Taking on Texas-sized austerity

DEPENDING ON who you ask--or when you asked them--it's either the best of times or the worst of times in the state of Texas.

Last November, Rick Perry campaigned and won a fourth term as governor with the claim that Texas was largely immune from the economic hard times gripping the rest of the nation--thanks to his wise leadership, of course.

Now, Perry and the Republicans in the Texas legislature are poised to slash $31 billion in state spending over the next two years in a state that already spends minimally on health, education and other essential services.

A short list of their budget proposals includes:

A $16 billion cut in health and human services spending, amounting to a 25 percent cut overall.

A 30 percent cut in contributions to Medicaid, which would threaten health clinics for the indigent and result in the closure of hundreds of nursing homes.

The axing of 10,000 state jobs

Huge increases in health care costs for state workers, amounting to as much as $2,760 per year for workers with dependents.

A $1.7 billion cut in funding for Texas colleges and universities, and the axing of 60,000 college students from state-sponsored financial aid.

A reduction of up to $9.8 billion in obligatory funding for school districts for primary and secondary public education.

As incredible as these numbers are, they don't quite capture the full human impact of the cuts. At recent hearings, parents of the mentally disabled, group home and treatment center staffers, and people with traumatic brain injuries told gut-wrenching personal stories as they appealed to Texas senators not to slash funding for life-saving services.

Bill Gilstrap, a 53-year-old welder with bipolar disorder is looking at the possible closure of a mental health center he has been going to for 14 years. "The stark reality of my situation is that if I wasn't getting quality outpatient services, I'd be in a psychiatric hospital or I'd be in jail," Gilstrap told the Austin American-Statesman.

Adding insult to injury, Perry and his Republican cronies seem completely indifferent to the human suffering that will result from the cuts. "I don't think there is anything [in the budget] that is so important that cannot be either appropriately reduced or, for that matter, eliminated," Perry told reporters in January.

The budget process will likely ramp up after the legislature considers bills deemed "emergency items" by Perry, including one requiring doctors to perform a sonogram on women seeking abortion, and another targeting "sanctuary cities" for immigrants. Republican legislators have also filed 40 anti-immigrant bills, including some modeled after Arizona's notorious racial profiling law known as SB 1070.

IN HIS 2010 reelection campaign, Perry declared Texas "open for business," and claimed that the state had a budget surplus. Since then, he has repeatedly claimed that his business-friendly economic policies have led to job-creation and low unemployment.

"Given our state's economic success compared to that of other states and Washington's ongoing irresponsibility, I believe Texas will lead the way out of this turmoil," Perry stated in his inaugural address last January.

But as economist Paul Krugman has pointed out, "[W]hen you look at unemployment, Texas doesn't seem particularly special: its unemployment rate is below the national average... but it's about the same as the unemployment rate in New York or Massachusetts."

But now, with the looming budget crisis, a different picture of Perry's Texas is starting to emerge--a state that has financed tax breaks for business by slashing state spending with disastrous social consequences.

A new edition of a report commissioned by a research caucus in the Texas House of Representatives found that--before the proposed cuts have gone through--Texas currently ranks 50th among all states in mental health spending, 49th in per capita spending on Medicaid, 43rd in high school graduation rates, and 45th in SAT scores.

Meanwhile, Texas ranks first in the percentage of children without health insurance, second in the percentage of the population living with food insecurity, fourth in the percentage of the population living in poverty, and first in carbon dioxide emissions, water pollution and hazardous waste.

The assault on school funding--which comes as school districts are already reeling in the face of huge budget shortfalls--has sent the biggest shock waves through the state. The Dallas Independent School District, for example, faces a deficit of $250 million.

The proposal to cut $9.8 billion in state spending for primary and secondary education doesn't take into account Texas' growing school enrollment or a projected decline in local property taxes for schools--nor the $3.3 billion in the last budget that Texas received as part of federal stimulus outlays, despite Perry's predilection for bashing "irresponsible" federal spending.

The potential cumulative effect of the proposed cuts could also undermine Texas' vaunted low unemployment rates. Some analysts predict that combined job cuts at the state and school district level, plus the "multiplier effect" of such cuts on the broader economy, could produce a total loss of upwards of 400,000 jobs.

This "tale of two states" is really two sides of the same coin in Perry's neoliberal Texas. As Krugman put it:

The truth is that the Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances in the face of a serious "structural" budget deficit--that is, a deficit that persists even when the economy is doing well. When the recession struck, hitting revenue in Texas just as it did everywhere else, that illusion was bound to collapse.

Texas' loophole-ridden business tax, known as the Franchise Tax, accounts for just 4 percent of revenue in the current budget cycle, with a highly regressive sales taxes making up 22 percent of revenue. The persistence of the state's structural "revenue problem" has even led some Texas Republicans to consider closing some business tax loopholes, even as they resist calls to raise taxes.

Texas is, of course, home to some of the richest corporations in the world. ExxonMobil, based in Irving, reported earnings of $30.7 billion last year and returned a total of $19 billion to shareholders.

And with no state income tax, low-income households pay much more in taxes relative to income compared to the wealthiest households, according to the Center for Public Policy Priorities.

Opponents of the cuts have called on the state to release $9.4 billion from a "Rainy Day Fund" the state has stashed away for "emergencies." But hewing to his neoliberal agenda, Perry has resisted calls to use the Rainy Day Fund even as other Republican legislators warm up to the idea.

In fact, there is now talk of using the fund to close a $4.3 deficit in the current budget, which would leave even less money to make up for the massive cuts proposed for 2012-2013.

THE BREADTH and depth of the proposed cuts--and the inspiration of the struggle in Wisconsin to defend public workers--is producing a brewing fightback against the budget slashers, and especially against the attack on public education.

It is at the school district level that some of the worst effects of austerity are becoming immediately apparent.

The school district in the capital of Austin, for example, is considering plans to close up to 15 schools, largely in the urban center of the city, and it just announced layoffs for 1,150 teachers, staffers and special education assistants in the coming year.

The announced plans to close schools--tabled for now in the face of a public outcry--produced a series of stormy meetings with district officials and a mushrooming of grassroots efforts to keep targeted schools open. In January and February, there were a series of weekend marches in Austin organized by the various schools on the chopping block. A new Coalition to Save Austin's Urban Schools was formed.

On Friday, March 4, hundreds of students from Dallas' Lincoln High School walked out of class and staged a protest against teacher layoffs. "If we lose our teachers we lose our students," Student Council President Damarcus Offord told reporters.

College students are organizing against the cuts as well. At the University of Texas at Austin--which has seen steadily rising tuition, a 5 percent budget cut last year and layoffs of 300 instructors and staffers--there has been a numbers of protests against new cuts which largely target ethnic and gender studies. Last week, over 100 UT students marched from the campus to the State Capitol building, where university President Bill Powers was testifying about funding for higher education.

Members and supporters of teachers' and state employees' unions are gearing up for rallies at the state Capitol building in the run-up to June, when the budget process is supposed to be completed.

And on March 12, thousands of people are expected to attend a statewide "Save Texas Schools" march and rally at the Capitol, a protest which has become the first rallying point for all parties standing against the cuts.

A huge turnout for March 12 will send a message to the budget-slashers: that ordinary people in Texas will not stand by while a budget crisis manufactured by Perry and company is balanced on our backs.