Where Spending Cuts Really Hurt (TX)

April 4, 2011

Debra Walker, a part-time home health aide, feels squeezed from all
directions. The property taxes on her southeast Houston home keep going
up, she spends more money to fill up her gas tank and she’s paying more
at the grocery store but coming home with fewer items.

She and
her retired husband’s annual household income of just more than $18,000
is barely enough to get by and not enough for them to afford health
insurance. The couple rely on public health clinics and Medicaid. But
Walker, 56, fears that looming state budget cuts could threaten those
services, leaving them without any health care options.

In the trade-off between taxes and government services, Walker feels as though her family is getting a poor bargain.

Her
frustration is echoed by many low-income families who don’t like the
decisions state lawmakers are making to shore up a budget shortfall of
up to $27 billion. Education, public health and Medicaid – services that
poor people depend on the most – all face major cuts.

Poor
families have reason to be concerned, according to a recent report by
the Center for Public Policy Priorities, a liberal-leaning think tank
based in Austin. They bear a disproportionate share of state and local
taxes compared with higher-income families, the rep ort said.

A
family earning $29,223 pays 14 percent of its income in taxes compared
to a family that earns $126,460 and pays 3 percent, the report shows.

“If
you’re talking about budget cuts, they are aimed at the services people
can’t pay for themselves,” said the center’s senior policy analyst,
Dick Lavine.

Texas has the nation’s fifth most-regressive tax
system, the report said. Based on figures from the state comptroller,
low-income families shoulder the heaviest burden in paying sales taxes,
the report said.

Concern for kids’ future

The Texas
Public Policy Foundation, a conservative-leaning think tank, argues
that the state’s tax system is fair and that calculating taxes as a
percentage of income is not a legitimate means of assessing the equity
of the system.

“When you look at percentage of income, you find
everything lower-income people buy is a higher percentage of their
income,” said Talmadge Heflin, director of the foundation’s Center for
Fiscal Policy and a former state representative. “If you look at who
pays the most as far as real dollars, the higher-income people will pay
more.”

Across the board, everyone is paying more taxes, Heflin said.

While
the Center for Public Policy Priorities advocates for a fairer tax
system based on ability to pay, the Public Policy Foundation supports
reducing the tax burden so that everyone keeps a greater portion of what
they earn.

But as policy wonks debate and lawmakers work to
balance the budget, many low-income families are becoming increasingly
worried about their children’s education. Public schools, for example,
could experience an $8 billion cut in funding for the next two years.
Man y school districts have begun laying off teachers and preparing to
cut programs.

Dolce Cantu of Deer Park has two children in
college and two young children, 2 and 4. Her 4-year-old daughter will be
ready for prekindergarten next school year, but there’s a chance the
program will be eliminated. Cantu said all children need the foundation
of a pre-K program to start their education.

Pay and hours cut

“With
all this budget-cutting and laying off teachers, I don’t know where she
will go,” said Cantu, who decided to be a stay-at-home mom two years
ago because child care was too expensive. “I will have to go back to
work to pay for private school if pre-K programs are cut.”

She wants to go back to being a substitute teacher, but that’s probably not an option because of budget cuts, she said.

Cantu
and her husband, a scaffold builder at a chemical plant, own their home
and