Texas Cutting $5 Billion From Public Schools

AUSTIN, Texas — Public education in Texas is facing billions in proposed budget cuts that would include slashing arts education, pre-kindergarten programs and teacher incentive pay as lawmakers take on a massive deficit with the promise of no new taxes.

Lawmakers got their first glimpse of what the next state budget might look like late Tuesday, including the $5 billion cut to public schools, as Republican Gov. Rick Perry and his supporters were dancing at an inaugural celebration.

Texas is facing a $15 billion revenue shortfall, and few corners of state government were spared in the draft proposal for the next two years. The Texas Constitution requires a balanced budget, and Republican leaders have vowed not to raise taxes.

But the budget does propose millions of dollars in new fees. For instance, state employees and retirees who smoke would pay a $30-a-month "tobacco user monthly premium surcharge" and the attorney general's office would charge an "annual child support service fee," a "monthly child support processing fee" and an "electronic filing of documents fee."

The budget draft, which is expected to be filed as legislation in the House later this week, would spend $73.2 billion in state money and $156.4 billion in all funds for the 2012-13 budget period.

It would shutter four community colleges and generally eliminate financial aid for incoming freshmen and new students. The Texas Grants scholarship program would drop by more than 70,000 students over the next two years.

The proposal also would reduce reimbursement rates by 10 percent for physicians, hospitals and nursing homes that participate in Medicaid – a decrease that could eventually dry up participation in the health care program for poor and disabled Texans. In all, $2.3 billion would be cut from Medicaid, the Children's Health Insurance Program and other health and human services.

The plan would eliminate 9,600 state jobs over the next two years, including more than 1,500 jobs in the prison system. The Department of Criminal Justice faces $459 million in cuts, including a 14 percent reduction in psychiatric and pharmacy care for inmates.

`'It's a catastrophe. No financial aid for kids to go to college. No pre-kindergarten for kids to learn their numbers and their letters. Health and human services slashed," said Rep. Pete Gallego, D-Alpine. `'No Texan can be proud of this."

The Legislative Budget Board was required by law to release the budget to leaders Tuesday, the fifth business day after the session starts. The draft is just the beginning of a long process, which probably won't be finalized until next summer when the governor signs the Texas budget for 2012-13.

Perry took the oath of office earlier Tuesday for his third term. After a day of parties, he spent the evening at a celebration in downtown Austin, just a mile from the Capitol. The inaugural was paid for by donors.

Some analysts say the true shortfall could be much higher than $15 billion – closer to $27 billion – to account for enrollment growth in public schools and on Medicaid rolls, cost increases and other variables. That figure amounts to almost a third of discretionary state spending in the current budget.

The proposal would make public school finance reform legislation almost inevitable. It also would mean about 100,000 children would no longer have access to pre-kindergarten, schools won't get help building new science labs and would end a program that helps students earn promotion to the next grade.

The plan would slash $772 million for Texas colleges and universities, including nearly $100 for flagship universities Texas A&M University and the University of Texas at Austin. The two-year colleges that would be closed are Brazosport College in Lake Jackson, Frank Phillips College in Borger, Odessa College and Ranger College.

The state's contributions to the state employee retirement fund would be reduced from 6.95 percent to 6 percent, less than what is needed to maintain the fund, according the Legislative Budget Board. The base budget proposes a similar cut in contributions to the Teacher Retirement Fund.

While almost every other state agency would see a reduction in employees, the average number of full-time employees in Perry's office over the next two fiscal years would go to 132 from an average of 120.

The base budget does not use money from the state's Rainy Day Fund, expected to have a balance of $9.4 billion at the end of the next biennium.

"Texas needs a balanced approach that includes using the Rainy Day Fund and adding new revenue," said Scott McCown, executive director of the Center for Public Policy Priorities, which advocates for needy Texans. "With a revenue shortfall this large, as the proposed budget shows, the Legislature cannot balance the budget through cuts alone without doing terrible damage."

Rep. Jim Pitts, the chairman of the House Appropriations Committee, said he would explain the proposal to the chamber on Wednesday.

"There are no sacred cows for this next biennium for our introduced bill," Pitts said last week. "So many people said, 'You cannot cut education'. You can't not cut education . . . We will be cutting every article within our budget. We will be cutting health and human, we will be cutting education and we'll be cutting our own budget in the Legislature."

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Associated Press writers Chris Tomlinson, Jim Vertuno and Jay Root contributed to this report.