With state budget shortfall looming, will legislators roll the dice?

January 13, 2003

With state budget shortfall looming, will legislators roll the dice?
___By Ken Camp
___Texas Baptist Communications
___AUSTIN--An expected state budget shortfall of up to $12 billion could leave the Texas Legislature looking for funds in all the wrong places, according to representatives of the Texas Baptist Christian Life Commission.
___At the same time, issues related to insurance reform--particularly homeowners' insurance--likely will consume much of lawmakers' time and energy when the 78th legislative session convenes Jan. 14.
___State Comptroller Carole Keeton Strayhorn initially estimated a difference of at least $5 billion between available revenues and the amount needed to continue funding existing programs for fiscal 2004-2005. But when she was sworn into office Jan. 7, she said, "I now believe the shortfall will be significantly larger than earlier projections." Some lawmakers suggest the shortfall could be as much as $12 billion.
___The budget crunch is an open door to lobbyists presenting gambling expansion as a quick fix and could result in significant cuts to programs benefiting children and the poor, said Suzii Paynter, director of citizenship and public policy with the Christian Life Commission.
___With the Texas Lottery Commission under sunset review, gambling proponents will seek to increase revenues by introducing new forms of gambling under lottery laws, Paynter predicted. "There must be 40 ways they are looking at to expand gambling."
___Rep. Robert Puente, D-San Antonio, already has pre-filed HB209, a bill that would allow Texas to join a multi-state lottery.
___Racetrack casinos, Indian casinos and outright casino development--including a move to turn the Astrodome into the world's largest casino--are among the proposals gambling promoters are expected to pitch to lawmakers, said Weston Ware, legislative consultant with the CLC and Texans Against Gambling.
___"I believe we will be under a general siege on all fronts, with all forms of gambling legislation and all combinations of gambling," Ware said.
___Horse and dog track owners are expected to push for legislation allowing them to turn tracks into "racinos" with a variety of slot machines and video gambling machines near the pari-mutuel betting windows.
___Rather than using mini-casinos to prop up financially ailing racetracks, Ware observed, "the horse and dog tracks should be made to stand on their own four feet."
___Proposals to expand gambling in Texas were criticized in a Dec. 29 Dallas Morning News editorial under the headline, "A Bad Bet: More Legalized Gambling Won't Help Texas." The editorial stated: "Enough of the fool's gold. There's folly in the notion that expanded legalized gambling is a long-term panacea for budget problems."
___In addition to looking for revenue from gambling, lawmakers also will be looking for ways to cut budgets. Across-the-board cuts could be especially hard on social service agencies, Paynter said. "After the last session, their budgets already have been pared down."
___A further complication is that when agencies are evaluated, the analysis is based on the number served, without looking at who is not being served. "There's no comprehensive way to look at the long waiting lists of people who are not being served," Paynter said.
___Insurance reform is certain to be a major issue in the legislature, particularly after recent rate hikes in homeowners' insurance and threats by major carriers to leave Texas. Gov. Rick Perry has placed the homeowners' insurance crisis on "emergency" status, suspending the usual deadline rules.
___When it comes to products or services required by law--such as insurance--industries have a special responsibility to protect consumers' security, Paynter observed.
___"Texans pay premiums in a planned fashion to keep hardship at arms' length," she explained. "There is a serious breach of trust when the industry itself is the hardship.
___"The present crisis in Texas is alarming because it is an example of the chaos that erupts when the bedrock principle of checks and balances is eroded. Unfortunately, this scenario seems too ripe for repetition--an industry facing declining profits meets a regulatory system that has been peppered with loopholes and laxity."
___Lawmakers are likely to look at regulating the rates and underwriting guidelines for the Lloyd's companies, to which insurers have moved the vast majority of their homeowners' policies. Other legislation may prohibit the use of "credit-based scoring," where companies set premiums based on consumers' credit histories, and prevent insurers from blacklisting homeowners who file claims for black mold or water damage.
___"The voice of faithful people concerned for the well-being of citizens can call all parties to account for the breach in trust and for the revival of a vital process of checks and balances for the future," Paynter said.
___"The industry has suffered from hard blows and needs recovery. But that recovery needs to be crafted with a sense of responsibility to millions of Texas consumers. Regulators and elected officials speak best for Texas when they are able to negotiate from positions of strength that are not compromised by campaign debts and historic alliances with a troubled industry. Industry recovery doesn't have to be instant or at the expense of millions of Texans required by law to purchase insurance."
___A related issue centers on the escalating insurance costs faced by faith-based elder care facilities and other non-profit long-term care providers.
___"In just the last four years, Buckner Retirement Services has seen an increase in our insurance premiums of more than 1,000 percent. From 2001, our insurance costs doubled. This year, insurance premiums will consume nearly 10 percent of our 2002 Buckner budget," Buckner Baptist Benevolences President Ken Hall wrote last spring.
___Not-for-profit elder care providers will seek relief in the legislature, and they will ask for legislation that would protect from lawsuits the endowments of non-profit nursing care providers.
___Other anticipated legislative issues include:
___ Education. Lawmakers will explore ways to modify the public school finance system that requires wealthier school districts--those with a higher property tax base--to share their revenue with poorer districts.
___Pre-filed legislation also includes bills that would create a pilot voucher program for private school students; allow home-schooled students to participate in public school extracurricular activities; permit private school students to participate in University Interscholastic League events; mandate a one-minute period of silence in public schools; and display "In God We Trust" throughout public schools.
___ Abortion. A December report by the House Research Organization states: "Lawmakers may consider placing new restrictions on abortions, such as requiring women to view certain information and sign consent forms before a procedure could be performed. Proposals also may arise to require parental consent for abortions for minors, in addition to the parental notification now required."
___Rep. Frank Corte, R-San Antonio, has pre-filed a bill on informed consent. Under the proposed legislation, any woman considering an abortion would be required to review extensive information about fetal development, including viewing pictures of a baby at varying stages of gestation.
___ Children. Some lawmakers may seek additional funds for the Children's Health Insurance Program and Medicaid, to meet the cost of increased caseloads. At the same time, other legislators may seek to tighten eligibility requirements for the programs to cut costs.
___Other proposals are likely to center on children's mental health. One possible bill might expand the Texas Integrated Funding Initiative, a pilot program for children needing mental health services.
___ Immigration. One proposal would allow resident workers in the state to apply for a driver's license using a government-issued photo ID from outside the United States as proof of identity.
___Other potential legislation would focus on securing universal access to safe, clean water in colonias along the Texas/Mexico border; providing both primary and preventive health care to documented and undocumented workers; and ensuring that immigrant families have access to government-funded employment services, child care, transportation and English-as-a-second-language classes.
___ Campaign finance reform. The Texas Ethics Commission is subject to sunset review during this session. The Sunset Review Commission may consider giving the ethics body greater authority to investigate complaints, stiffen requirements for electronic campaign finance reporting, and share information with law enforcement agencies.
___Legislation could be introduced to prohibit judicial candidates from accepting campaign contributions from lawyers who may appear before them in court.

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