via Grits for Breakfast by Gritsforbreakfast on 12/20/09
Lt. Gov. David Dewhurst says Texas state agencies must reduce their budgets by 2.5% in each of the next four years to account for declining tax revenues, Jason Embry at the Austin Statesman reports ("Legislative leaders eye spending cuts to deal with looming budget hole," Dec. 20), providing an excellent short summary of the underlying source of the state's budget woes:
As compared with a year earlier, sales tax collections were down 14.4 percent in November, and those kinds of returns have hastened budget-cutting talk. But what's really driving the conversation is a decision that lawmakers made in wealthier times to put property tax cuts at the top of the state's permanent priority list.In 2006, facing an order from the Texas Supreme Court, lawmakers passed a one-third reduction in school property taxes for operations, committing the state to spend $7.1 billion every year to hold those taxes down. But the tax increases that lawmakers passed at the same time to replace that money — most notably a revamped business tax — produce less than $3 billion per year.So every two years, the state has to pull more than $8 billion away from other priorities, such as public schools, universities or prisons, to pay the rest of the cost of property tax cuts. Doing so wasn't too difficult when the state had surpluses, but now that they're gone, the property tax cuts threaten to eat up any revenue growth the state sees, even though many homeowners never saw much of a decrease in their tax bills.To meet the state's commitment to hold down property taxes, to pay for an increasing number of people enrolling in public schools and colleges and joining Medicaid rolls and to replace the stimulus dollars used to pay for the current budget, lawmakers in 2011 might have to come up with $15 billion or more to balance the budget, which now totals $182 billion over two years.That's a daunting number, but Dewhurst said he is convinced the state can close that gap without severe cuts in state services.
At the Texas Department of Criminal Justice, a 2.5% cut would amount to more than $125 million over the biennium. In years past, TDCJ's institutional division (which runs the state's 112 prison units) has been shielded from budget cuts, meaning that in 2003, when agencies were last cut to the bone, the only thing available to slash were treatment dollars.
I hope Texas officials won't make the same mistake in 2011. Instead, by investing more in diversion strategies and expanding on successes from the 2007 probation reforms, the state could actually close one or two prison units - as we've seen in other states - and use those employees to bring other facilities up to adequate staffing.
There are two ways to think about which prison units to cut: "Which units are most expensive?," and "Which units are most difficult to staff?"
If you're talking about the most expensive units, those are mostly TDCJ's older facilities which tend to have higher costs-per-prisoner. (See this post analyzing data on TDCJ unit age and cost.)
If you're talking about those where understaffing is chronic, you'd start in Dalhart, where TDCJ wages and working conditions don't favorably compete with factory farming of hogs or a nascent dairy and cheese-making industry that's cropped up there in the last decade.
There could also be political considerations. The local chamber-of-commerce crowd in Fort Bend County outside of Houston want a prison unit closed because it sits on land that has become increasingly valuable as the city of Sugarland has expanded and an airport was placed near the area. During the Sunset process last year, they were turned down when they suggested TDCJ close the unit and build a new one somewhere else. Perhaps they'd have more success during a budget crunch arguing the unit there should be eliminated outright.
In any event, to avoid massive new prison building in the future it's important that the state not limit budget cuts at TDCJ to probation, treatment and diversion programming, but instead "spread the pain" or even limit it to the institutional division, where they're still short 1,000 guards and could close units without necessarily eliminating jobs.
Now's the time to be thinking about alternative budget solutions because when the Lege session starts a year from now, demands for slashing 9-figure amounts from the budget could be quite immediate.