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.

Senate Votes Overwhelmingly for Use of Rainy Day Fund

I read about it this afternoon in The Chron. The State Senate of Texas voted 30 For and 1 Against using $4 billion from the Rainy Day Fund to close the funding gap that exists between what is needed to “make suitable provision for the support and maintenance of an efficient system of public free schools”– a constitutional mandate – and what they are actually going to authorize.

So an $8 billion funding gap becomes a $4 billion funding gap if only the Senate can get the House to agree.

Something I highly doubt will happen. And why is that? Well the Senate, aside from Senator Dan Patrick, is devoid of Tea Party Republicans. The Senate still has that overwhelming Republican majority, but aside from Patrick, none of them ascribe to Tea Party principles.

The House doesn’t have that. In the House, Teabaggers proliferate. Teabaggers want something for nothing. Or worse, they want to privatize public education. That way they can cut their taxes even more.

Even though it is constitutionally mandated that the state provide a public education.

Well we already know that, since they are already not funding public education adequately, that part of the Texas Constitution, Article 7 Section 1, is like the English monarchy, mainly symbolic and ceremonial.

It’s like the Framers wanted to say that they are for education because “A general diffusion of knowledge being essential to the preservation of the liberties and rights of the people” but actually paying for it, really going all the way and fully funding education, well gee, not really.

Actually, the Framers were only kidding.

The Force Is Strong With This One

My friend Dave pointed out something to me yesterday and I immediately saw the need to put up a blog post about it. Then Blogger decided to take the day off and I couldn’t do the post.

           

It’s still a good idea though and although not as timely as it would have been yesterday, I still want to do the post so here goes.

Remember back a little over 3 weeks ago when Governor Rick Perry issued a proclamation that over the Easter weekend that Texans of all faiths should pray to the deity of their choice for Him, Her or It to bring rain to the dry Texas plains?

His reasoning, I guess, was that if all of the various deities receive enough prayers they will pool their resources and get the thing done. I threw in my two cents with my prayer to the Flying Spaghetti Monster.

And how much rain did we get?

Bupkis. Nada.

And then who should come to Texas for a few short hours in Air Force One, flying right over the drought-stricken area – twice – this past Tuesday but President Barack Obama.

And what happened a mere 36 hours later?

This.

Say what you want about him, The Force is strong with this one.

Perry: Rainy Day Fund is For Rain (Literally)

In citing his concern today that the Senate Finance Committee included another $3 billion from the Rainy Day Fund to offset some under funded but constitutionally mandated state funding of education and healthcare, Rick Perry, a supposed constitutional expert, in his own mind anyway, said it would be unwise to use money for a "short term need" at a time when "nobody knows what the future is going to be." A future, he intimates, that could include a Category 5 Hurricane hitting Corpus Christi or Houston. That could bankrupt the state he says.

Maybe.

But constitutionally, the Rainy Day Fund can’t be used to handle rainy days. Constitutionally, the Rainy Day Fund can only be used to pay for recurring expenses during bad times. During times when not enough revenue has been raised in order to pay for essential state services.

Here is what it says in the Texas Constitution:

“The constitutional amendment establishing an economic stabilization fund in the state treasury to be used to offset unforeseen shortfalls in revenue.”

The only problem with this is that some would say that there were no unforeseen shortfalls in revenue. When the revenue structure was established 6 years ago there already were predictions of twenty plus billion dollar shortfalls even back then.

So a shortfall that was entirely intentional, theoretically, cannot qualify to make draws on the Rainy Day Fund.

But no one is admitting to that, are they?

So it’s back to the original premise. Rick Perry is blowing smoke out of the place from which monkeys also fly. The Rainy Day Fund was never meant to take care of disasters; it was intended to take care of budget shortfalls. Like the one that will occur in 2 year’s time.

The Senate Finance Committee is entirely correct to draw another $3 billion from the fund.

They can and should do that. It is actually constitutionally mandated that this be done.

And then they can go back and write in a draw on the Permanent School Fund and wipe out the entire shortfall.

Saving the lives of Texans, and saving the public education system that will otherwise regress to what we had in the Dark Ages, in a feudal society, where only the rich went to school.

Partial Victory: The Rainy Day Fund Will Be Tapped

In a move that is sure to anger his Tea Party base (the only group of Texans who would still vote for him if last year’s mid-term election was repeated) Rick Perry finally relented and agreed to sign a budget bill that included a draw from the Economic Stabilization Fund aka the Rainy Day fund.

I call that a partial victory because while it will surely knock down the hits to public education we are all expecting to come next year, the amount that Perry will OK is only $3.1 billion - or $3.2 billion depending on which source you want to believe.

Heck, what’s a hundred million dollars here and there?

But I see this as a partial victory because the shortfall this next year is $4.3 billion.

This leaves untouched over $6 billion, and Perry pledges not to sign a 2012-2013 budget that has another draw on the fund. Which is probably a moot point because a full 2/3 vote in the house would be needed to get funds for that budget year. Tea Party caucus votes are going to make the 60% vote needed to release the funds this year close, but probably doable. But 66%? That’s 100 Yea votes. That’s probably not doable.

But here’s the thing: Perry stood up to the Feds last year and said that he was constitutionally unable to make any educational budgeting guarantees to the Department of Education, and that means that Texas will not receive a total of $830 million in federal education grants that other states received.

He got a lot of yippees from the yahoos in his party when he announced that, but now it is easy to see that those funds could have nearly made up for the $1.2 billion gap between what is needed to close the gap and what we are going to fill it with.

It is the governor’s own fault that we are in the mess we are in right now. Everyone knows it. But now it seems that if Perry moves to correct the situation in a proper fashion that is tantamount to admitting to the past mistakes and errors in taxing policies.

And Perry wouldn’t want to do that.

The Ides of March

Shakespeare used a little poetic license in his play Julius Caesar when Caesar was warned by a soothsayer to “Beware the Ides of March” In Act I Scene 2. But these days the warning seems appropriate.

The soothsayer was warning Caesar that he would be killed on March 15^th. A bad day to be emperor of Rome.

So too is it a bad day to be teacher in Texas. Or anywhere else for that matter.

Because here in Texas we get to see the whole process unfold and the numbers posted that tells everyone the same thing. Unless something isn’t done about it, cuts to education are coming, and coming big time.

The Center for Public Policy Priorities has several spreadsheets on its website, found here. The one I looked at is the Public Education spreadsheet showing revised figures from HB 2485 county-by-county, along with total job losses, not just in education but from education job losses and the ripple effect that it would have in the private sector.

Statewide, total job losses could be as high as 289,532.

But if you scroll all the way to the bottom you see a link to State Rep Scott Hochberg’s District-by-District breakdown.  The news there is even more unsettling. On average, according to his figures, school districts will stand to lose over 17% of the funding they normally would receive from the state. Some districts are lower, some are higher.

But here’s the thing. All of this could just go away if there is a vote to open up the Rainy Day Fund to get the budget balanced. School districts could get some much-needed good news ahead of hearing what their budgets will actually look like, and in time to make staffing level decisions that they will have to make, by law, in mid April.

So when Appropriations Chair Jim Pitts scheduled a committee vote on tapping the Rainy Day Fund, he was hoping to get an approving nod from Rick Perry, something that they had already heard they would get – privately, that is.

But what did they hear from the governor’s office? Crickets. Not no, not yes, not anything at all.

From the Austin American-Statesman:

“So the expected early morning vote was delayed, and Pitts extended an invitation Monday for someone from Perry's office to testify at the rescheduled afternoon hearing. But no one showed. Nor did they respond to the phone calls or text messages from Pitts and his aides as the committee awaited the arrival of Perry's representatives.”

Would it not be tragic that public education as we know it in Texas can be saved with the Rainy Day Fund, but news of the release of money from this fund is delayed past the deadline that school districts must honor?

Perry is very much like a child playing with his toys unaware or uncaring that there is a coming storm that he can prevent if only he puts his Tonka truck down and picks up the phone.

Teabaggers Agonize While Perry Fiddles

I couldn’t help but notice that the Austin American-Statesmen has two nearly back-to-back articles on the Rainy Day Fund today. This one describes how Tea Party Caucus conservative Republicans are coming face-to-face with reality as they begin to realize what cutting expenses will actually do to the education of Texas’ children.

The real costs of failing to educate the next generation are finally coming home to roost.

Contrast that with Governor Perry’s latest move to derail the growing movement to bring about the release of the Rainy Day Fund in order to help balance the budget, by zeroing out the deficits in the allocations to education. It is positively comical how Rick Perry blithely ignores what his Tea Party colleagues are being hit in the face with.

From the Austin American-Statesman:

“[Former Humble ISD school board president Dan] ]Huberty is one of 11 freshman Republicans who won seats in the House and then joined the Tea Party Caucus, a group of legislators pledged to control government spending and fight off tax increases. And though they remain opposed to tax hikes, the new lawmakers — like many of their veteran colleagues — have seen in recent weeks the difficulty of closing a budget gap with spending cuts alone.”

“The state is billions of dollars short of what it needs to continue current programs. To avoid tax increases, House and Senate leaders proposed budgets in January that would slash spending on public education and health care — cuts that would affect classrooms, nursing homes and colleges in just about every lawmaker's hometown.”

“‘I think there were a lot of deer-in-the-headlight looks when the budget was laid out,’ Huberty said.’”

That last bit says it all. There was obviously a lot of rhetoric but not a lot of hard facts about the decisions that will have to be made if the Rainy Day Fund remains locked up while Noah’s Flood descends on Texas. At least they are now starting to pay attention.

Not so Rick “Gaius Julius Nero” Perry, who fully intends to play his fiddle as the water rises.

“Gov. Rick Perry met with the House Republican Caucus for almost an hour Monday in an effort to slow the Legislature’s movement toward drawing money out of the state’s rainy day fund to close a budget gap”

If you read further on, it seems that Perry has altered his stance somewhat, and simply wants the Rainy Day Fund to be used “as a last resort.”

You know, like when the fund was used in 2003 to close the budget gap that existed back then.

A $10 billion budget deficit.

As a result of that deficit, $1.3 billion was released from the Rainy Day Fund in 2003 to help balance the books. And since that time, with the price of oil and gas soaring, the Rainy Day Fund has increased by over 400%. Now it might just be me, but if a $10 billion shortfall in 2003 caused the release of $ 1.3 billion from a much, much smaller Rainy Day Fund, I get the overall impression that the scale by which we base judging an act “of last resort” has already been reached.

And surpassed.

Susan Combs Checks Out the Weather: Rain is Coming

In her testimony yesterday at a House Appropriations Committee meeting, State Comptroller Susan Combs made no bones about the fact that the “Rainy Day Fund” would have to be tapped  to help balance next year’s budget. The “Rainy Day Fund,” a fund set aside since 1988, the one funded by taxes paid by oil companies, is a fund to be used during times of economic hardship so that education in Texas would not suffer as a result of a bad economy.

A thoroughly and unbelievably far-sighted idea, I think. Must’ve been a Democrat who thought of it.

Anyway, in her testimony, Combs stated what has become obvious to everyone but Governor Perry, Lt. Governor Dewhurst and House Speaker Straus, to wit (from the Austin American-Statesman):

“I don't know how you get to $4.3 (billion) with cuts. I really don't know how you do it.”

Combs was saying the obvious. Cuts have already been made in this fiscal year, and still it appears that there will be a shortfall. If you want to balance the budget with cuts you are going to have to make some draconian decisions. Decisions much like the ones I have been reading about in FortBendNow where a local Fort Bend County school board considers a world where there are 1,000 fewer teachers to teach Fort Bend ISD’s growing student population.

State Rep Jim Pitts, Chairman of the Appropriations Committee, has already made the move to take $4.3 billion from the fund for next year by filing a bill to do just that. He will need 60% approval to get that done, a dicey thing as I mentioned before because Tea Party Republicans have been told not to touch the Rainy Day Fund.

But as I continued to read the American-Statesman article I stumbled over this brain fart:

“Answering the criticism that it is premature to consider using the rainy day fund, Pitts said he wanted to move on this decision now so the committee members and the full House could have a say on how to distribute that found money, rather than leaving it to the appointed conference committee members who will negotiate details of the final budget.”

Huh? What? You mean to say we are going to leave it to the legislature to decide “how to distribute” 4.3 billion dollars? Are you kidding?

Jim Pitts, you distribute it the way that the law says you do it: you spend it on public schools so they can buy textbooks and have enough educators on the payroll to get the job done.

Decide? What’s to decide?

The Chron Says Let’s Use the Rainy Day Fund

The Houston Chronicle has, it seems, put into words what is on the minds of many of us: if there is such a shortfall in the state budget that the state’s health and education expenditures for the next two years are destined for a chopping block – a chopping block with an attitude – isn’t it now time to state the obvious?

It’s raining.

Since the '80's Texas has maintained a "Rainy Day Fund," now estimated at $9 billion, to be used in the event that there is some sort of economic crisis - a rainy day.

When you put money away for a rainy day, someone at some point someone has to take a look outside and see if it’s raining.

By all accounting what is needed is a $12 billion increase in funding to take care of all the expected increases in needs across the state. More children will enroll in public schools than ever before over the next two years. More people will get sick as the baby boomer generation gets older and older. But instead of increase, state budget projections are for a $15 billion (optimistically) to a $25 billion deficit.

And with health and human services and education taking up more than half of all state expenditures it seems to many that we are about to do great harm to the youngest of us and the oldest.

And with a 2/3s majority in the State House, it seems that budget cutting will be the watchword of the day, and not raising revenue.

Ironic then, that in a new poll by the Austin American-Statesman a majority of Texans want the legislature to spare the axe in the areas of health and education.

From the AA-S:

“Some 70 percent of respondents said lawmakers should not cut school spending, and 61 percent said they want no spending cuts on health care programs for children and low- to moderate-income families.”

Elections have consequences. Voters turned out in droves last November to de-select an agenda that would have been more attuned to follow just those sentiments and find areas other than the future of the state to make budget cuts.

So really, it makes no sense to maintain a rainy day fund when the state legislature is poised to dismantle its future and weaken the state to the point of bankrupting our future.

It’s raining.