By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – Budgets are a complicated issue. I have a hard enough time getting a grip on my own, let alone the state's. But many of the budget cuts Governor Perry signed yesterday appear to be badly chosen. I'm Maxine Shapiro with KERA Marketplace Midday.
Now, there have been many cuts up until now that I definitely did not agree with. Reducing health insurance for low-income children was one of them. Then I read today that Perry cut another $55 million from universities. This was money the state had allocated for research from three different funds. Research is a huge draw on a university campus. Universities can keep more than $86 million in grants, but those grants are from the federal government.
In order to understand these cuts a little better, I called the Center for Public Policy Priorities in Austin. They're a non-partisan, non-profit policy research organization. The first person I talked to was Chris Pieper. Without mincing any words, Pieper explained how many of these cuts would not have been necessary if other avenues would have even been addressed - for instance, the Delaware Subsidiary loophole. If companies open a subsidiary in Delaware, they're exempt from paying the franchise tax to Texas. Dell, SBC and Belo have done it, to name a few. Closing this loophole would have added $200 million to the budget. Another revenue enhancing proposal would have been a higher tax on cigarettes. Citizens were ready for it. Anywhere from 65 to 75% of those responding to polls statewide favored the idea.
But when I spoke with Eva Deluna, the Center's budget analyst, she said the most curious thing when I asked her about the University Research cut. She explained how Texas is now relying more and more on federal funding, yet in the next couple of years, the U.S. government is planning all kinds of tax cuts and will therefore be cutting state aid. What will we do then? For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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