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Archive for the tag “budgets”

EDUCATION TEXAS- A TOTAL DISASTER

Just when I thought no one could outspend Obama, this article was sent to me by a daughter who gets a newspaper. Living in rural Texas limits ones access to daily newsprint. Can anyone with any common sense explain to me the logic associated with this unbelievable fiasco, other than stupidity? The Texas education program is beyond stupid. Our Governor, legislature and the Texas Education Agency have created so many unfunded programs to require more teachers, then cut the budgets so success is impossible. I am now convinced that Washington D.C. may have more incompetents but Austin Texas has to have more per capita. I hope this reaches as many Texans as possible. CB

Texas Taxpayers Finance Formula One Auto Races as Schools Dismiss Teachers

By Darrell Preston and Aaron Kuriloff

Texas, which may balance its budget by firing thousands of teachers, plans to commit $25 million in state funds to Formula One auto racing each year for a decade.

Four years after motorsports’ most popular series left the U.S., Texas investors including Clear Channel Communications Inc. co-founder B.J. “Red” McCombs are building a 3.4-mile (5.5-kilometer) track to bring the event to Austin. Comptroller Susan Combs has agreed to pay $25 million for races through 2022, a subsidy questioned by critics and lawmakers as the state cuts costs to close an estimated $15 billion two-year deficit.

“I don’t understand why 25 people in Austin could not put up $1 million each if they thought this was a good opportunity instead of the state making a $25 million commitment,” said Senator Dan Patrick, a Houston Republican. “The developers should find the money through private sources.”

As many as 100,000 teachers in Texas may be fired because of spending cuts to cope with the state’s budget crisis, according to Moak Casey & Associates, an Austin-based education consultant. For $25 million a year, the state could pay more than 500 teachers an average salary of $48,000.

“I have to wonder why the state of Texas is all over funding for this racetrack and not the school-funding crisis,” said Ewa Siwak, 44, who teaches German in the Austin Independent School District and whose job at Bowie High School is being cut. “Tax dollars for education should be a higher priority.”

No Traction

Formula One races have failed to gain traction previously in the U.S. Since the 1970s, the series has been hosted by Long Beach, California, as well as Las Vegas, Detroit, Dallas, Phoenix and, most recently, Indianapolis. The races there ended in 2007 on declining attendance.

With 20 million Texans within 250 miles of Austin and a growing Formula One fan base in Mexico, the city’s annual race will be successful, Steve Sexton, president of track developer Circuit of the Americas LLC, said in a telephone interview.

By building the Circuit of the Americas track, backers aim to attract automakers such as Fiat SpA (F)’s Ferrari Group, Renault SA (RNO) and Daimler AG (DAI)’s Mercedes that compete in Catalonia, Shanghai and Istanbul. Racing-team owners include U.K. billionaire Richard Branson and Indian liquor magnate Vijay Mallya. Races from Montreal to Sao Paulo draw thousands of fans, including those paying $1,200 apiece for a seat in Monaco’s grandstands.

Each race in Austin is projected to generate enough tax revenue to recoup the $25 million from a state Event Trust Fund pool, according to Allen Spelce, a spokesman for Combs, a Republican. He said the plan calls for putting the $25 million into a revolving account for paying annual event-related costs.

$250 Million Subsidy

If the financing works as projected, the decision will use $250 million in state tax revenue for the races over 10 years.

“With places struggling, spending that much money on an essentially one-off event is tough to do,” said Michael Cramer, a former president of baseball’s Texas Rangers and hockey’s Dallas Stars who runs the sports and media program at the University of Texas at Austin. “It’s a very high cost of entry.”

Texas, like other states cutting budgets for schools, nursing homes and basic services, uses economic-development spending to bring in jobs and seed growth. That often involves giving up tax revenue generated by a project to pay part of the cost. New Jersey is providing $200 million of tax-increment financing to help develop the American Dream in the Meadowlands, which will be the biggest mall in the U.S. when it opens.

“I’m not sure of the wisdom of using tax dollars to fund a racetrack,” said Siwak, the Austin teacher. “They’re giving so much tax dollars away I don’t think they could make it up with the racetrack.”

Economic Outlook

Combs’s office estimates a Formula One race in Austin next year will spur $300 million of spending, Spelce said in an e- mailed statement. Construction of the $242 million track, which has begun, is projected to add 1,300 temporary jobs and pump $400 million into the economy. The venue will seat 120,000 fans.

The state isn’t investing in the track development, Spelce said in the e-mail. He said the Legislature authorized the use of the money from the Major Events Trust Fund in 2009.

“The funding generated by the activity offsets the state’s investment,” Spelce said. “It is important that the state continue to generate new economic activity to ensure that Texas continues to grow.”

Formula One racing attracts the wealthy who sponsor teams and draws fans from around the world, said Zak Brown, chief executive officer of Just Marketing Inc., an agency based in Zionsville, Indiana. JMI, as it’s known, focuses on motorsports.

Sport for Wealthy

“It’s a lifestyle of the rich and famous,” Brown said in a telephone interview. “The whole industry has a lot of wealth around it, a lot of politics.”

The cost of holding races has made it too expensive for sponsors without a public subsidy, said Mark Cipolloni, president of AutoRacing1 Inc. in Robbinsville, New Jersey. The company runs a website that covers motorsports.

“It isn’t cost-effective for an independent race,” Cipolloni said. “Most races in major cities wouldn’t be held without public support.”

The state’s $25 million is being paid to London-based Formula One Management Ltd. to hold the race in Austin, Sexton said. Formula One, owned by London-based CVC Capital Partners Ltd., a private-equity firm, is run by Bernie Ecclestone, the chief executive officer of the series.

“It’s going to Mr. Ecclestone and Formula One to get them to bring the event here,” Sexton said.

Outside Intended Use

Paying such a fee goes beyond the intended use of the state fund, which was set up to support bringing annual events to Texas by rebating increased taxes they generate to cover costs including security and traffic control, said Richard Viktorin, an accountant with Audits in the Public Interest. The Austin- based group opposes government support for the races.

In the past, the event fund has been used to subsidize professional football’s Super Bowl championship game, college basketball’s Final Four tournament and business meetings such as a Chick-fil-A Inc. convention.

“It’s off-balance-sheet financing for a rich man’s sport,” Viktorin said. Combs is “supposed to be a fiscal officer for the state. She’s not controlling that fund.”

Formula One participants and sponsors have wanted to return to the U.S. since 2007, when the last race was run in Indianapolis, Ecclestone said in a telephone interview. Indianapolis began hosting the event in 2000. Interest waned after defective tires led most entrants to withdraw in 2005.

U.S. Venue

“No one wanted to hold it,” Ecclestone said, until the Austin promoters stepped in. “Carmakers and team sponsors are also keen to have a race in the U.S. to help leverage their backing of teams.”

Formula One’s popularity has declined in the U.S., partly because there haven’t been any races in the country in recent years and partly from a lack of successful American drivers since Eddie Cheever and Mario Andretti, JMI’s Brown said.

“It’s moved around,” said Brown, who praised the Austin track’s design. “There was a 10-year period where there was no Grand Prix,” or Formula One race, in the U.S, he said.

The Austin event is expected to benefit from its proximity to Mexico and South America, where the series has grown in popularity, said Ecclestone. Austin’s city government also may invest $4 million a year in tax revenue to facilitate the event, the Austin-American Statesman reported. The city hasn’t been asked to provide any incentives, said Matt Curtis, a spokesman for Mayor Lee Leffingwell.

Tourism ‘Booster’

“It’s going to be a major booster in our convention and tourism industry,” Curtis said. The “return is very significant.”

Formula One races won’t be the track’s only use. Developers have booked international championship motorcycle races, called MotoGP, starting in 2013, Sexton said. He said they’re also trying to bring in concerts, conferences and other events.

Austin and the state are unlikely to recover their investment directly, Cipolloni said. However, the race will expose the city to a wide audience of tourists and executives that could help recruit companies and create jobs, he said.

“They won’t collect tax money equal to the $25 million” from the state, Cipolloni said. “It’s just a way to get exposure for the city.”

Sexton, a former president of Churchill Downs Inc. (CHDN)’s horse track in Louisville, Kentucky, which hosts the Kentucky Derby, agreed that events at the Austin circuit will do more than just generate new tax revenue.

“It will bring in an affluent audience that has never been to the city,” Sexton said. “It should have a substantial economic impact.”

To contact the reporters on this story: Darrell Preston in Dallas at dpreston@bloomberg.net; Aaron Kuriloff in New York at akuriloff@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

Thanks Lisa

RESPONSE FROM MY STATE REPRESENTATIVE- WAYNE CHRISTIAN

When I posted the article on Texas Education on Monday March 14th and it was printed in the Sabine County Reporter, I promised I would share any response from my State Representative or State Senator if received. The following is an “E” message on State letterhead from Mr. Christian today. Other than misspelling my name and some other typos it explains his position on education that you can review. I sincerely appreciate the response and I hope if Mr. Christian, or someone on his staff, will read my second posting on March 21st and another I am drafting for March 28th. The Sabine County Reporter printed the March 21st article in this weeks edition. I would like to thank the Reporter for sharing my research and facts with local citizens and will continue to print my work.

The intent of my work is not to criticize funding. I think it is time for someone in authority insist that a review is mandated to investigate the variation of funding and determine if every one of Texas 1265 school districts deserve to have funding reduced equally? I do not think that any one in Austin has the foggiest idea if every school district is equally screwed up. Punishing the good school districts with the same formula as the bad ones makes no “common sense” to me. Please see if you agree and send me your comments. I do not plan to stop my reviews as long as I have one breath left in the 80-year-old body. I care about the children of America on especially the ones in Texas.   C Brewer

March 23, 2011

Dear Mr. Brwer,

Thank you for taking the time to write to me. I share your belief that education of our children is of primary importance to the future of the state of Texas. Our Texas Constitution mandates it as a  priority of utmost importance of state government.  As your state representative, I have consistently upheld that principle for more than a decade. My record reflects that I have continually supported the  school funding measures and salary increases advocated by teachers and educational leaders in my district. My priorities have not changed and I continue to place education funding at the top of my list of concerns in keeping with the will of my constituents.

With all that is being reported and discussed about the revenue shortfall in Texas, I understand your concerns about the impact of anticipated budget cuts to funding for our schools. To further clarify the challenge before the Legislature in how to spend the dollars that are available, I want to share some information that you may not have previously seen.  As the statistics below will demonstrate, Texas has consistently put education first and increased the overall percentage and dollar amount spent on education. In the current biennium, education was funded at 60.7 % of the entire budget. The Comptroller has reported that Texas public education spending nearly doubled during the last decade, increasing from $28 billion to nearly $55 billion and spending per pupil rose by 63% percent to almost $12,000 per pupil.  If the Texas public education system were a private company it would be the fifth largest company in the world by employee count, employing 646,815 people during the 2008 fiscal year. While spending has increased for education, the teacher to non-teacher ratio has steadily risen from 5:1 in 1975 to 1:1 today. These statistics and the accompanying charts show that Texas has constantly put education first and has increased funding year after year above and beyond inflation and increased enrollment numbers.

During the decades when the Texas’ economy was booming, the Legislature invested the largest portion of the budget in public education. I have included some graphs that illustrate what I mean. However revenues have fallen due to the national economic downturn and while it appears that economic recovery is taking place in Texas, it is only occurring at about 2-3% annually which means we cannot expect to be back where we were until at least 2014. Based on the Comptroller’s report, the estimated shortfall indicates that we will have $18-28B less to spend for the 2012-2013 biennium.

So what are the options for dealing with this shortfall? The reality is that Texas cannot spend more than it expects to bring in. Our wise founders made sure of that by writing it into our Constitution that, unlike the federal government, Texas must balance her budget. Some are in favor of draining the Rainy Day Fund as a ready solution. However, spending down the entire fund of $9.4B will not “fix” the problem since it only covers about 1/3 of the shortfall and would leave us with no reserve. We would be in the same fiscal hole next budget cycle if we do not fix the underlying problem: We are spending more than we have. I  will consider utilizing some portion of the Rainy Day Fund to pay off non-recurring expenses, but  again  this does not solve the problem. So the most responsible action is to first focus on the core responsibilities and functions of government, become more efficient and cut waste. All state funded programs, not just education, will experience budget reductions. In my own office, I have cut the budget by 10% immediately and by 14% after the legislative session and eliminated one full time staff position.  Public schools must make the same tough decisions. I am of the firm belief that classroom instruction must be protected, while overgrown bureaucracy and inefficiency must be dealt with.

I agree with my constituents that there are many state programs that should be downsized before public education.  I have been trumpeting this message for some time as the budget for health and human services (30% of the total  budget) continues to increase. It is projected that the implementation of President Obama’s health care plan will grow Texas Medicaid rolls by 60% increasing the budget for health and human services so that it approaches or even surpasses that of education.  Much of the federal funding Texas receives for programs related to health and  human services, environmental regulation, highways and even education come with strings attached that force expansion of government and limit efforts to prioritize spending in accordance with what constituents and local officials say they want. Logical steps to restrain growth of the government in these areas are blocked because of the intrusion by the  federal government. I am standing against, and urging my colleagues to resist, the federal unfunded mandates which siphon off resources that otherwise could be used for Texas’ priorities, starting with education. This is a fundamental issue that must be addressed if  we are to manage our budget in accordance with Texan priorities.

Members of the Appropriations Committee have the responsibility to establish the amounts that each state agency will be allocated in the Appropriations bill.  Although I have not been assigned to serve on the Appropriations Committee, I will work with the committee members throughout the process, debate and vote on the complete Appropriations package along with my colleagues when it passes out of Committee to the floor of the House.

Fiscal responsibility makes for hard choices now, but down the road, Texas will benefit in economic stability and growth. We have a good foundation to build upon. The Comptroller reported on March 4, 2011, that  significant economic indicators, including job growth and  sales tax collections, signal  that the Texas economy has emerged from the recent recession. More people are moving to Texas than any other state. Our Gross State Product increased by 3.4 percent in 2010 outpacing that of the nation which increased by 2.8 percent.  Ultimately, fostering economic recovery and growth in Texas through sound fiscal policy is the best way to ensure that Texas schools are well-funded and equipped to provide an excellent education for the children of Texas.

Thank you again for writing me about your concerns. If I or my staff can be of assistance, please feel free to contact my office again.

Sincerely,

Wayne Christian

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COMMENTS:

tadpole75948
Mar 23, 2011 @ 19:54:45 [Edit]

Your blog —
“According to the latest figures I have obtained, Texas spends an average of $7561.00 per student annually to provide K-12 education.”

The Honorable Wayne Christian —-
“The Comptroller has reported that Texas public education spending nearly doubled during the last decade, increasing from $28 billion to nearly $55 billion and spending per pupil rose by 63% percent to almost $12,000 per pupil.”

Is it important to know which per student number is correct?

By increasing the spending from $28 billion to nearly $55 billion, did the quality of education for our kids double?

Reply

  • cbeck75948
    Mar 23, 2011 @ 20:30:56 [Edit]

    You are correct but that is a tricky figure. Some Texas school districts get over $12,000 per student most get less than $5000. One actually gets $13,121 according to the state. Hemphill got $4806 and Pineland got $4596 according to the latest WADA figures I can find. His $12,000 average is hogwash. I will publish some of the latest WADA figures in an article to be posted on April 4th. By then I will have had time to check all of the numbers in his letter. The passage of Texas House Bill 3, adding a fourth year of math and science in 2009 will increase the drop out rates of students that will allow the average to go up as there will be a lot fewer students. I am working on that bruhaha now. I doubt the Texas Legislature even know what the bill they passed will cause, I am certain they will not admit it. Money is not the answer, the system is broke and they do not even know it in Austin. The Universities have created the mess as the Legislature will not listen to the K-12 folks who know what needs to be done.

    Reply

Lisa Felske
Mar 24, 2011 @ 11:13:24 [Edit]

Mr. Christian obtained his data from the Texas Conservative Coalition Research Institute (TCCRI). I have major issues with this data. The staffing ratios in 1975 compared to today are not apples to apples comparisons. In 1975, the Texas Education Agency did not code many non-instructional positions, so people like custodians, bus drivers, school nurses, librarians and cafeteria workers were not included. Also not included are the many staff needed to comply federal regulations for Special Education students. Federal laws for Special Eduation were not enacted until 1975, and district now employ non-instructional personnel such as speech therapists and occupational therapists. Districts also now have to employ testing coordinators to comply with state testing (mandated by Texas but never funded). Mr. Christian’s “research” is highly questionable.

The assertion that Texas public schools receive $12,000 per pupil funding is just blantantly not true. It is true that a few districts do get that much funding (for reasons that are impossible to decipher), but over 1250 districts do not. Perhaps he is using data from expenditures in the Comptroller’s FAST report. Those numbers are for total expenditures, which includes capital expenditure (football stadiums) and debt service (payment on past stadiums). Maybe it is time to talk about cutting high school football instead of school nurses (who are non-instructional employees).

SEE IF YOU FEEL STIMULATED WITH THESE FACTS?

Who Got Stimulated? (A review of this weeks activities by our Chief Executive)

Barack Hussein Obama, is intent on increasing the federal  taxes, of everyone who actually pay them, (about 47 percent of the population) in January, by way of letting the Bush-era tax reductions expire. 

His administration has announced several “band-aid’s” to help reduce our growing debt.

First, President Obama ordered a freeze on bonuses for some 3,000 of his high-paid political appointees. Then he announced a freeze on the wages of all federal workers for the next two years.

One Social Security administrator summed up the reaction of her fellow federal union workers: “That’s why Obama’s ratings are below Bush’s, and that’s hard to be unless you’re Osama bin Laden. I can’t wait until I retire.”

Well, given the fact that federal bureaucrats are now endowed with grossly disproportionate wages and benefits, one can understand why retirement remains attractive for them. On the other hand, millions of private sector citizens will be working well beyond retirement age in order to make ends meet, especially given the increased tax burdens they’ll likely incur in the future to pay off Obama’s deficit.

Let’s review the most recent comparison’s of statistical data: 

Compared to more productive private sector employees, whose income is confiscated to pay government wages and benefits, hourly government workers are paid 57 percent more than those in the private sector for comparable jobs ($28.64/hour vs. $18.27/hour).

Salaried bureaucrats enjoy average annual wages of $78,901, while those in the private sector average $50,111, and the number of bureaucrats collecting more than $150,000 a year has doubled since Obama took office.  (That’s you my son.)

When benefits such as taxpayer-funded contributions to pensions are included, government bureaucrats end up with 85 percent more compensation than their private sector comparables.

On top of that disparity, bureaucrat jobs are virtually tenured, both recession proof and unaffected by a dearth of productivity. Benjamin Franklin once famously said, “Nothing can be said to be certain, except death and taxes.” Today, however, you can add government jobs to the short list of guarantees.

Notably, Obama did not order a freeze on government hiring, and I can assure you that the number of exemptions for government agency wage freezes will eventually equal the number of government agencies. Additionally, Obama didn’t freeze promotions, meaning that any federal worker can receive a de facto pay raise by “promotion” into the next incremental GSA scale.

Since the beginning of the current recession, private sector employment is down 6.8 percent. On the other hand, Obama has used taxpayer funds and debt on future generations, his so-called “recovery program,” to grow the ranks of central government bureaucrats by more than 10 percent in the same time period.

Of course, Obama’s wage-freeze fails to put any noticeable dent into his accumulating $1,000,000,000,000-plus deficits. Taxes, he says, must be increased to do that.

Once again, let’s review.

Like any devoted Socialist, Obama’s objective is to break the back of free enterprise, in this case, with unbearable deficits. When challenged about his motives, Obama invariably claims that he “inherited this mess” from the Bush administration.

However, the Executive Branch does not set the budget. Congress does. And from the ’09 budget forward, budget deficits have increased greatly. 

I realize this is not new information but it bears repeating.  

 Democrats have controlled Congress since January 2007, about the time the housing market collapse began. Thus, Democrats controlled the budgets for FY2008 and FY2009 as they did with FY2010 and FY2011.

Obama Deficits Chart

For FY2008 Democrats compromised with President Bush on spending. However, for FY2009, Nancy Pelosi and Harry Reid bypassed the Bush administration by way of continuing resolutions until Barack Obama took office.

Again, for the record, Obama was a member of the Senate majority in 2007 and 2008, and he voted for those spending bills.

The last budget deficit that Democrats “inherited” was FY 2007, the last of the Republican congressional budgets. That deficit was the lowest in five years, and it was the fourth straight decline in deficit spending. Thus, the only deficit Obama has inherited is that which he and his Democrat majorities generated.

Those pesky facts notwithstanding, a Republican majority is about to take over the House, and Republicans in the Senate seem to have found a spine,as indicated by Sen McConnel’s letter to Harry Reid regarding action on any legislation that doesn’t deal with the budget and the expiring taxation rates. 

If Republicans are serious about budget and deficit control, they should start by cutting their own bloated salaries and budgets. There is no greater sweetheart deal than being elected to our national legislature, where members of Congress are paid exorbitantly, and are eligible for lifetime benefits after “serving” for just five years — one term for Senators. If they are perpetually elected, as is the case with many members, they are eligible for almost 80 percent of their salary as a guaranteed annual pension.

Membership certainly has its privileges and term limit’s are sorely needed to remove those Un-professional politicians. 

If members of Congress don’t like the pay cuts, perhaps we can cut their time accordingly. Send them home more often, and see if a little of the reality outside the Beltway sinks in.

As Cal Thomas opined this week, “The Founders were keenly aware of the danger of a Congress divorced from the realities of the rest of the country. During the Constitutional Convention in 1787, Roger Sherman of Connecticut wrote, ‘Representatives ought to return home and mix with the people. By remaining at the seat of government, they would acquire the habits of the place, which might differ from those of their constituents.'”

If Republicans are really serious about the constitutional role of government, they should identify any and all taxes and expenditures not expressly authorized by our Constitution, and schedule them for termination. While they are at it, they should revoke congressional exemptions, and make themselves subject to the same laws and regulations they impose upon the rest of us. (Oh, and Mr. Speaker-to-be, sell Pelosi’s opulent Boeing 757, and refund the treasury.)

For his part, President  Obama lamented this week that he might have to delay his “holiday vacation” to Hawaii in order to get his tax-and-spend agenda through Congress. (How many golf outings and exotic vacations must this man take?)

Perhaps the President should take a tax lesson from John Kennedy, the father of the modern Democrat party: “A tax cut means higher family income and higher business profits and a balanced federal budget…. As the national income grows, the federal government will ultimately end up with more revenues. Prosperity is the real way to balance our budget. By lowering tax rates, by increasing jobs and income, we can expand tax revenues and finally bring our budget into balance.”

Indeed, tax reductions in each of the last five administrations have resulted in tax revenue increases to the fed’s coffers.

It’s past time to put Keynesain economic’s out to pasture and clean thr Donkey do off our boots.

_________________________________________________________________

This was forwarded by a friend, Ron, this morning and I felt obligated to put it on the blog ASAP. I do not know who wrote this but hopefully it wakes up more people to demand that Washington be cleaned out before we have to borrow from Chavez.  CWB

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