the tindog coffeehouse

A couple of years ago, I quoted an article from The Economist comparing California, with its high unemployment and oppressive government regulation, to Texas, which has a lower-than-average unemployment rate and business-friendlier environment. While Texas naturally came out ahead, the article did praise California’s “inventive” nature, to which I replied, “Thanks, but no thanks.”

I may have to rethink that.

Without the prospects of a massive federal stimulus package, the Texas legislature is wrestling with a $27 billion budget shortfall. And adamantly opposed to raising taxes or dipping into the state’s $9.4 billion rainy day fund, the Republican-led congress is hoping the close the gap simply by cutting spending. A lot.

Such budget cuts would impact all areas of the state government, but at least in preliminary proposals, education would take one of the biggest hits, costing the jobs of tens of thousands of teachers statewide. Medical programs like Medicaid and the Children’s Health Insurance Program (CHIP) would be also slashed. But can we really afford to do that?

According to the left-leaning Texas Legislature Study Group, Texas doesn’t look too good compared to other states in the areas of health care and education. Texas has the 2nd highest public school enrollment but the lowest percentage of adults with a high school diploma. The state ranks 44th when it comes to state and local expenditures per student (which could be interpreted as a good or bad thing), but SAT scores rank an embarrassing 45th.

Meanwhile, Texas has the highest percentage of population uninsured, the highest percentage of uninsured children, the 2nd highest birth rate, and the 4th highest percentage of children living in poverty. And it ranks at or near the bottom in terms of per capita spending on Medicaid (49th), percentage of low income population covered by Medicaid (49th), per capita spending on mental health (50th), and percentage of population with employer-based health insurance (48th).

Obviously, with such a huge budget deficit to overcome, it’s not realistic to expect that no cuts would be made to education or health care spending. But as the New York Times’ Paul Krugman points out, such cuts put a disproportionate burden on the state’s children:

While low spending may sound good in the abstract, what it amounts to in practice is low spending on children, who account directly or indirectly for a large part of government outlays at the state and local level.

And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average. …

It’s not a pretty picture; compassion aside, you have to wonder — and many business people in Texas do — how the state can prosper in the long run with a future work force blighted by childhood poverty, poor health and lack of education.

With Texas already lagging far behind the rest of the country in health and education, how does anyone expect things to get better by drastically cutting spending in those areas? They won’t. Still, the budget still has to be balanced somehow. Rick Perry likes to tout’s the state’s low-tax, pro-business conservatism, yet the reality is that simply cutting spending isn’t going to be enough to close the budget gap. But even if that were possible, what would be the long-term consequences?

Unfortunately, I think the answer to the budget problem is a lot more complicated than just cutting costs. Yes, some across-the-board cuts will have to be made, which will result in some people losing their jobs. But additional money from the rainy day fund and higher taxes and fees must also be included.

Previously:
Don’t mess with Texas
‘Stimulus’ spending could cost Texas 171,900 jobs
Economist: Marriage is ‘necessary for good economic development’
Single parents cost taxpayers $112 billion