Texas GOP Demands Tax Break on Yatchs, Huge Cuts to Schools, Medicaid and Nursing Homes

Texas faces a $15 BILLION to $27 BILLION state budget deficit this year.

Texas ranks anywhere from 36th to 44th in the nation on spending per year for K-12 pupils (depending on the methodology used) and yet its Republican proposed budget plans to cut spending on public education (including charter schools which are a favorite of Conservatives) by form $5 BILLION (State Senate) to $10 BILLION (State House of Representatives) this year. Higher education will be cut by another $2 BILLION. Some of the best Public schools in Texas will bear the largest cuts:


Dallas ISD is a portrait of inner-city districts across the country. It is overwhelmingly minority — 67 percent of its students are Hispanic; 26 percent are black. It is overwhelmingly poor — 86 percent of its students qualify for free and reduced meal plans. And it serves some of the most difficult-to-reach children — the state considers 65 percent of its students at risk for dropping out.

But its magnets are regarded as the nation’s best public high schools. Townview’s Talented and Gifted and Science and Engineering high schools have consistently ranked in Newsweek’s top five public schools in the country since 2006. The Talented and Gifted school has been first every year except one since then. All of the Townview schools are rated as “exemplary” by the Texas Education Agency — something achieved by only 10 percent of public high schools in the state. Alumni of the Booker T. Washington High School for the Performing and Visual Arts, an exemplary-rated magnet not on the Townview campus, include Erykah Badu, Edie Brickell and Norah Jones.

Despite its renown, in Dallas ISD’s most recent budget projections, Townview stands to lose 27 percent of its full-time teachers. Booker T. Washington faces a 25 percent reduction. By contrast, the district’s comprehensive high schools are losing an average of 12 percent. On Tuesday, Michael Hinojosa, the district’s superintendent, announced that in addition to the teacher cuts, Townview would also lose five of its seven principals to reduce administrative overheard.

Other proposed spending cuts include funds for Medicaid and nursing homes.

Should the Senate fail to amend House Bill 1, the general appropriations bill for the next biennium, Medicaid reimbursement rates for all providers in Texas would be reduced by 10 percent. Nursing homes would be hit even harder. The industry has crunched the numbers, and state officials confirm they could be short the amount they would need to fully cover provider rates by a total of 33 percent, or $1.2 billion. That discrepancy is caused by three major factors: less general revenue, anticipated case load growth and fewer matching dollars from the federal government.

Nursing home advocates say the shortfall could lead to the closing of nearly half the state’s 1,100 nursing facilities and the layoffs of nearly 60,000 workers, resulting in the removal of nearly 46,000 residents.

The Lt. Governor and some Senators proposed using $3 BILLION from the Texas $9 BILLION Rainy Day Fund (essentially a reserve to be tapped in tough economic times) to restore funding cuts to education by the Texas House. Naturally, he met opposition from Governor Rick Perry and the House Republicans who want a full bore austerity budget.

The call for using Rainy Day Fund - pardon, Economic Stabilization Fund - money in the next two fiscal years is a sticky point, not only among budget writers in the House and the Senate but between the Senate and Perry.

House Appropriations Committee Chairman Jim Pitts, R-Waxahachie, has said there are not enough votes in the lower chamber to approve withdrawing additional money.

Perry has said that he would not sign a state budget bill that includes fund money.

Meanwhile, one of the Republican House Representatives sponsored a bill to limit sales taxes on yachts costing more than $250,000 because it was of critical importance to the Texas economy:


A tax break for those who want to buy yachts costing $250,000 or more will be considered by the Texas House of Representatives after Republican state lawmakers passed the legislation in the House Ways and Means Committee on Thursday.

The measure, HB 2187, would cap the maximum sales tax the state could collect on the sale of a yacht. It was passed by an 8 to 3 vote along party lines, with Republicans supporting the measure.

I feel so sorry for Texas Yacht owners, don't you? How they must be suffering. To get the same benefit they would have to go buy their yachts in Florida (which already has such a sales tax break in effect), and that would surely inconvenience them mightily.wild guess.


"This budget must live within the available revenue. It must not rely on the use of the Rainy Day Fund. It must not rely on new tax revenue."

That quote comes from House Appropriations Committee Chairman Jim Pitts, a Republican when he first proposed these draconian budget cuts in the House. That's right, there can be no new taxes to close the deficit. That subject is taboo among Texas Republicans.

Yet five years ago in 2006, when Texas's Legislature passed massive tax cuts, Comptroller Carole Keeton Strayhorn warned that those tax cuts would result in a monster budget deficit for Texas.


AUSTIN — Comptroller Carole Keeton Strayhorn didn't win friends five years ago when she warned Gov. Rick Perry and state lawmakers they were writing the “largest hot check in Texas history” during a tax overhaul that resulted in lower property taxes and a revised business tax. Strayhorn told them their plan would fall about $23 billion short over a five-year period. Five years later, state leaders are staring at an estimated budget shortfall of nearly $27 billion.

The nation's economic collapse three years ago contributed to some of the state's revenue troubles, but the biggest problem is that the new business tax did not generate enough money to pay for the school property tax cut, Strayhorn said Friday.

“I absolutely knew I was telling them straight up as best as I knew,” the former comptroller said. “I knew it would be awhile before you would see the results.”

At the time, Perry rejected Strayhorn's warning — saying she underestimated the tax reform and ignored economic growth from property tax cuts.

Gee, reminds me of another bunch of tax cuts that proved primarily responsible for the massive federal government deficit also passed by a GOP Congress and signed into lawn by a former Texas Governor who won election as president with a minority of the popular vote and the help of Five justices on the Supreme Court. Guy name of Bush, George W.:


Polls show a large majority of Americans blame wasteful or unnecessary federal programs for the budget problems. But routine increases in defense and domestic spending account for only about 15 percent of the financial deterioration, according to a new analysis of CBO data.

The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and tax bills enacted under former President George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That's nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now are at their lowest level as a percentage of the economy in 60 years. [...]

Obama's 2009 economic stimulus, a favorite target of Republicans who blame Democrats for the mounting debt, has added $719 billion — 6 percent of the total shift, according to the new analysis of CBO data by the nonprofit Pew Fiscal Analysis Initiative. All told, Obama-era choices account for about $1.7 trillion in new debt, according to a separate Washington Post analysis of CBO data over the past decade. Bush-era policies, meanwhile, account for more than $7 trillionand are a major contributor to the trillion-dollar annual budget deficits that are dominating the political debate.

Funny how those Republican tax cuts never seem to deliver their promised economic utopia. Yet here the Republicans are in 2011, in Texas and on the National level, despite all the evidence, insisting that increasing tax revenues would be folly and that the only way to save our economy is by cutting essential services that the poor and middle class rely upon. Meanwhile if you can afford to buy a yacht, Republicans want to help you save money on the sales taxes you would otherwise have to pay. Well, at least we now know the meaning of the term "compassionate conservatism."

Booman Tribune / By Steven D. | Sourced from

Posted at May 3, 2011, 12:10pm

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