AUSTIN, Tex. - Gov. Ann Richards of Texas yesterday outlined a $68 billion biennial budget that would avoid tax increases while funding a 5% teacher pay raise by cutting waste.
In her midday state of the state speech, Richards said the state's economic rebound should continue as the benefits of free trade with Mexico are realized.
However, the governor warned of political and economic consequences if the Legislature does not meet a June 1 deadline to draft a constitutional school funding system. The Texas Supreme Court has said it will cut off funding for the state's 1,054 school districts, effectively closing the schools, if the Legislature does not meet the deadline.
"If that happens, I cannot imagine an excuse or explanation that would satisfy Texans in any district of this state," she said. "And the reaction of any businesses that are considering Texas for relocation or expansion would be devastating."
In detailing her fiscal 1994-95 budget plan, the governor proposed $ 300 million in new funding to assure a 5% across-the-board raise for teachers in every district. Another $18.8 million would be budgeted to assure every teacher had medical coverage.
Noting that the Legislature included funds in 1991 for raises that were never implemented, Richards proposed mandating them if a district accepts the money.
"We can talk about quality and excellence until the world looks level, but the only way we are going to get the best schools is to get and keep the best teachers," she said.
Even though the governor is backing higher teachers salaries, her budget does not advocate a general increase in funding for local schools. Because none of the legislative school finance proposals include; enough funding, bond lawyers and financial advisers have warned that the plan could force local districts to raise property taxes to meet the needs of growing enrollment.
As early as today, the Texas Senate is expected to vote on two proposed constitutional amendments that would ask voters to approve a controversial wealth-sharing school finance plan. Last November, lawmakers failed to adopt the same plan in a special session. As in the past, the so-called Robin Hood plan, which would shift tens of millions of dollars from rich to poor districts, faces opposition from Republicans in the Texas House.
The governor yesterday called on lawmakers to take quick action. "The people who sent us here want leadership, not partisanship," she said.
Overall, the governor's budget would provide increased spending in few areas that are not already supported under legislative spending proposals.
As an example, Richards' plan would increase health and human services spending by $805.9 million in fiscal years 1994-95. It would also provide access for health coverage to all Texans and spend $50 million on innoculations for school children.
"It is incredible to me that we have found the money to innoculate cattle, but not the money to innoculate children." she said.
One of the single largest increases under her plan comes in the area of law enforcement and prisons. Richards is calling for $818 million in new spending in that area, in time for the state's opening next year of some of the facilities funded under a $2 billion bond-financed instruction program.
Although not mentioned in her address, the state expects to continue issuing an estimated $500 million in the next 18 months to two years to finance new prisons.
State budget writers have warned that the cost of operating the 25,300-bed prison expansion Texas expects to finish by the end of the decade could mean similar increases in correction spending every two years.
Richards' budget plan, which must be approved by lawmakers, counts on natural revenue growth of $1.8 billion during the biennium. The governor has estimated that the state would realize at least $750 million of savings in her budget.
Meanwhile, Texas Comptroller John Sharp is scheduled today to unveil a list of proposals designed to save the state an estimated $4.5 billion by consolidating agencies and seeking cost-saving efficiencies.
During her 20-minute speech, the governor said that neither she nor legislative leaders expect her new budget to require new or higher taxes.
Reflecting on her first two years in office, Richards noted that the state faced economic adversity in 1991 but today is leading the nation's recovery.
"Last year we created more new jobs than any other state in the union - one out of every three in the country," she said. Richards predicted that the growth, the most robust since the state's oil industry collapsed in 1986, will continue as the benefits of free trade with Mexico become apparent.
"This state has all the gears engaged again, and we are about to pop the clutch and put it into overdrive," she said of Mexican trade.
