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Saturday, March 26, 2011

Layoffs Loom

The Texas House will take up the state's biennial budget on Friday and address a multi-billion budget shortfall. CSHB 1 appropriates $163.5 billion for FY 2012-13, which is $23 billion or 12.3% less than the 2010-11 appropriation. The Legislative Budget Board forecasts that this will result in a significant reduction in state and local government employees, including teacher layoffs.

At the local level, the City of Houston is facing a $130 million budget shortfall for FY 2012 beginning July 1. In order to close its budget deficit for the current fiscal year, the City drew down its fund balances to the 5% statutory minimum. 90% of the City budget is personnel costs. Next fiscal year, there is really no other place to cut than personnel -- i.e. municipal employees, police officers and firefighters. The City estimates that 2,300 employees could be laid off.

Elected officials are facing a Hobson's choice -- e.g. a free choice in which only one option is offered. The only choice voters are offering is cut the budget and shrink the size of government; voters emphatically stated in the 2010 elections that raising taxes is not an option. However, when you shrink the size of government, you are laying off teachers, police officers and firefighters, among others.

It has been happening across the country. According to the March 5 Wall St. Journal, "States have cut 82,000 jobs since their payrolls peaked in August 2008. Localities have eliminated 377,000 jobs since their high point in September 2008."

Layoffs now loom in Texas for state and local government employees. That is what the voters asked for. Now we will see if it is what they want.