A New Budget Shell Game

Dewhurst (l) and Straus: Two of the big three making five out of one (Photo by Richard Whittaker)

Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus released a letter on Friday asking state agencies to submit plans to cut five percent from their biennial budget, approved back in June. It's so urgent that they must make their proposals by Feb. 15. Sounds like a scary shortfall, right? Actually, it's really for one percent.

In the letter, Perry et al. blame the "uncertainty of the state's short term economic future" for the cut (and, of course, get in a swipe at "potentially substantial long-term costs associated with the passage of federal legislation.") No mention of the structural deficit of Perry and Dewhurst's budget creation – the one that Straus has formed a select committee to examine (read The Four Horsemen of the Deficit for more on that).

Five percent sounds like a lot, but hang on. It's not the whole budget, just what's paid for by general revenue and gen rev-dedicated appropriations. On top of that, the request exempts a few items, including benefits and eligibility staffing levels for the Children's Health Insurance Program, Medicaid and foster care, plus total exemptions for the Foundation School Program, debt service, and contributions to Social Security, the Teacher and Employees Retirement Programs and the Higher Education Fund. So, most of the budget.

If the entire biennial budget of $182.3 billion was on the table, the agencies would be looking to slice $9.1 billion out of expenditure. However, take out all the exempted and ring-fenced projects, and the total saving over the biennium is closer to $1.6 billion – less than one percent.

Of course, the question now is whether any of the big three – all of whom are up for re-election this year – will claim that they saved tax payers from covering a five percent deficit while also protecting Medicaid.