State leaders order agencies to make
second round of budget cuts

posted 06.10.10

With the wounds not yet healed from the first round of cuts to state agency budgets, Gov. Rick Perry and the Legislative Budget Board have ordered a second round, this time asking agencies to reduce spending by 10 percent in the next biennium. This is the latest action state leaders are taking to address an impending budget shortfall in 2012-2013, estimated to be between $15 billion and $20 billion.

The first cuts came at the beginning of the year when Gov. Rick Perry, Lt. Gov. David Dewhurst, and House Speaker Joe Straus asked state agencies to trim 5 percent from their 2010-2011 budgets. State leaders reviewed all agency proposals and announced that $1.2 billion of the proposed cuts will be enacted starting Sept. 1. About $500,000 in cuts were spared.

Of the cuts made to the current Health and Human Services Commission budget, $64 million comes from a 1 percent across-the-board reduction in payments to physicians who treat patients enrolled in Medicaid and the Children’s Health Insurance Program, inciting worry among physicians that more could be on the way.

A June 1 article in the Austin American-Statesman reports that HHSC is likely to be hit hard in the next legislative session as lawmakers resistant to levying new taxes try to balance the budget. “Health and human services programs make up almost 30 percent of the state’s current $87 billion general fund, the portion of the budget that is paid for with taxes and over which the Legislature has control,” Statesman reporters Corrie MacLaggan and Kate Alexander write. However, with some HHSC funds restricted because of state and federal law, that leaves other areas vulnerable; namely, state health departments, programs addressing child and elderly abuse, state mental hospitals, and physician pay for state health care programs.

With expansion of the Medicaid program on the horizon, physician groups warn that cutting physician pay could further reduce access to care in Texas. The latest physician survey from the Texas Medical Association reveals that only 42 percent of Texas physicians accepted all new Medicaid patients in 2008.

Stay tuned for updates as your Academy follows this story.