The Texas budget has some huge holes that will be tough to plug. Image: Flickr / calsidyrose / CC-BY
In accordance with Texas law, the Texas legislature will consider a proposed budget for the 2012-2013 year. The budget contains severe cuts across the board. The budget comes close to making up a $15 billion shortfall, but may not go far enough.
The Texas budget shortfall
This year, the Texas legislature will have to find places to cut $15 billion. Some economists estimate that the “true” shortfall of the Texas budget could be up to $27 billion, once increasing costs of Medicare and school enrollment are taken into account. The Texas constitution dictates that the budget must be balanced, which means that the budget shortfall has to be made up with a combination of cuts and new income.
The new cuts on the Texas budget
Many of the cuts proposed in the current Texas budget are the equivalent of short term loans. The amount of money Texas will pay to Medicare providers will be reduced by 10 percent or more; health insurance for children will also be cut. Over the long term, this will reduce the number of medical providers willing to take Medicare. The budget proposal also cuts four community colleges, as well as all financial aid for new students. The Department of Criminal Justice, including prisons, would also be cut by 14 percent. State contributions to the employee retirement fund would be reduced to the point the fund could not maintain itself. About 9,600 state jobs would be eliminated in the budget, as well.
New fees in the Texas 2012-2013 budget
In addition to cutting billions of dollars out of education, health care, and retirement, the Texas budget also looks for emergency money in new fees. Tobacco users on state health insurance will be required to pay $30 a month. The state will also start charging a “monthly child support processing fee,” and “annual child support service fee” to those who are paying child support. An electronic filing-of-documents fee is expected to generate about $1 billion in revenue as well.
