN: Welcome to Democracy Now!, Matt Taibbi.
MATT TAIBBI: Thanks for having me back.
AMY GOODMAN: Well, we’re seeing these mass protests in Madison, Wisconsin, and there’s other protests that are happening. We see the working poor, the middle class, under tremendous stress, and yet they’re the ones who are being hit hardest, not Wall Street. Explain what has happened. Why isn’t Wall Street in jail?
MATT TAIBBI: Well, it’s an incredible story. I mean, just to back up and provide some context, I think, for this Wisconsin thing, and especially for the Ohio thing, given what their governor used to do for a living—
AMY GOODMAN: Explain.
MATT TAIBBI: Well, he was an employee for Lehman Brothers, and he was—
AMY GOODMAN: This is Governor Kasich.
MATT TAIBBI: Governor Kasich, yeah, and he was intimately involved with selling—getting the state of Ohio’s pension fund to invest in Lehman Brothers and buy mortgage-backed securities. And of course they lost all that money. And this, broadly, was really what the mortgage bubble and the financial crisis was all about. It was essentially a gigantic criminal fraud scheme where all the banks were taking mismarked mortgage-backed securities, very, very dangerous, toxic subprime loans, they were chopping them up and then packaging them as AAA-rated investments, and then selling them to state pension funds, to insurance companies, to Chinese banks and Dutch banks and Icelandic banks. And, of course, these things were blowing up, and all those funds were going broke. But what they’re doing now is they’re blaming the people who were collecting these pensions—they’re blaming the workers, they’re blaming the firemen, they’re blaming the policemen—whereas, in reality, they were actually the victims of this fraud scheme. And the only reason that people aren’t angrier about this, I think, is because they don’t really understand what happened. If these were car companies that had sold a trillion dollars’ worth of defective cars to the citizens of the United States, there would be riots right now. But these were mortgage-backed securities, it’s complicated, people don’t understand it, and they’re only now, I think, beginning to realize that they were defrauded.
This is really disgusting. The crisis that Wall Street caused has caused the budget deficits in our country and in our states. No one from Wall Street has paid financially or legally for what they have done to us. And now they want to take more from workers and the middle class. Despicable.
To understand what is and has been going on, it cannot be recommended too highly, that you read the article and watch the video, and this paper from Dean Baker, The Origins and Severity of the Public Pension Crisis.
Wilco Democrats Happy Hour Thursday, February 24, 2011, 06:00pm
Join the Williamson County Democratic Party (WCDP) for a special Happy Hour in Florence, Texas. Starting at 6 p.m., meet to celebrate friendship, democracy and great barbeque at The Flamin Grill, located at 212 E Main St., in Florence, Texas. So, come hoist a glass as they plan for the future of Williamson County. For more information, visit our website at www.wilcodemocrats.com, or contact Rachael at wilcoevents@gmail.com.
