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By W. Gardner Selby July 8, 2011

State budget balanced without tax hike

Gov. Rick Perry promised the 2012-13 budget would balance without a tax increase.

He got that right.

The Republican-controlled Legislature passed a budget that spends $172 billion from state, federal and other sources over the two years, down 8 percent from 2010-11.

And it did so without increasing taxes, though for a moment we thought we'd stumbled across a tax singling out residents of the Rio Grande Valley.

A June 28 Texas Medical Association summary of Senate Bill 7, a health care proposal approved in a June special session that awaits Perry's approval or disapproval, says the measure would generate more than $460 million for Medicaid by "placing a premium tax on Medicaid managed-care companies that are expanding to the Rio Grande Valley."

But Steve Levine, a spokesman for the medical group, and Anne Dunkelberg, associate director of the Center for Public Policy Priorities, each said that it would be incorrect to characterize the relevant change as a tax hike.

According to Dunkelberg, the legislation requires certain valley residents who sign up for Medicaid to enroll in managed-care plans. Health care companies that offer the plans will have to pay the same existing tax that companies already pay in Bexar, Dallas, El Paso, Harris, Lubbock, Nueces, Tarrant and Travis counties. The tax also is charged of Texas HMOs in the commercial market.

Managed-care plans assign patients to personal physicians who are their gateways to other medical services.

Levine pointed out that the projected revenue breaks down to about $240 million in additional direct revenue and $220 million in savings because the managed-care plans are expected to reduce hospital visits and other high-cost medical services.

Another tax-y wrinkle: Some state fees are poised to increase, but we found none charged to every — or even most — residents, an aspect that would make them more like a tax.


— Lobbyists would have to pay more to register with the Texas Ethics Commission, resulting in about $486,000 in additional agency revenue, according to the fiscal note on a fiscal matters measure approved in the special session and awaiting Perry's OK.

— All state prison inmates would have to pay an annual $100 health care services fee, projected to increase state revenue by $9.9 million during the two-year budget period.

— Surcharges on fees now levied by the Texas Railroad Commission would deliver additional money to a new Oil and Gas Regulation and Cleanup Fund, dedicated to covering the commission's regulation of oil and gas development. No surcharge could be more than 185 percent the current fee.

Mark this a Kept promise.

Our Sources

Email, response to PolitiFact Texas, Steve Levine, vice president, communication, Texas Medical Association, July 6, 2011

Telephone interview, Anne Dunkelberg, associate director, Center for Public Policy Priorities, Austin, July 6, 2011

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