Why They Won’t Use the Rainy Day Fund

So you’d think that with public education being under funded for by $4 billion, under funded for the first time in the state’s history, you’d think legislators wouldn’t allow that to happen and you’d think they would plug the budget hole with the Rainy Day Fund – something that the fund’s very existence was meant for.

You’d think that as the state sees thousands of teachers being laid off, schools closed and schoolchildren compressed into classrooms, you’d think they would have freed up funds from the Rainy Day Fund.

You’d think.

But they didn’t. And when Donna Howard’s amendment to use anything above the remaining $6 billion crashed and burned at the end of last week because legislators simply will not budge on using any more of the fund for anything, you have to start wondering what is going on here.

Well the answer appears to be that they won’t release any more of the Rainy Day Fund because those funds are actually already spoken for, but no one is willing to confess that.

In order to balance the 2012-2013 budget, you see, the legislature had to under fund what the state is obligated to pay into Medicaid by $4.8 billion. Now this isn’t the same as under funding education. They actually can’t do that to Medicaid. What is hoped is that the feds will change the law by the time the Medicaid bill comes due and the state’s obligation will be less.

But if the law remains unchanged…well then there’s the Rainy Day Fund to bail the state out.

So there you have it. It makes perfect sense to me now why the state is doing this to public education: the cupboard is bare even though everyone says it isn’t.

The cupboard is bare because the legislature kicked the can down the road hoping that the feds won’t kick it back at them.

Texas to Opt Out of Medicaid?

The very notion of opting out of one of the largest government health services program seems crazy on the face of it. No way, I would have said before November 2nd. But now that we know the count, and what the numbers are in state house and senate, it seems this, too, is possible.

Texas could opt out of Medicaid.

In so-doing, Texas would be turning up its nose at $16.6 billion in federal dollars.

Rick Perry thinks it’s a fabulous idea.

So does State Rep Warren Chisum (R - Wackoville) who has said this:

“Too much of taking money with strings attached is just not good for the people.”

This has precedence. Last year Rick Perry passed on collecting $555 million in federal dollars to help pay unemployment to thousands of out of work Texans because the funds came with strings attached. So turning down sixteen billion dollars in federal money with strings attached seems not so big a reach.

Chisum said that his good ol’ buddy John Zerwas agrees with him and actually got some legislation passed last year to study the idea. Zerwas, who is a gas passer (an anesthesiologist) is probably the last one in the capitol building who wants to see Medicaid go bye-bye. My guess is that he wanted the study to get done so that these yayhoos could see what a truly bad idea the whole notion is.

That’s my guess, anyway. This is what he actually said:

“Zerwas said that looking seriously at opting out would be ‘a good exercise for us to go through’ but that it wasn't his study that put the idea on the table. ‘Opting out really comes from national and statewide think tanks’ such as the Heritage Foundation and the Texas Public Policy Foundation, he said.”

And Zerwas knows that opting out would be a disaster for the medical services industry in Texas, and not just for those who receive Medicaid benefits.

Because if you think the medical industry will just shrug its shoulders at the loss $16 billion and bring their collective belts in another notch or two, you have truly been drinking the kool-aid.