Perry refuses stimulus package

Dana Lizik

The Signal

Gov. Rick Perry did not accept an $830 million federal education grant for Texas for a number of reasons; mainly stating that to accept the money would violate the Texas Constitution because the federal government applied a special provision that pertained only to Texas for accepting the funding.

“Congress included Texas-only provisions that specifically singled out our state and prohibited Texas from collecting our fair share of this money,” Perry said. “Texas taxpayers are footing the bill for the education jobs fund, and Texas’ hardworking teachers deserve their share of that money. Texas could have legally accepted these funds if Congressman Lloyd Doggett and other Congressional Democrats applied the same rules they gave every other state to Texas, rather than playing politics with Texas teachers’ livelihoods.”

The federal government’s education stimulus money allocated $79 billion to help states facing large budget shortfalls so they could avoid faculty lay-offs, stop program cuts, provide money for school renovations and more. This stimulus would mark the largest federal aid increase education has seen since the World War II era.  For Texas, specifically, the money would provide an extra $173 for each of the state’s 4.8 million students.

The federal government’s revision required Perry to promise not to cut state aid to the education system for three years.  The provision was included because in the past federal education stimulus money was used for education as stipulated, but state funding for education was then cut and diverted elsewhere, effectively exchanging federal funding for state funding.

In 2009, almost $3 billion in federal stimulus money for Texas education was used to replace state money instead of increasing the investment in public education. The extra state money was diverted to road improvements, research funding and other non-education projects.

Perry’s refusal of the stimulus package is based on the Texas Constitution law that prevents legislators from committing future funding.

“The Constitutional problem with the law is that the governor cannot bind future legislatures,” Perry said.  “In this case, the legislation calls for the governor to make assurances on education spending when the legislative body that is charged with writing the appropriations bill has not even been elected yet.”

Government officials in Austin, including U.S. Rep. Lloyd Doggett, D-Austin,  supported this clause for the stimulus package to ensure federal stimulus money is used as a supplement to state funding, not as an alternative.

“This struggle is not about more spending; it is about ensuring that the federal spending we already have is used for the purpose for which it is intended — in this case strengthening public education,” Doggett said.  “It is not about forcing the state to spend more, but only about seeing that the state does not deny aid to education to local schools solely because they have received additional federal aid. The bottom line is this: federal aid to education should actually aid education in our local Texas schools.  I understand that Governor Perry fears accountability for using these federal taxpayer dollars for their intended purpose.”

Despite this setback, Perry does have plans to appeal for the stimulus package.

“Texas Attorney General Greg Abbott filed suit in the U.S. Court of Appeals for the Fifth Circuit to secure the $830 million in education funding and we will continue looking for options and working with federal education officials to secure these funds for Texas schools,” Perry said.

Doggett said the clause was intended to bolster funding for education, but even refusing the stimulus package left Texas no worse off than the state is now.

“It is true that the Governor’s action, for now, places Texas schools in no worse position than they would have been without approval of our Texas Democratic amendment,” Doggett said. “Thanks to the governor, they get no money now, and had there been no such amendment, any money they got would have likely been subtracted from state aid.  That’s what occurred with $3.25 billion in federal support last year —leaving our Texas school children with zero additional benefit from the additional federal funding.”

Governor candidate Bill White said he believes Perry could have found a way to work with the federal government, which would have allowed the state to receive the federal stimulus money now.

“As many have stated, including most recently the editorial board of the Corpus Christi Caller-Times newspaper, the Governor could have worked with the federal government to give them the assurances they requested without violating Texas law,” White said.

What this means for UHCL
UHCL faced a 5 percent budget cut in both the 2009-2010 and 2010-2011 fiscal years. For UHCL, a 5 percent cut translates into $1.4 million, meaning the university lost a total of $2.8 million in the past two years.

Now, UHCL President William Staples said the Texas Education Agency has asked universities to look at a 5, 10 or 15 percent budget cut for the next fiscal year.
Staples said that since Texas does not collect a state income tax, state funding for universities relies on sales tax and school districts’ property tax. However, the state sales tax revenue has decreased. In September 2009, sales tax was down 12.5 percent compared to September 2008.

Staples said that even though there was a slight increase, with sales tax collection up 6.8 percent in September 2010 compared to September 2009, there is still almost 6 percent that has not been regained.

“Over the past decade, and especially since tuition was deregulated in 2003, the percentage of UHCL’s budget from state general revenue has decreased while the percentage from tuition and fees has increased,” Staples said. “This is a trend not only in Texas but across the United States.”

Perry deregulated tuition in 2003, and since then, average tuition and fees in Texas have increased 61.4 percent at public universities and 51.3 percent at community colleges from 2002 to 2006.  Neither Perry nor White have plans to recap tuition but have both proposed other solutions.

“I have proposed what I call a ‘four-year tuition freeze’ meaning that the rates students pay their freshman year of college will be locked in for the next four years,” Perry said.  “This allows students and their families more predictability to plan for the cost of education over four years.  I am also very proud that under my leadership financial aid in Texas has increased by 911 percent.  Higher education is still a bargain, with rates being just below the national average, but we will continue to do all we can to make it more accessible.  And with enrollment rates at an all-time high, we are seeing success in this endeavor.”

White plans to take a different approach, including rewarding those who agree to work in the public service sector.

“There are ways to reduce the costs of college so that tuition does not continue to increase,” White said.  “One way to control costs includes making greater use of existing facilities so that they are used year round. Schools can make summer school a lower cost more attractive option to students and, by doing so, decrease the need for additional facilities due to overcrowding during the regular school year.  Schools can also use more online open source materials, which can save students hundreds of dollars a semester.  I also propose charging little or no tuition for students who commit to public service work upon graduation.”

Staples said that while UHCL enrollment has peaked with more than 8 thousand students, there is still uncertainty as to how the budget will be affected next year.

“Every indication shows the stimulus money will not be available as we go into the next [legislative] session,” Staples said. “It is my understanding that if the state of Texas received additional stimulus money, the allocation of any funding to universities and school districts, as well as any other state agencies, would be at the direction of our state legislature.”