Saturday, April 24, 2010
By Dave Montgomery
Fort Worth Star-Telegram
State budget cuts causing anxiety as agencies prepare to trim services
AUSTIN -- As the belt tightens around state government in anticipation of a severe budget shortfall, many officials are already trying to trim spending by 5 percent with measures that range from buying energy-efficient light bulbs to scrapping trips and putting a hold on hires.
Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus, who ordered the reductions in January, have been reviewing agency plans for budget cuts and are expected to announce their decisions in early May.
A number of agencies and departments have asked for exemptions from some of the more painful cuts to avoid what they say could be a debilitating blow to public services.
But others, perhaps recognizing the inevitable, have already begun moving forward with their cuts, directing the savings into "lock boxes," accounts being set up in the comptroller's office. Fifteen had been established by late last week, comptroller's office spokesman R.J. DeSilva said.
The reductions have spread anxiety among the more than 150,000 state employees. Andy Homer, director of government relations for the Texas Public Employees Association, said the downsizing and hiring freezes could affect thousands of employees, many of whom remember the 2003 budget crunch, which cut about 10,000 employees.
"Like people everywhere, the threat of job cuts is always worrisome," Homer said.
Many of the budget cuts emulate those in households and businesses: delays in planned acquisitions and purchases of only essential items, for example. Scores of agencies have put a hold on hiring and are allowing positions to evaporate through attrition, though some say it may be difficult to avoid layoffs.
"We approached it like a family would," said Stephanie Goodman of the Health and Human Services Commission, the umbrella department for a network of five social service agencies whose 54,000 employees constitute a third of the state work force.
Seeking exemptions
Like many other agencies, the commission's cost-cutting blueprint reaches across the pain spectrum, from cuts that the agency can live with to those that it hopes to avoid.
One of the most severe calls for a 1 percent decrease in Medicaid rates paid to doctors, nurses, hospitals and other providers. That would save nearly $100 million in state revenue but would also result in the loss of $176 million in federal funds that help finance the federal-state low-income healthcare program. Cuts in benefits were placed off-limits in the January order.
Another Health and Human Services proposal being reviewed by the leadership would eliminate 200 beds at four state hospitals that care for the mentally disabled. Goodman describes that proposal as "probably the most painful" in a list of measures that also includes hiring freezes and administrative savings.
At the University of Texas at Arlington, planners are responding to the call to downsize while moving ahead on their ambitious, long-term goal to make UTA into a prestigious Tier One university.
"I think people understand that the state is facing significantly less revenue, and we understand that it is going to be a very frugal environment going forward," said Kristin Sullivan, UTA's assistant vice president for media relations, adding that the university is already cutting costs.
UTA has extended a voluntary separation offer to 247 employees who have either worked 20 years at the university or whose age and combined state service total 80 years. Those affected have until June 15 to decide.
Also, Sullivan said, officials are scrutinizing things like travel, contracting and purchases and are filling only positions deemed crucial to the core mission. Officials are also responding to unprecedented growth that has pushed enrollment to a record 28,826.
Huge potential shortfall
The state leadership's January directive stems from predictions that lawmakers could face a shortfall of $11 billion to $20 billion when they write a two-year state budget in the legislative session that starts in January.
The order, which was sent to state agencies, appellate courts, state universities, health-related institutions and legislative leaders, applies to spending appropriated for the current 2010-11 fiscal biennium, which began Sept. 1.
But state officials are also braced for the possibility of more reduction orders in the summer when the leadership asks agencies to submit their spending strategies for the 2012-13 biennium, which will start Sept. 1, 2011. Many officials fear that the base line for legislative appropriation requests will reflect a 5 percent reduction from current appropriations, meaning that their starting point will be lower than originally anticipated.
In issuing their directive, Perry, Dewhurst and Straus said a reduction of state services should be a "last option" and told officials to scrutinize administrative expenses and purchases. They also declared off-limits any cuts in benefits or client eligibility levels in Medicaid, CHIP and foster care.
They also banned any cuts to staff members who determine client eligibility in social programs such as food stamps. Also off the table are the Foundation School Program, Social Security contributions, contributions to teacher and public employee retirement systems, contributions to the Higher Education Fund and debt service.
Dewhurst, presiding officer of the state Senate, told the Star-Telegram last week that the three leaders and their staff are going through the proposals "very, very carefully."
The overall goal, he said, is to achieve reductions while avoiding "cutting into the muscle" of state government. "We're determined to protect all essential services," he said.
Prison system concerns
High on the list of agencies seeking exemptions is the Department of Criminal Justice, which runs the prison system.
The department has identified $294.3 million in cuts but has asked to be spared from $243.9 million worth of reductions that prison officials say could endanger public safety and security. The requested exemptions include a reduction of more than 3,100 employees, such as correctional officers and probation officers, and cutbacks in vocational training and treatment services.
The Association of Community Colleges, representing the state's community colleges, including the five-campus Tarrant County College, has asked that the schools be spared because of their importance in educating and re-educating Texans, many of whom lost their jobs and careers in the economic downturn. Double-digit growth in enrollment underscores the need to protect the campuses, said Steve Johnson, the group's associate vice president.
"We're essential to the state right now," Johnson said. "Given the amount of growth we've seen, an exemption makes sense."
But other state officials say they expect to put their reduction plans into effect. Under a directive from the Legislative Budget Board, agencies have until August to establish their lock box accounts for savings from the current 2010 fiscal year.
The Texas Education Agency has targeted $1 million in a steroid testing program for student athletes and is adjusting funding for workbooks and kindergarten materials. But agency officials said many of their reductions are aimed at internal operations.
"We would rather make hard decisions inside the agency rather than force school districts to make the hard decisions," said Adam Jones, the agency's chief operating officer. "That's the balance we're seeking."
The 8,100-employee Department of Public Safety is putting a hold on buying 41 new vehicles and is cutting overtime funding to border-area law enforcement officials as part of its $13 million reduction.
"We continue to watch our expenditures and figure out less expensive ways to do things," DPS spokeswoman Tela Mange said. But "we're still out there catching bad guys and protecting the state of Texas."