Bad decisions on hurricane rebuilding will force cuts in critical Texas services

The implications of screwing up the Hurricane Ike recovery effort by pursuing the course outlined in the Texas draft recovery plan grew a lot bleaker this week.

Texas Comptroller Susan Combs released a $77.1 billion revenue estimate that was $9.1 billion less than the $86.2 billion estimate of 2007. To avoid cutting schools, health care and other vital state services the Texas Legislature must somehow close this budget gap. Short of raising taxes (highly unlikely) the only revenue available is in the state’s Rainy Day Fund that has (or will have) $9 billion.

The problem is that the fund is the only available money, besides the federal disaster funds, the state has to address any critical unmet needs for Hurricane rebuilding. There is already a huge outcry on the Gulf Coast for the Rainy Day funds.

So how on earth can the State of Texas turn over authority to local Councils of Government (COGs) to determine how best to use the $1.3 billion in HUD CDBG disaster funds? What’s to stop the COGs from engaging in the sort of pork barrel spending I have been warning about, diverting the CDBG funds to totally discretionary and low level priorities as they did with Hurricane Rita recovery funds. Nothing. They know that the political pressure from Gulf residents will force the Legislature to prioritize the Texas Rainy Day to make up for the truly critical hurricane rebuilding needs the COGs fail to fund?

What is the Governor thinking? Does no one in the Texas Legislature see the consequences of the maladministration of the $1.3 billion in federal funds? For every dollar directed away from the critical hurricane rebuilding priority, returning families to their homes, Texas will have to spend a dollar from the Rainy Day fund, forcing the Legislature to make cuts in schools, public health and critical state services.

This is the path that Governor Perry and the Legislature have set the state on by failing to ensure that the federal disaster relief funds are responsibly used. It is not too late to exercise leadership to ensure this does not happen, but time is running out.