One thing is clear about the budgets submitted recently to the Texas Senate and House: a substantial portion of the state’s private economy depends on public funding.
Both budgets would close Texas’ $26 billion two-year budget deficit by reducing state services by more than 30 percent. These cuts eliminate 10,000 state employee jobs, but many state services are provided by private employers. As a result, even more private sector jobs will be lost, bad news for a state whose unemployment rate is 8.3 percent and during December had the second highest rate of increased unemployment among the nation’s 50 states.
HB 1, the proposed House budget, will be the starting point for budget negotiations that will take place over the next five months. It assumes that there will be no new sources of revenue and that funds from the state’s Rainy Day Fund, a reserve fund, will not be used.
The budget reduces Medicaid funding by $14 billion, a funding loss that will ripple throughout the private health care industry. “These cuts will be the death blow to Medicaid providers in Texas,” said George Linial, president of the Texas Association of Homes and Services for the Aged, a group of non-profit, community-based organizations that serve elderly Texans.
Non-profit nursing homes have suffered a 20 percent decline in charitable donations, and the proposed Medicaid cuts will make it difficult for them to keep their doors open. “Organizations that have provided benevolent care for almost 100 years in Texas are going to close their doors to caring for our most frail elderly in the state,” Linial said. “Thousands of health care jobs will be lost.”
For profit nursing homes will also feel the impact. These cuts “will jeopardize (nursing home’s) ongoing ability to provide quality care to Texas’ oldest, most vulnerable seniors and will put at risk facility jobs that make a difference in patient outcomes” said a fact sheet prepared by the Texas Health Care Association.
The proposed budget also cuts funding for in-home care for the elderly and for people with disabilities. Both for profit and non-profit agencies provide these services. Other cuts will affect private contractors that provide services to state health and human service agencies and criminal justice agencies.
Capital spending is also cut. As a result, repairs to the eleven state supported living centers, the homes to more than 4,000 Texans with mental and developmental disabilities, will not be made, affecting local contractors all over the state.
The axe falls heavy on education workers. Public education funding is cut by $2.7 billion. In anticipation of these cuts, the Austin Independent School District will eliminate nearly 500 jobs. Not all districts will cut this many jobs, but none of 1229 public school districts in Texas will be spared funding cuts.
The House budget also reduces funding for community colleges by $54.9 million. Four of the state’s 51 community college would have all of their state funding eliminated. “This will effectively end these (four) colleges as viable institutions in their communities,” said the Texas Association of Community Colleges in a press release.
The closures of these community colleges will cause hundreds of employees to lose their jobs, and businesses that serve the closed colleges will also be affected.