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By Robert T. Garrett
The Dallas Morning News
Tuesday, March 1, 2005
State may restore cut programs
AUSTIN – Top Republicans are joining Democrats in the push to undo about $2 billion in budget cuts, acknowledging that GOP leaders went too far with reductions in 2003.
While final decisions are weeks away and school finance may trump all other concerns, there appears to be bipartisan support for restoring funds for teacher benefits, textbooks, health insurance for children, child-abuse prevention and other programs.
"There's been some political backlash over the [children's health insurance] reductions we made last session," said Senate Finance Committee Chairman Steve Ogden.
The Bryan Republican said he will bow grudgingly to colleagues who want to expand the Children's Health Insurance Program, which assists families earning low wages.
"There will be a concerted effort to restore almost all of those cuts," Mr. Ogden said.
Several factors have loosened the purse strings. One is political: The budget cuts hurt two top House Republicans who were ultimately defeated in November. Also, the economy has picked up, providing a rosier picture for budget writers.
In addition, Republicans have fewer qualms about waste and undeserving beneficiaries because of recent agency mergers and tightened eligibility rules for some social programs. Lawmakers have also realized that some of the cuts made two years ago to avoid a tax increase may cost more in the long run by curtailing access to preventive medicine, taking away federal matching funds and strapping local governments.
The projected surplus is $400 million – small change in a budget expected to spend $130.5 billion of state and federal revenues over the next two years. It's unclear where the restored spending would come from if approved, but lawmakers are looking at squeezing other agencies, drawing more federal funds and making government functions more efficient.
Some Republicans who worked to end Democrats' grip on the House in 2002, giving the GOP complete control of state government, worry there's too much backpedaling.
John Colyandro, executive director of the Texas Conservative Coalition, a group of lawmakers, has warned the Legislature not to undo last session's cuts in CHIP and Medicaid, the state-federal health program for the poor, elderly and disabled.
"Added services and added benefits tend to become entitlements, and that just adds to the fiscal strain on an already straining system," he said.But Mr. Ogden and Rep. Jim Pitts, R-Waxahachie, the House's budget chief, noted that when the state spends money on CHIP and Medicaid, it draws federal dollars doled out in generous ratios. That raises the odds that lawmakers will reinstate benefits, increase payments to care providers and reduce multiyear waits by the infirmed for in-home help.
Mr. Pitts said he has told leaders of subcommittees on his panel: "Find money so that we can draw more federal dollars down." Mr. Ogden has done the same.
$10 billion shortfall
Even in education and criminal justice, which don't offer as many low-hanging federal dollars, lawmakers who write the budget argue for some boosts in state spending.
Rep. Lois Kolkhorst, R-Brenham, who heads the House appropriations panel's education subcommittee, said she wants to restore school employees' $1,000 annual health insurance bonuses, which were cut by half or more two years ago, and fund new textbooks. Doing both, though, would cost $1.4 billion.
She also cited as a priority restoring money to programs to end social promotion – the passing of students to the next grade without regard to achievement.
In 2003, lawmakers closed a $10 billion two-year shortfall without raising taxes. Cuts to areas such as higher education, health insurance benefits for state employees and retirees, and some Medicaid reductions aren't likely to be restored, and employees laid off from state agencies probably won't be rehired.
At the time, advocates for poor and sick Texans warned that many of the cuts would save pennies but eventually cost the state big dollars. This session, lawmakers are heeding the lesson on the painful trade-offs. Examples:
•Rep. Vicki Truitt, R-Keller and the House budget panel's point person on Medicaid and CHIP, seeks more than $4 million to restore podiatry coverage for poor adults. "It's insane that we would not provide foot care for diabetics because they're a lot more expensive to accommodate as an amputee," she said. Others want $45 million more to restore the adults' psychotherapy.
•House Speaker Pro Tem Sylvester Turner, D-Houston, said judges and prosecutors have persuaded his GOP colleagues to hire more probation officers and expand treatment programs. The $56 million more for probationers will reduce prison costs, he said.
•Leaving about 40,000 mentally retarded and developmentally disabled Texans on waiting lists for in-home and respite services for years invites families to give up and put them into costly state schools, said Rep. John Davis, R-Houston. "It wears the parents out if they don't get the support," said Mr. Davis, head of the House budget panel on social programs.
•State troopers and other state employees have gone years without a pay raise, plus their health benefits were trimmed in 2003. So troopers are leaving for big-city police departments, and other workers are taking private sector jobs, employee groups say. Mr. Ogden and Rep. Carl Isett, R-Lubbock, a House budget writer, want to add $63 million for troopers' pay and give back-to-back, 4.5 percent annual raises for others, costing $479 million.
Competing demands
If anything, GOP leaders may be hoping to spend too much. Mr. Pitts, the House appropriations chairman, lists $8 billion of increases he would favor. But he thinks available cash will cover half that at best.
"Times are better, but they aren't great," he said.
He said he gasped with disbelief last week when Mr. Davis reported that health and human services programs need $3.5 billion for restorations and to compensate for too-low Medicaid enrollment and cost estimates from the 2003 legislative session.
Other states are in a similar bind, even if most spend more per capita on state services than Texas does.
While states' revenues are up, they haven't grown as fast as spiraling costs in Medicaid, education and corrections, said Arturo Perez of the National Council of State Legislatures. Other programs that were cut during the recent economic slowdown also cry for cash, he said.
"The word 'pent-up demand' was repeated over and over again across the country in our recent survey of legislative fiscal officers," Mr. Perez said.
In Texas, at least, that means the demands will compete.
"It's going to be difficult to wade through this and find the right balance," said Rep. Vilma Luna, D-Corpus Christi and vice chairwoman of the House budget panel. "There are a lot of competing interests."
WISH LIST
Bipartisan support is building to undo cuts approved by the Legislature two years ago as it bridged a $10 billion budget shortfall without raising taxes. Though it's unclear yet how much money will be available for such items, here's a look at the ones most popular with lawmakers, along with their two-year cost to the state:
Restore vision, dental benefits in the Children's Health Insurance Program: $47 million
Replace out-of-date textbooks: $723 million
Reinstate $1,000 health insurance bonus for school employees: $650 million
Undo cuts to child-abuse and delinquency prevention programs: $19 million
Reinstate previous Medicaid fees for doctors, hospitals and nursing homes: $260 million
Cut wait times of mentally retarded, disabled, frail elderly for in-home care: $305 million
Total: $2 billion
SOURCE: Dallas Morning News research