LBB: Budget Kills 335,000 Jobs

Senate Finance Chair Ogden: The last guard against catastrophic cuts?

It's official: House Bill 1, the draft state budget for the next two years, will kill almost 150,000 private sector jobs.

This morning the Legislative Budget Board released its Dynamic Economic Impact Statement for the committee substitute for House Bill 1, the House draft budget. The figures are catastrophic. By 2013, the analysis shows unemployment rising by 2.3%. The budget slashes will cut the gross state product by $19 billion in 2005 dollars.

What may give the anti-tax, anti-spend crew pause is that the cuts will mean the loss of 146,457 private sector jobs, and $15.2 billion in disposable personal income. That's right: Cutting the public sector economy will have an impact on the private sector. Whodathunk?

The fact that the LBB analysis shows that the proposed budget will kill off 188,787 public sector jobs by 2013 seems to be an irrelevancy to conservatives. The Republican party is now so totally in the sway of anti-government ideologues like Grover Norquist that the idea of government lay-offs gets too many members all giddy.

Even former moderate Speaker Joe Straus has performed a monumental act of sticking his fingers in his ears this morning by releasing a statement disregarding the LBB's dire warnings. He wrote, "I question the validity of the assumption that requiring government to live within its means will lead to a downturn in the economy – in fact, the opposite is true."

However, Straus et al have yet to provide solid answers to how and how long it will take for the private sector to back fill these lost jobs. As Paul Krugman pointed out in his most recent column, European nations that have pushed on with such devastating cuts are facing further economic collapse. The reality, he wrote, is that "slashing spending in the face of high unemployment is a mistake."

How big an impact will the job-cutting HB1 have on unemployment in Texas?

The situation gets even worse if you combine the numbers for HB4, which retroactively rips $854 million out of the current biennial budget.

There are already obvious fractures showing between the House, Senate and Governor's office with this budget process. Recently Senate Finance Committee Chair Steve Ogden, R-Bryan, has defied expectation and come out as the biggest advocate for the smallest cuts. With this analysis in his hands, and businesses dependent on public contracts probably blanching in fear at these cuts, the likelihood of HB1 passing the Senate is shrinking from slim to none.