Grading Texas

If you haven’t voted yet, please read Bob Garrett’s Dallas Morning News article linked at the bottom of this post. It makes clearer than anything else I have read so far that thousands of school teachers and other public employees WILL lose their jobs if Gov. Rick Perry and the current legislative leadership are still in charge when the Legislature tackles the huge revenue shortfall next year.

Despite Perry’s best efforts to downplay the severity of the crisis, experts now say the shortfall could be as high as $25 billion. And with Perry flatly ruling out any tax increase, experts say a hole that huge – even after tapping into the state’s Rainy Day fund simply can’t be closed without laying off “hundreds if not thousands of state workers and public university employees.”

They also warn that state funding of the public schools also will likely be cut, along with the jobs of many teachers and other public education employees. Don’t take my word for this. Read the article by one of the Capitol press corps’ more capable and budgetsavvy reporters.

Meanwhile, university tuition is likely to be raised again, student financial aid cut and who knows what may happen to health care premiums and benefits for teachers and other public workers who don’t lose their jobs.

Perry may not be solely responsible for the crisis, but he certainly has contributed to the problem with shortsighted policies designed to win his multiple reelections rather than put Texas on a sound financial track. During his last reelection campaign four years ago, he came up with a scheme to cut school property taxes without fully paying for them. That illadvised plan has been a disaster for school district budgets and, as the Dallas News article points out, is contributing to the state’s fiscal crisis now.

Ultimately, the buck stops in the governor’s office, and Perry has been there for 10 years, distinguished mostly for political favors to wealthy contributors and redmeat overtures to conservative extremists.

Now, in the midst of a major crisis, Perry’s simpleton answer is to cut, cut, cut and the budgetary problem – which he claims is overblown – will go away. Remember how Perry has bragged that Texas is better off than most other states, especially California? Well, folks, this article points out that Texas’ anticipated budgetary gap “is now proportionately larger than the deficit that California recently closed.”

Perry, who has boycotted newspaper editorial board interviews because he doesn’t want to answer tough budgetary questions, will continue to dance around the issue, bragging about the necessity of creating jobs and a favorable economic climate. The sad truth, however, is that highpaying jobs soon will disappear from our state without a realistic budgetary policy that includes an adequate and balanced revenue stream for our public schools, statesupported universities and other critical public programs.

Perry’s governorship has become a disaster. The only way to begin recovering from this disaster is with new leadership in the governor’s office, backed by state legislators willing to put stewardship ahead of demagoguery.

http://www.dentonrc.com/sharedcontent/dws/news/texassouthwest/legislature/stories/DNbudgetmess_24tex.ART.State.Edition1.33365dc.html

Judging from a call to the office this morning, there is a misperception among some educators and retirees that Gov. Rick Perry and his appointees on the Teacher Retirement System board have been “cleared” of allegations that the pension fund has been abused to benefit some of the governor’s major political donors.

It is true that no one has been prosecuted. But the ethical propriety of Perry’s TRS appointees disregarding the advice of investment professionals to direct business to investment firms run by Perry donors hasn’t been thoroughly vetted. And, the extent of the risk to educators’ pensions is still unknown.

The allegations were raised in a memo by a TRS administratorturnedwhistleblower. That memo was provided to Democratic candidate Bill White, who publicly released it earlier this week.

TRS says it has been cleared of wrongdoing by an “independent investigation,” but that alleged “investigation” was a sham. It was conducted by Roel Campos, whose Washingtonbased private equity law firm had briefly served as TRS counsel in 2008. That relationship ended after Attorney General Greg Abbott (Rick Perry’s Republican comradeinarms, no less) raised concerns about potential conflicts of interest between TRS and some of the law firm’s investment clients.

If that conflict was enough to end Campos’ previous employment by TRS, how in the world could he be considered “independent” enough to investigate the whistleblower’s allegations?

The whistleblower has raised some serious concerns, and they must be addressed because they pose critical questions about the Perry administration’s stewardship of a multibilliondollar fund of crucial importance to teachers and retirees. It is the main or only source of retirement income for many Texas educators, most of whom don’t qualify for Social Security.

It should not be misused as a political slush fund to help Perry reward his political donors, one of his frequent pursuits as governor.

The TRS fund took a big hit during the recent financial market meltdown, and we may never know how much of that plunge could be attributed to outside economic forces or to politically induced mismanagement by Perry’s TRS appointees.

Bill White is talking a lot about the TRS these days, and educators and retired educators should pay attention to what he has to say.

Click on this link to read a discussion of the TRS issue, Perry’s cronyism and his paytoplay attitude by members of The Dallas Morning News editorial board:

http://dallasmorningviewsblog.dallasnews.com/archives/2010/10/govperryandt.html

Teachers and retirees, Gov. Perry may have a deal for you digging into your hardearned pensions to help build more roll roads for Texas.

In his Burkablog, linked below, Texas Monthly’s Paul Burka reminds us that Perry has entertained that idea in the past. The Teacher Retirement System board rejected it then, but as Burka also points out, Perry has been known to pressure reluctant appointees – or replace them – in order to get his way with other agencies. And, as a whistleblower pointed out in a memo made public by Democratic gubernatorial candidate Bill White this week, the TRS board (all Perry appointees) is very susceptible to political pressure.

Toll roads are dicey propositions that could really harm the financial integrity of the TRS fund. What’s more, toll roads are very unpopular with many Texans. But, remember, Perry likes them, and they were key components of his widely hated and allegedly deceased Trans Texas Corridor.

Depending on who wins this election, maybe the Trans Texas Corridor will rise again – on the backs of educators and retirees.

In case you are still catching up on the TRS story, the whistleblower, a former TRS manager, said in his memo that Perry’s appointees on the TRS board had pressured TRS managers to make potentially risky investments with companies whose executives had given Perry large political contributions. TRS claimed an external “investigation” had cleared the agency of wrongdoing.

In his blog, Burka also notes that the alleged “investigation,” conducted by a lawyer with potential TRS conflicts of his own, was a sham.

http://www.texasmonthly.com/blogs/burkablog/?p=8171

To no one’s surprise, Gov. Rick Perry was quick to dismiss challenger Bill White’s allegations that Perry’s administration has been abusing the Teacher Retirement System fund to benefit some of the governor’s major political donors – against the advice of investment experts and at the potential risk to teacher pensions.

No, Rick Perry is not going to acknowledge that he has a payforplay attitude toward state government, even though White’s allegations are backed up by a TRS whistleblower’s memo and follow on the heels of an independent investigation by The Dallas Morning News of taxpayerfunded technology grants given to companies in which other Perry contributors have been involved.

Over the years, Perry also has been caught making major appointments of interest to big contributors either just before or just after receiving large political donations from the same contributors. Just coincidental, or that is always his story.

Now – and also to no one’s surprise – the TRS board has circled the wagons in Perry’s defense. They all are his appointees, after all, and an election is on top of us. Early voting already has started. TRS claimed the allegations raised by White and the whistleblower all were examined last year by an “independent” investigator, who found no problem.

That alleged “independent” investigator, however, was not so independent. He was a former Securities and Exchange commissioner whose law firm has represented clients who might benefit from TRS funding. The state auditor and the attorney general’s office reviewed his report, but it isn’t clear how thorough their reviews were.

Ultimately, the bottom line for educators and retired educators is whether they can trust Perry and his appointees to manage the TRS fund for their maximum benefit, not as a favor to the governor’s friends. Given Perry’s political favoritism and his dismal record on teacher pay and overall education funding, I don’t know why they would.

Teachers are underpaid (34th in the country in average pay), and school districts are struggling with budgetary problems that will worsen if Perry gets to impose the deep spending cuts he has in mind for next year.

Teachers and retirees know how important the TRS fund is. For many, it is their only or main source of retirement income because most Texas teachers don’t get Social Security, thanks to a federal law that needs changing.

Educators can fight that federal law another day. But they can get Perry’s hands off their TRS pensions now.

http://www.statesman.com/news/texaspolitics/teacherretirementsystemdeniesallegationsofpoliticalinfluence981449.html