Effect on state could be sweeping
ures, $226 billion federal dollars were spent in Texas. Social Security made up $43 billion of the spending; Medicare accounted for $16 billion, and defense spending totaled $59 billion, DeLuna Castro said.
As far as the state budget goes, automatic federal spending cuts — which would be triggered Jan. 2 by the sequestration outlined in the Budget Control Act of 2011 — could reach $1.1 billion and affect 13 state agencies, according to the state’s Legislative Budget Board.
“It’s not going to seem like the end of the world,” DeLuna Castro said. She added that the $1.1 billion would be cut out of $66 billion that the state agencies requested for 2014 and 2015.
That’s not to say the cuts would be painless, DeLuna Castro said. For example, the Texas Education Agency, which would take the brunt of the fiscal blow, is still dealing with a drastic reduction in funding from the last legislative session, and it can hardly afford more reductions, DeLuna Castro said.
“The dollars we’re talking about support nutrition and health care and educating children with special needs,” she said, adding that housing, workforce training, employment and substance abuse prevention programs are also in jeopardy. “Unfortunately, these are things that saw state money cut or never got it in the first place.”
For the education system, the possible cuts would translate into the loss of services and jobs. The Texas Education Agency could see a reduction of more than $517.6 million, according to the Legislative Budget Board.
One possible casualty could be Title 1 grants established to help students, especially those from disadvantaged backgrounds, meet academic standards. Those grants could see a sequester cut in fiscal 2013 of more than $100 million in Texas. The loss of that federal money would mean that 1,386 education jobs would go away; more than 250,000 low-income students wouldn’t be served and 422 fewer schools would receive federal grant money, according to a report by Sen. Tom Harkin, D-Iowa, chairman of the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies.
Federal special education grants, which would pay for almost 1,000 jobs to support special education students, also could be cut by more than $80 million, Harkin’s report said. And teacher improvement grants worth $18.5 million could be eliminated, threatening the professional development of nearly 20,000 teachers.
Health services could suffer, too, if leaders in Washington cannot figure out how to navigate a way around the fiscal cliff, a term coined by Federal Reserve Chairman Ben Bernanke to describe massive tax hikes and spending cuts that will occur if Congress fails to act. The Texas Department of State Health Services could see a reduction of $181.3 million, according to the Legislative Budget Board.
With sequestration, $10.5 million wouldn’t be available to pay for substance abuse treatment for almost 4,900 people, the report said. Also, cuts to a federal child care and development block grant could do away with child care subsidies for 6,500 Texas children, according to Harkin’s report.
Among the other state agencies in jeopardy of losing federal funding include the General Land Office, which could see a reduction of $104.7 million; the Texas Workforce Commission, which could lose $99.2 million; and the Department of Assistive and Rehabilitative Services, which faces going without $69 million in federal funds, the Legislative Budget Board found.
State Rep. Mike Villarreal, a Democrat from San Antonio and vice chairman of the Interim Committee on Texas Response to Federal Sequestration, said he is worried about how federal cuts associated with the fiscal cliff would affect vulnerable Texans.
“I’m concerned about the families and children who will be impacted,” he said.
State lawmakers and budget writers are not only concerned with reduced federal money to pay for services, but timing could be an issue, too.
State Rep. Dawnna Dukes, D-Austin, said the worst-case scenario for Texas budget writers will be if the process is dragged out in Washington. She noted that the state constitution won’t allow the Legislature to adjourn its 2013 session without a budget.
DeLuna Castro said Dukes, who has long had a seat on the Appropriations committee, and other legislators need a final number from Congress by April to avoid an extended session.
“The timing issue is always a problem,” DeLuna Castro said. “That is a big question mark.”
State Rep. Linda Harper Brown, a Republican from Irving and chair of the House’s sequestration committee, couldn’t be reached for comment, but she will lead a hearing Dec. 11 on the possible effects of falling off the fiscal cliff.