Monday, March 21, 2011

Legislative pro explains “moving parts” of budget crunch

Belton – Have you heard the one about the school district in Houston that added chess to the curriculum?

That's right. Chess.

They were going to send teachers on a Carnival Cruise to Cozumel to learn the game in a congenial atmosphere, but had to cancel the trip.

True story.

Why? Because of the deficit school districts and the Legislature are facing in the current budgetary process.

What happened? A funny thing happened when House Speaker Joe Straus and Lt. Governor David Dewhurst instructed their numbers crunchers to write a budget that could be done solely with existing funds.

The result? A state budget that appears to be billions of dollars in deficit, but really isn't.

It's all in how you interpret the numbers, and William Lutz, managing editor of “The Lone Star Report,” has made quite a study of that. You can read about the $9 billion in proposed budget cuts in .pdf format at

Don't believe it? Just listen to him rattle off the facts before you make up your mind.

Where is the education system's budget crisis? For starters, “I would think they have chess boards at the five and dimes in Houston.”


The problem is not in the revenue stream, he told members of the Bell County Republican Party Executive Committee meeting last night.

Sales taxes make up about 60% of the projected revenue, and it's just about the same as it was the last time the Legislature passed a budget.

Mr. Lutz blames the economic stimulus money the Obama Administration sent down Texas way - $5 billion worth – which the Legislature spent like water.

What with the fact that for every 100 teaching positions in the state, you have 64 non-teaching positions, “What you wind up with is a pretty nasty budget situation.”
If you cut the ratio of teaching positions to non-teaching positions by 10%, you would save $1.7 billion. If you cut it by 20%, you would save twice as much.

By the way, what is the Rainy Day Fund? That's simple enough, he told his listeners.

Back in 1986, oil revenues tanked and left the state in a bind. The Legislature created the fund as a cushion against any such disaster in the future. It takes a super majority to spend the money. Three-fifths on both houses have to vote to unlock the coffers.

You don't listen to William Lutz for long before you realize what
you're hearing is the smart money talking about the inside track on the current legislative session in Austin. This guy is good.

He has a sheepskin from University of Texas and another from the University of Washington, specializes in global trade, transportation, and logistics studies

Wait, there's more.

As Managing editor of “The Lone Star Report” and a frequent guest on WFAA's “Inside Texas Politics,” he's covered numerous legislative sessions and knows his way around the budgeting process.

When it comes to this session, “There's really only one issue; there's the budget, then there's everything else.”

The truth is simple enough, from where he stands. In numerous sessions of the Legislature, he has never seen the wrecking crew walk away from the pink granite without increasing the spending per-pupil significantly.

In any case, the school districts will wind up suing the Legislature no matter what happens. It's inevitable, according to Mr. Lutz.

“The real question is, do we stand for Texas values?” The jury's still out on that one.

But here's a hint. The gambling lobby is here to stay, according to Mr. Lutz.

"There are some in the Legislature who want to sell you a train wreck of a budget and send you gambling as the white knight."

At present, there are only 10 votes in the House separating the issue from a Constitutional Amendment.

Here's another one.

Did you have any idea that the State of Texas is in the insurance business? There is such a thing as a subsidized insurance policy on coastal dwelling places.

“If they run out of money, they assess other homeowners on their policies to make up the difference...There are a lot of people who own beach houses in Galveston County who are very grateful to you.”

He says it deadpan. More laughter.

The punch line? Dozens upon dozens of state agencies are up for Sunset Review legislation in this session, including the State Board of Insurance and the DOT. This means the Trans Texas Corridor and a lot of proposed toll roads are toast.

Tort reform? There's this thing called “loser pays” and it's found in various forms in many different proposed bills, but it all works out the same. If the plaintiff loses, he pays the defendant's legal fees. If a suit is dismissed because of lack of merit, there is the same thing. Remember, Mr. Lutz said, a Sunset Review Bill is not limited to the subject of the review. The members of both houses can amend it any way they want. So.

Back to the insurance slush fund for owners of beach side dwellings. Instead of calculating the legal fees attorneys rack up in litigation over what part of the damage was done by flooding and what was done by winds by hours billed, the attorneys get a contingency fund of 40% of the settlement, according to insurance regulations.

When a Legislator from Friendswood in Galveston County, insurance broker Lester Taylor, challenged the practice in a proposed bill, the District Judge hearing the cases sealed the records.

They got that one turned around, to everyone's relief. Court records are open records, period. Paragraph. The judge finally saw it their way, that she had no jurisdiction over the rule making process in Austin when her Court is situated in Galveston County.

Then there is the arcana of the legislative rules. Monday's failure of the Voter ID law is really just a delaying tactic. The Legislative Analysis department mistakenly wrote in a delay of 6 calendar days when it should have been worded 6 business days. That's just “the nit-picky way you stall legislation in Austin...They will pass it eventually. Don't worry about that.”

What else is coming up in this session? Where will the most heat and light be generated besides the budget?

There are five emergency laws declared as such by Governor Rick Perry.

1. Voter ID

2. Eminent domain

3. Sonograms to be offered to abortion patients

4. Constitutional convention to propose an amendment for a balanced federal budget

5. A ban of sanctuary cities for illegal immigrants where police are not allowed to inquire about citizenship


That's another whole ball of wax. You can read all the news on that at "The Lone Star Report" blog site.

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