By J. Lyn Carl, GalleryWatch.com
Austin, TX – Governor Rick Perry's public school finance proposal "replaces Robin Hood with Robbin' Everybody," said State Comptroller Carole Keeton Strayhorn Monday.
Calling the fiscal inadequacies in the governor's plan "stupendous," Strayhorn said the Perry plan will create a deficit of more than $10 billion over the first five years alone. The fiscal inadequacies in his plan, she said, are "only surpassed by its policy inadequacies and failure to address the school funding crisis."
"Over the next five years, Governor Perry's plan will increase taxes and levies by $12.1 billion and create a deficit of more than $10 billion that our children will be paying for the rest of their lives. You've heard of financing schemes that have a balloon payment at the end? This one has the Hindenburg."
Strayhorn early this morning delivered her updated revenue estimate to the state's leadership and members of the legislature, which the State Constitution requires she must provide prior to every legislative session. The Fourth Called Session of the 78th Legislature begins Tuesday.
In addition, she noted at a press conference this afternoon, the constitution also provides that the comptroller must ensure the state has a "pay-as-you-go, no deficit spending, balanced budget."
That being said, Strayhorn called the $1.8 billion in revenues from a tax acceleration in the Perry plan "smoke and mirrors" and said overall his proposal "fails our Texas taxpayers and fails our Texas schoolchildren."
When he laid out his proposal this morning before the Joint Committee on Public School Finance, Perry pointed out that it would increase spending by an average of $375 per student through funding to school districts for the 2006-07 school year.
Strayhorn stopped short of using her trademark, "Hogwash" comment but did say the increased funding was a "far cry short" of the $375 Perry is touting. "On average," she said, "the plan will increase spending by $10 annually in 2006 and $53 in 2007."
Strayhorn said more than 60 percent of school districts don't get any more money.
The comptroller also took to task the governor's figures relating to the average savings his plan would provide homeowners. She said he based his proposal on an average home being valued at $167,000. Those figures, she said, were from the Real Estate Center's average price for Multiple Listing Service (MLS), which she said "doesn't at all represent a typical home." Her figures show the average home value is $97,000, based on information her staff gleaned from Texas school districts.
Thus, said Strayhorn, the governor's projections on how much the "average" homeowner would save - $418 per year - is more like $204 per year or "less than $20 per month."
The comptroller reeled off a laundry list of ways the governor's plan fails both taxpayers and school children. She said there is a $1.46 billion immediate tax and levy hike in fiscal year 2005, which begins in September, with no property tax relief at all in FY 2005. There will be another $5.9 billion tax and levy hike in 2006-07, she noted, and a one-time $1.8 billion tax acceleration. "It does not work financially," she said, "and creates a deficit of more than $10 billion over five years."
Strayhorn said the Perry proposal to tax sexually oriented nightclubs falls $10 million short of his $45 million projection; business property taxes in 203 of the state's school districts would go up, not down; it destroys local control over both education and taxation; it perpetuates inequality; makes the school finance system even more complex and difficult to administer; provides "insignificant" new money for "unworkable" excellences incentives that cannot be matched by local funds; and turns what was previously called a split-roll tax and is now called a "constitutionally linked tax system" by the governor into a system that "rewards rich, mansion districts."
Still smarting from the last legislative session when the legislature removed two high profile programs from her office in a move many called retribution for her refusal to initially certify the state budget and for pointing out legislation passed resulted in billions in increased fees and expenses, Strayhorn said she is doing exactly what the governor and the legislature told her to do - "tending to my core responsibilities" of estimating state revenues, certifying the state budget, and running numbers.
She said it is her responsibility to tell the people of Texas that the governor's plan leaves them $10 billion in the hole over the next five years.
Earlier today, after Strayhorn delivered her revenue estimate update by letter to the state's leadership and mentioned the $10 billion deficit she said will result if the governor's plan is instituted, Perry's Press Secretary Kathy Walt issued a statement in response to the criticism in the letter from Strayhorn.
"Constructive ideas are always welcome, but Comptroller Strayhorn's own consistency and math calculations are questionable," said Walt. "In addition to recommending tougher CHIP (Children's Health Insurance Program) and Medicaid eligibility rules herself, the Comptroller's last major revenue estimate was wrong by a factor of 100 percent."
"We have the most accurate revenue estimates in the country," countered Strayhorn. "I'm telling the people of Texas the truth. The governor didn't like it when I told them the bill the governor signed into law created $2.7 billion in new fees and out-of-pocket expenses," she said. "They did not like me telling the people of Texas the truth then, and they don't like me telling the people of Texas the truth now.
"My responsibility is to give accurate numbers to the people of Texas. This governor's plan is $10 billion short."
Questioned regarding the governor's proposal to dedicate two-thirds of any state surplus to continued reduction of property taxes, Strayhorn responded, "When you have a $10 billion deficit, there is no surplus."
James LeBas, chief revenue estimator for the comptroller's office said Strayhorn's figures include a five-year forecast, where the governor's numbers cover only three years. "Years four and five are where the deficit really mushrooms," he said.
As has been the case in recent months, talk turned to the 2006 governor's race, where there has been much speculation that Strayhorn will challenge fellow Republican Perry for the key to the Governor's Mansion. After citing what she said are shortcomings of the governor's proposal, Strayhorn was asked if the state needs a new governor. She admitted that if Perry seeks re-election in 2006, "Some of you (media) have suggested that it might be a contested primary.
"But today is not about politics. It's about finding a meaningful solution to school finance."