Watson Wire

When Failure is the Good News

Tuesday, February 08, 2011 |

February 8, 2011

There's an old joke about a calculating daughter who's away at college for her freshman year when she calls her loving daddy.
 
She tells him that she's been in a bad car wreck.  She describes how she rolled her car, flipping it three times and hitting a row of other cars.  She details lots of crunched metal and broken glass and says all of the cars were totaled.  He understandably becomes extremely upset – and grows more so as she adds detail after detail of this disaster.
 
And then, at the moment of his maximum angst and agitation, she says, "Calm down Daddy.  I wasn't really in any wreck.  But I did fail my math class."

No joke

You know, for the folks in control of Texas' finances who are working so hard to avoid blame for the mess they've put us all in, the depressing, painful budget picture we've finally glimpsed over the last weeks may have given them an idea:

As Texans get to know this mess, they're likely to accept anything that looks like good news ...

Even if it's, y'know, really only less-bad news.  

If the budget looks awful enough (the reasoning might go), Texans will be so horrified by the dismantling of basic necessities that they won't even demand that those in control fix the state's structural deficit they created, make the budget more accountable, or even provide the basic functions that Texans actually want to see.

No, budget writers may calculate (allegedly, mind you) that if they do figure out a way to limp through the next two years without fundamentally changing the way they do business – perhaps by restoring a portion of the things people currently see on the chopping block – well, people will end up being somewhat relieved and, therefore, relatively happy with how it turns out.

Because, hey, it's not as bad as Texans were told it's going to be.
 

Get ready

So get ready to to hear so-called solutions that don’t really address the fact that the state has failed math class or solve the structural issues undermining Texas' finances and its future.

Get ready for more of the debt, diversions and deception that helped create this crisis in the first place, without even an acknowledgment that the state should be doing things differently. 

Get ready to hear those in control declare themselves victims, avoiding accountability for problems they helped create but can’t, or won't, solve.

Oh – and get ready for short-sighted budget decisions that are still really bad for Texas and it's future, but that have the arguable virtue of not being as bad as the ones we're being shown right now.

Settling for the unacceptable

I posted a note on my Facebook page yesterday summarizing some of the dramatic things that budget writers are calling for.  It's a worst-case scenario for anyone who cares about Texas' students, seniors and security, and I encourage you to take a quick look at what folks are talking about.  Here's the link.

But these challenges are only part of the problem.  Another would be what'll happen if the state tries to paper-over the situation that created them.

I’ve talked about my Honesty Agenda and the need for fundamental budget reform.  I still think that first and foremost:

• Texans must truly know what’s in the budget;

• Debt, diversions and deception must be flushed out of the state’s fiscal system;

• Those in control must be held accountable for the state’s poor fiscal condition;

• Information must be made more readily available;

• And the budget must be re-written so that it’s on the side of hard-working Texans.

This difficult budget offers Texas leaders a chance to not only balance the books this year, but to put Texas on a path to doing it sustainably so legislators don’t have to keep coming back, session after session, to patch over a structural hole.

However, there are less candid paths open to those in control of the budget, as well.

Already, some groups are urging that the state employ every accounting trick, including the one-time postponement of payments into another fiscal year, to help kick the can down the road.  Revenue will almost certainly increase, probably through fee increases and other mechanisms that those in control will describe as something other than a tax increase but then use for taxing purposes.
 
Some of the decisions will almost surely cause an increase in local property taxes.  And the diversion of funds dedicated to a specific purpose – and the use of them to certify more spending in the budget – is almost certain to increase significantly.

Even worse than that, some have already started to redefine a “budget cut” to hide the impact of what they’re doing.  For instance, it’s a cut – and a major one – if the state leaves school funding static despite an increase in students, leading to a big drop in per-student investment.

This can be done right

Now, this is a tough budget in a still-weak economy.  There are things we need to do to get through it.  There's no question that the budget will need to be cut.  And, I would much rather delay a payment or two if it means saving our nursing homes and our schools.

But let's be clear that that's what's going on. 

Those in control must be very honest about what gimmicks they're employing, what those mean to the state’s finances, and how they plan to get back on the right track. 

They must be honest about the cuts they do bring forward – not simply to scare people, but to get through this tough time.  And they must acknowledge those decisions that might threaten Texas’ economy and its future and start planning – immediately – to restore those core functions.

And they must put Texas on a path to ensuring that public finances are completely open and honest, budget writers are accountable for their decisions, and the budgets themselves stand squarely on the side of hard-working Texans.

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