Opinion

Since the business lobby took complete control of Texas government, the race to the bottom has quickened here, and at a recent press conference, the Texas Conservative Coalition gave us a look at what the bottom looks like – lower wages for workers, slashed benefits for state employees, and deep cuts in programs that aid low-income working families.

The coalition, a group of about 70 state legislators from both parties, used the press conference to announce how it proposes to deal with the huge budget shortfall facing the State of Texas. In the past, most of the members of the coalition were backbenchers, who argued that the meager services that Texas provided to working people were too much, but did not have much power.

But with the Republican takeover of both the state House and Senate and the uncontested control of state government in the hands of the business lobby, these lawmakers will have more clout. Some will assume leadership of important committees and use this opportunity to advance their proposals.

If the extreme cuts proposed by the Texas Conservative Coalition can be imposed with minimal public backlash, the Bush administration may feel emboldened to do the same for the U.S. as a whole. And of course, just like in Texas, working families will bear the brunt of these cuts.

The budget shortfall, which the coalition’s proposals are meant to address, is the biggest in memory. The state comptroller estimated it to be $9.9 billion – $1.7 billion for fiscal year 2003, which ends in September, and $7.2 billion for fiscal years 2004 and 2005. But a liberal research center based in Austin, the Center for Public Policy Priorities estimated the budget gap to be $15 billion.

The coalition is recommending $4 billion in cuts, and working families will bear the burden of most of them. For example, the coalition proposes eliminating the prevailing wage law, which will lower wages for construction workers, lowering insurance benefits for state employees, eliminating the $1,000 per teacher that the state provides to make health insurance affordable for teachers, and eliminating a host of jobs held by state employees through privatization.

The proposals would also eliminate Medicaid coverage for a number of low-income working families. The coalition argues that the state is too generous with providing benefits because it covers pregnant women at 185 percent of poverty while federal regulations require that states only cover pregnant women at 133 percent. If this cutback were enacted, about 12,300 pregnant women would lose Medicaid coverage.

The coalition also recommends that parents of children enrolled in the Children’s Health Insurance Program be required to re-enroll their children every month after an initial three-month period. CHIP provides children’s health insurance for families who earn 200 percent of the federal poverty level but don’t qualify for Medicaid. Since it’s enactment, the rate of uninsured children has dropped from 24 percent in 1999 to 21.5 percent today. Forcing a monthly re-enrollment will result in more children dropping out of CHIP.

The coalition contends that Texas is too generous with the services it provides, but working people who rely on these services would probably think different. About 52,000 working families who need assistance to pay for childcare are on a waiting list for subsidies and 60,000 families whose disabled relatives need community services are also on a waiting list.

Texas also spends less per capita than other states on basic services. It spends $73 per person on public health, 45th in the nation, $1001 per person on public education, 31st in the nation, $178 per person on highways, 47th in the nation, and $53 per person on parks and recreation, 47th in the nation.

With a massive shortfall facing the state, revenue enhancements would seem to be in order, and the CPPP has proposed some that would require businesses to pay their fair share. For example, because of loopholes in the franchise tax law, large companies such as Dell and SBC pay no franchise tax. Closing the loopholes would generate hundreds of millions of dollars. Even more money could be raised if the sales tax were brought up to date. Currently, goods are taxed more than services even though services make up a greater portion of the state economy. Legal, brokerage, and architectural services are examples of some of the services, most of which are used by business and the wealthy, that go untaxed. Implementing a sales tax on these kinds of services would raise about $7.5 billion.

But the business lobby has already made it known that it won’t tolerate any new revenue raising proposals and will only consider cuts in service. The lobby disguises these cuts as an opportunity to reform government. The Austin American-Statesman in its article on the coalition’s press conference quoted Peggy Venable of Texas Citizens for a Sound Economy, a front group for the business lobby, as saying that “the budget shortfall is the greatest opportunity we have had in Texas in many years to address what state government should be doing.” If the Texas Conservative Coalition and the business lobby make the most of this opportunity, the health, welfare, and safety of working families in Texas will be in great peril.

John Lane is a writer from Austin, Texas and can be reached at pww@pww.org

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