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Letter to the Editor
February 28, 2010

Hi Guys:

Here’s a great piece by SAEN. All of these cuts will most massively affect—you guessed it—El Paso.

Massive cuts were predicted by your humble Senator when he called the Craddick//Perry tax scheme a “Giant Texas Tax Shift”. Swapping property taxes that fund schools, for risky business income taxes that have never been collected, resulted in exactly what we predicted—additional property tax burdens to El Paso homeowners mostly at schools struggling so hard to keep class size down---all because state leaders flunked the test of solving school finance in Austin.

Hi Guys:

 

Here’s a great piece by SAEN. All of these cuts will most massively affect—you guessed it—El Paso.

 

Massive cuts were predicted by your humble Senator when he called the Craddick//Perry tax scheme a “Giant Texas Tax Shift”. Swapping  property taxes that fund schools, for risky business income taxes that have never been collected, resulted in exactly what we predicted—additional property tax  burdens to El Paso homeowners mostly at schools struggling so hard to keep class size down---all  because state leaders flunked the test of solving school finance in Austin.

 

Perry’s tax shift just moved the tax here—because he failed to deal with solutions there. That is the cost of failed, incompetent and irresponsible leadership.

 

The core issue has been, and will be next session a flawed tax system that does not work—and failed leaders who can’t even talk about how to fix it.

 

Now, Texas will have a $19b minimum deficit that will result in massive cuts to programs that we hold dear—like good schools, the community college, UTEP,  CHIP, veteran’s health and Medicaid--- because Perry can no longer rely on Obama to bail him out. Perry’s lobby party in Austin is over—people want answers, not more ads.

 

Have you heard this? Last session, Perry massively miscalculated Medicaid, Medicare, CHIP, and unemployment caseloads. Now trusted old hand Thomas Suehs at HHS says the state match to keep key programs alive will have to triple.

 

What about roads? Perry, Dewhurst and Ogden all participated in this malpractice. TXDOT is dead broke. Without Obama bailouts, TXDOT will have no money to build new roads by 2012. Ask Diedre Delisi,  Rick Perry’s old chief of staff if you don’t believe me. Perry should pay more attention to success on the roads of Texas than secession from the union that is America.

 

What about education—the bedrock of America’s innovation, prosperity and equality? For us here in El Paso, our children are our bottom line.

 

Expect massive deficits at EPISD, Canutillo and every district except YISD, which narrowly passed the $13c property tax increase here, because Perry refused to consider it there.  Now all other districts face an angry public on property taxes just as $300m of ARM mortgages are about to re—calculate to higher interest levels, and the El Paso tax base re—calculates to higher foreclosures. Perry and Dewhurst were warned by me personally about this coming tsunami.

 

Our office delivered innovative solutions to big issues to both Perry and Dewhurst back when we had time to fix them.  And Perry, Craddick and Dewhurst declined to lead. Now, it’s time to for two of them to face the voters.  Government is us, working together to make Texas better, not a backroom deal club to benefit wealthy donors.

 

Now, more than ever is the time for change!

 

Senator Eliot Shapleigh

D—God’s Country

El Paso, Texas

 

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Express-News Editorial Board /Feb 2010-

The potential shortfall looming over the state's 2010-2011 budget is unprecedented. John O'Brien, director of the Legislative Budget Board, makes a deficit estimate of $10.8 billion for the next biennium, the Dallas Morning News reported.

Sen. Tommy Williams, R-The Woodlands, a member of the Senate Finance Committee, puts the amount at $17 billion. Two Democrats on the finance panel — Sens. Royce West of Dallas and Eliot Shapleigh of El Paso, says it's between $19 billion and $20 billion.

If those figures are remarkable, they're not entirely unexpected. When the Legislature cut local property taxes by more than $13 billion, lawmakers assumed a new margins tax on businesses and continued economic expansion would fill the budgetary hole. In fact, Gov. Rick Perry confidently pushed for additional property tax cuts during the 2007 session.

The Editorial Board of the Express-News strenuously opposed that effort as premature, advising lawmakers to put more money in a taxpayer lockbox until the numbers could be verified.

“The solvency of the biennium budget rests on the efficiency of a tax that has never been collected and optimistic forecasts about the Texas economy,” read an editorial from May 2007. “A durable and reliable fiscal policy is more important than a temporary tax cut that can't be sustained.”

As it turned out, the margins tax didn't generate as much revenue as expected. And that was before the economy hit the skids.

The Legislature faced a shortfall of $9 billion going into the 2009 session. But $12 billion in federal stimulus money spared the governor and lawmakers from having to make any hard decisions about spending or revenue in the $182 billion budget for the current biennium.

The latest report from State Comptroller Susan Combs shows sales tax collections — which account for about two-thirds of state tax receipts — are still down double digits over the previous year. Combs warns that similar drops are likely for the foreseeable future.

While state revenues are declining, Texas can't count on another massive infusion of federal dollars to bail out the budget. That has led to Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus requesting state agencies to submit across the board 5-percent budget cuts.

Those cuts would total about $1 billion — hardly enough to make a dent in the deficits being projected for the 2010-2011 budget. In all likelihood, they won't be fully realized. The Texas Department of Criminal Justice is already seeking a waiver to avoid about $240 million in cuts officials say would put public safety at risk.

If not cuts to the prison system, then where — road construction, public schools, higher education, child protection, border security? Far deeper cuts in spending are going to be needed or new sources of revenue or a combination of both.

No easy answers exist for the budget crisis. The cuts in property tax rates put the state budget in worse shape for the next biennium. State leaders must make the necessary responsible decisions.


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