November 15, 2010
Thank you all for coming out today and taking time out of your schedule to think about the upcoming Texas Legislative Session.
Now, I particularly want to thank you for being here because, if you follow what’s going on up at the Capitol at all – and by that I mean, if you occasionally find yourself reading or talking about something besides, y’know, the arguable success of Baylor football (for Baylor, I mean). Or, for that matter, the inarguable lack of success of other teams in Texas right now – then you’ve probably heard things are going to be a little rough under the dome this session.
Really, the only question that’s left is … how rough will things be?
Well, there’s a fascinating answer that you’re starting to hear from some insiders up at the Capitol. I’ve heard it a few times myself in the last few weeks – the same six words, always from very smart, very accomplished folks who have been around that building for a long time.
The response – these folks’ own legislative preview – their quick synopsis of what to expect next session boils down to this:
“Nothing. Good. Is Going. To Happen.”
“Nothing good is going to happen.” That’s the big quote at the top of the movie poster: Texas Legislature; Opens January 11th; “Nothing good is going to happen.”
This thought, this growing consensus – where there’s an incredible apprehension that crosses party lines and philosophical boundaries – is on the budget.
And that’s the way it should be. The budget, after all, is a moral document. It’s the clearest, truest statement of priorities you can find, really, anywhere – in family finances, in a business budget, and of course in government.
And the budget is the truest indicator of values in such a political place as the state capitol.
It’s the one thing that never fails to translate rhetoric into reality, or to expose the inadequacy of easy answers and something-for-nothing schemes.
And, as you may have heard, the budget looks impossibly difficult next year.
Of course, basic answers have been hard to come by. Most importantly, there’s been willful ignorance about how big the problem really even is.
But a lot of folks are expecting a gap of at least $20 billion or more between what the state will collect in 2012 and 2013 and what it’s on track to spend. The whispers are that it will reach $28 billion.
Now, even just $20 billion is a huge, huge number. It’s unfathomable for most people, thank goodness. It represents about a quarter of the budget that the legislature has discretion over – four-fifths of which pays for teachers, schools, colleges and universities, and health necessities of primarily children and the elderly.
And there are basically just three options we have for closing a hole this big: cuts, cash, and the kitty.
Cuts: The legislature can cut deeply and painfully into basic responsibilities and necessities: everything from schools, to health care, to parks, to public safety, to prisons, to roads. These are things that all of our people – no matter how old they are, no matter where they live, no matter how they vote – that all Texans rely on and really need.
Cash: The legislature can raise revenue from Texans at a time when folks are already feeling strapped and worried about putting food on the table. Or those controlling the long-awaited estimates can paint an impossibly, irresponsibly rosy picture of the future and pump up revenue estimates, which will make the problem look smaller now but create supersized problems for the next budget.
Finally, there’s what I call the Kitty: Legislators can drain most or all of our savings accounts, starting with the state’s roughly $8 billion Rainy Day Fund, knowing that our hard times probably aren’t over.
So let’s all keep something in mind as we head into what’s obviously going to be a tough session:
All of us – no matter what party we belong to, no matter where we live or who voted for us, no matter what label we associate ourselves with – all of us are in the same burning house. We’re all scared, or should be, looking for a way out, racking our brains to figure out a way to put out the flames, and trying to decide what we want to save, what’s most important to us.
But here’s the good news – I believe in my bones that we can get out of this. We can save our house, we can save ourselves, and we can save our state.
People say it’s impossible to do in this session alone – and they’re probably right about that. But over the next seven months, we can chart a path that will take Texas to the safe ground it used to know, where budgets were not just balanced but sustainably balanced.
We can start to rebuild to the point that it’s possible to follow the example of our elders, who responsibly invested in the roads, water projects, security, schools and world-class universities that were good for them, good for Texas and good for our future.
It’s possible to have fiscally responsible government that can meet the essential needs of our people – providing roads and water and education and parks and health and safety and security – that every single person and business in this state relies on, things that strengthen the foundation of individual prosperity.
It’s actually fiscally irresponsible to do anything but this. But to do it, we have to look – honestly and responsibly – at how we got here.
We have to go back to where this fire started. We have to understand the mistakes that were made – not to re-litigate the past, but to have a clearer idea of what we need to do and what we need to avoid.
And we need to be honest and clear-eyed about the enormity of the problem we face. Denial and covering up the problem have done this state no favors.
But there’s no more powerful truth serum than a tough budget. And here’s the truth we’re now seeing so clearly:
The budget is a disaster … but it’s not an entirely natural one.
This government – our government – has failed us. It’s been irresponsible with our money, less than candid in its accounting of it, and grossly undisciplined in its empty promises of something-for-nothing.
Yes, the economy is suffering – far more than many have been willing to admit in recent months. And yes, this downturn has taken a real and significant toll on the state and its people.
But the truth is that it took the legislature and others in government to make things as bad as we’re seeing. The folks in control of the state’s finances left the kindling lying around and had every reason to expect it to ignite. And when it did catch fire … well, there wasn’t much of a fire department left to extinguish it.
For years, those in control have balanced the budget with a combination of debt, diversions, and deception.
They’ve diverted billions of dollars that had been promised to roads, parks, hospitals, clean air, utility bill relief, and other necessities – using it instead as a special piggy bank to make the books look balanced.
In fact, over $3 1/2 billion dollars of what people pay to support specific, basic needs and government functions is being diverted in this way. That’s a lot of promises made and then broken. And this deceptive practice has grown – more than doubled – over the past decade.
course, the budget still diverts more than a billion dollars in motor fuels money, despite the broken promises of so many that there will be plans to stop this irresponsible practice.
Those in control have also relied increasingly on debt, particularly in the area of highways, ending the state’s responsible “pay-as-you-go” approach, leaving us all overly dependent on the hypocritical tax of toll roads, and sending debt service skyrocketing more than 250 percent in 10 years.
And, maybe worst of all, they recklessly promised an election-year giveaway without being able to pay for it.
In 2006, those in control revised the Business Tax knowing full well that it wouldn’t cover the check they were writing as part of a tax shift. In the years since, the new Business Tax has failed to live up even to its own inadequate promises.
And the failure has been hidden or covered over through, among other things, a Texas-sized bailout of state government last session. The accounts and money previously used to conceal this failure are gone, spent. The reckoning is here.
Such shortsighted schemes might have worked a while longer if the economy had stayed good and budget writers weren’t yet completely hooked on gimmickry.
But they became more and more common, more and more dangerous. Meanwhile, the flames of the recession began to lap up against Texas and its budget, exposing the weaknesses in – and poor management of – our finances.
The mismanagement of the budget – this irresponsible handling of our most moral document – makes it harder and harder to balance the state’s finances, and all but impossible to sustainably balance them. And that means it’s harder and harder to provide necessities that are patently good for Texans and the future Texas economy.
And now, in the light of this blaze, many of those responsible for it look at it with nothing but despair and complacency.
So those in control lock themselves in backrooms and quietly decide that Texas will no longer live up to its legacy. If allowed to continue, these practices will betray our children by assigning them the responsibility of building their own roads, creating their own water supplies, securing themselves, and rebuilding an education system. They will force our children to both clean up the mess and, at the same time, try to catch up with a global economy that’s passing us by.
And they declare, like it’s some grim joke, that nothing good is going to happen. They grasp for this overarching excuse as though it somehow absolves them of the tragedy they created and forecloses on the possibility – the imperative – that we all do good and do better.
Well, it’s up to us, all of us, to prove them wrong.
We owe it to this state, to its parents, to our schools and our teachers, to our small business owners and innovators, to our elderly and infirm – we owe it to our kids – to reject this immoral notion.
We owe it to our children to force those responsible for these wrongs not only to be accountable for them, but to correct them.
We owe it to our children to put Texas on a path to stability, where it can tend to its necessities and its future.
Only the most radical government philosophy would say we can’t, shouldn’t or won’t keep our people safe and healthy. Or that we shouldn’t provide our children with the water and roads and power and other fundamental necessities and economic building blocks that our own parents and grandparents left to us.
And it would be truly, frighteningly radical – well beyond the mainstream values that have defined Texas since it’s own Declaration of Independence – to waffle on our commitment to offer all of our kids the best possible education, or to try to get Texas through the 21st Century without a workforce that’s ready to compete.
They say there’s no hope? This is just the way it has to be under these circumstances? I say that’s the same sort of deception and irresponsibility that got us here.
They say they’re the victims of these uncertain times? I say they’re the cause of them.
They say we just don’t understand the process, or that we don’t need to know the truth about how public money has been mismanaged, or that it’s somehow too early to contemplate what necessities we’re all supposed to live without?
Well, I say Texans are smart enough to understand that their leaders have led them into a budget crisis. And I say they – we all – deserve every bit of information that could show how we ended up here … and how we’re supposed to get out.
No one, no matter how conservative, should feel good about brutal cuts that could potentially put teachers out of their jobs, packing kids into classrooms and undercutting their ability to learn there.
No one should be satisfied with so-called solutions that might yank away children’s health care, jack up tuition yet again, compromise our prisons and our security, or, directly or indirectly, send thousands of Texans to the unemployment line.
Furthermore, no one – no one – should want to ask Texans for more of their money, particularly at a time when they’re already facing so much uncertainty and clinging so tenuously to the lives they know.
No one should stand for the hypocrisy that brags about balancing the budget through sacrifice, yet quietly deceives Texans by taking more of their money through hidden taxes and fees.
And no one should want to empty out the state’s savings with the full knowledge that doing so will look – and, most likely, will prove to be – shortsighted and reckless in the very near future.
The truth is, something good CAN happen this session.
In the midst of this terrible fiscal fire, the legislature CAN help Texas rebound and rebuild for a more stable future.
And our leaders CAN restore faith and confidence in the state, and responsibility and honesty in its budget.
I believe this session, this budget, will be a defining one for generations. If we put Texas on a path to budget honesty, if we hold those in control accountable, and if we reclaim the morality in this moral document, then we can – right now – begin building a foundation for prosperity in the 21st Century that rivals or exceeds everything we’ve experienced over the last 100 years.
We dare not miss this chance. Because if we do nothing but drain our state’s savings, deploy the last bits of accounting trickery that aren’t already in place, quietly raise taxes and fees on unsuspecting Texans, and cut cruelly into the needs of children, the elderly and every other Texan – in other words, if we truly come out of this session with “nothing good” – then our budget crises will become chronic.
Then we’ll all be back here in two years with similar challenges and precious few options for coping with them. Then we’ll have to face fundamental shifts in education and healthcare policy – changes we can already see on the horizon – in a state of desperation. And we’ll be that much further away from being able to invest in the road and transportation systems, water reserves, schools and universities that were left to us by our parents and grandparents, and that, I believe, we’re morally bound to pass on to our children.
The first step – the very first thing legislators must do – is to start acting like not just grownups but like responsible citizens. They must reform these broken and burned fiscal practices and the budget-writing process.
Before anything else, we must restore honesty a
nd accountability in the way the state raises and spends money, and rebuild trust with the taxpayers who’ve given it to us.
It’s an open secret that unaccountability and confusion dominate the process right now. It’s ironic that the budget has actually become very transparently mismanaged.
These malignancies don’t merely contaminate the budget. They don’t simply look bad. As I’ve said, they are in no small part a cause of our current challenges – and we must cut them out of the system.
And while I know – we all know – this will be a challenging year, we must not pass on this imperative for reform. Because if nothing else, we will never be able to confront our larger budget problem until we understand what we’re facing.
In the coming weeks, I’ll introduce a three-part package of reforms to create an “Honesty Agenda” in the Texas Capitol, transforming the ways that public money is appropriated, reported, and ultimately spent. These changes will truly allow Texas to be run like a business, and they’ll protect Texans from reckless decisions that leave us scrambling to meet responsibilities, provide necessities, and keep the state from building a future.
The first part of this Honesty Agenda will be a series of “Accountability” reforms. These are bills and rule changes that will rebuild trust with Texans by opening the state’s appropriations and finances to the public and requiring real transparency for those in control of the budget:
— I propose changing the Senate’s rules to require the final version of the budget (which is known as the Conference Committee report) as well as related summaries and comparison documents, to lay out in public for at least five days so that legislators – and all Texans – can really know and have confidence in what’s being decided for the next two years.
— I’ll demand that the public hear more information, in a timelier way, about the fiscal condition of the state they’ve entrusted to their leaders. Specifically:
• The Comptroller should have to provide more regular reports about the state’s budget and its finances.
• The Legislative Budget Board – the legislature’s budget overseers during the four-fifths of the biennium that we aren’t in session – should have to formally receive these reports, and to physically meet and receive input from everyday Texans before major systematic changes, such as across-the-board spending cuts, can be made to the budget.
• And the Comptroller should not be allowed to issue short-term, budget-balancing debt unless the state’s Cash Management Committee – which consists of the top officials charged with overseeing the state’s debt situation – meets to receive up-to-date information about the state’s finances and debt picture.
— And I’ll propose that any special tax or fee – what budget writers refer to as general revenue dedicated funds – that these taxes and fees be suspended if they aren’t paying for the specific cause that Texans were told they would go toward.
Second, I will offer a “stability” package of reforms that will modernize government and restore it so legislators, and voters, can have faith in major policy and budget decisions that will set the course of the state and its future:
— I’ll fight for a greater use of technology, which will give Texans a better idea of what’s actually in the budget. Just as importantly, this data – and the ability to analyze it – will vest everyday Texans as full partners in the legislature’s efforts to balance the budget.
— I’ll work for systematic changes to ensure that new laws won’t take effect if there’s no money to pay for them.
— I’ll crack down on reckless, something-for-nothing governance and ensure that no politician will be able to score fleeting political points by eliminating revenue that the state relies on without declaring – openly and honestly – what functions and necessities will be eliminated to make up that money.
— I’ll end unfunded mandates that don’t actually save taxpayers money, but instead just shift obligations away from the state and toward local governments.
— And I’ll require honesty about legislative decisions that turn the state’s back on the billions of dollars that Texans send to Washington DC and deserve to get back – and details about what these decisions cost us.
Finally, as the third part of this Honesty Agenda, I will fight to make sure that those in charge set out a path for cleaning up this fiscal mess and building a responsible, truthful, truly moral state budget.
Given everything we’ve talked about today, there’s no question that the current system has utterly failed to produce the responsible, honest, stable, sustainably balanced budget that Texans want and, I think, mistakenly believe they’re getting.
Quite simply, Texas needs a new set of eyes to look at these problems. We need to tap our vast resources of talent, creativity and business expertise and invite bright, committed outsiders to analyze what we’re doing well, what we’re doing poorly, and what we need to do better.
We need to take more time – not just the four-and-a-half months of a legislative session, but a reasonable, realistic, and responsible amount of time – to solve the problems that have festered for years and decades.
We need a sincerely transparent process, reaching across the state, that will allow everyday Texans to provide badly needed input on what the budget is doing and what it needs to do.
And we need to rebuild the budget from scratch – from the ground up – prioritizing things that give taxpayers a return on their investment, reflect all of our shared values, and position Texas to be an economic powerhouse in the 21st Century as it was in the 20th.
These are basic reforms. They’re also absolutely essential.
Texas must – it must – reform its budget process.
It will put us in far better position to weather the fiscal storms that we can already forecast. In fact, it may be the only thing that can repair the damage that’s been done to the budget, restore faith and trust in the legislature, and position Texas to build for its future.
And make no mistake: as I survey bad option-after-bad option for getting out of this year’s budget crisis, I will support none of them – none of them – without these sorts of basic reforms.
I will not vote to raise taxes or fees on Texans when no one will commit to them where their money is going.
I will not vote for budget cuts just for the sake of budget cuts – actions that would make it harder for young Texans to go to college, make us less safe, have us sitting in traffic for longer and longer, and cruelly target the youngest and most vulnerable Texans – when no one will take the time to determine whether those cuts are appropriate or what they truly cost.
And I will not vote to drain all or part of the Rainy Day Fund, or any other savings account, to cover the negligence of those who insist on spending more money than they’re making while they conceal the structural deficits they created.
In short, I will reject all of these understandably tough choices – these pillars of the “nothing good is going to happen” mindset – if very good, very necessary budget reforms are left on the table.
Hopefully, it won’t come to that.
I deeply hope that those in control of the legislative process will rea
lly look at these basic reforms, give them a fair hearing, and endorse them as necessary changes that will lead Texas to stable, secure footing for years and even generations.
All of us elected to serve can, and probably do, believe in the basic tenets of this reform package. They’re straightforward. They’re not partisan. And in a sane world, they wouldn’t be controversial at all. Indeed, they’re the sorts of things that should already be in place.
So this is an opportunity, regardless of other differences we may have about politics and specific policies, to work with each other and with everyone who believes in truly honest and accountable government.
This is our shared chance to prove not only that we can spend the people’s money wisely, but that we want to and will responsibly work to do so.
This is our moment to assure that we can meet the needs of today’s Texans, and that we will live up to our legacy of helping tomorrow’s Texans prosper in this growing state and economically competitive world.
This is where we can prove, where we must prove, that we can do better with our most moral document, and put out this fire that’s been allowed to burn for far too long.
I’m looking forward to working in that manner.
Because good things can happen in the next seven months. We simply have to be honest – and accountable – about our troubles and the cause of them.
We have to take responsibility for confronting our challenges and stop kicking them down the road to future generations of Texans.
And we have to be thoughtful, careful, creative and fearless in finding ways to balance today’s budgets while building tomorrow’s Texas.
This is our time – right now, even in the midst of this terrible crisis – to reject the failed policies that are endangering our economy and our future.
Now is our chance – perhaps not our best chance, but quite possibly our last – to demand the discipline, honesty, responsibility and accountability that have been missing from the legislative process for too long.
We simply have to commit to it, and get our leaders to do the same.
Yes, we’ll have to work hard – really, really hard – to make sure they do. But while good things – even great things – are never easy, they’re always – always – within a Texan’s grasp.
Thank you. God bless you. And God bless our great state.