1. MONEY, MONEY, MONEY… Balancing the Texas Budget in 2012-2013

2. Where Do Our State Budget $$ Come From?  State Tax Collections -$ 78 billion  Federal Funds - $ 67 billion  Fees, Fines, Licenses -$ 14 billion  Interest and Investment Income - $ 6 billion  Lottery -$ 3 billion  State Land Income - $ 2 billion  Other Sources -$ 10 billion  Total (2 yr budget) $180 billion 2 Source: Texas Fact Book, 2010, Legislative Budget Board. State taxes only, does not include local property taxes.

3. Where Your State Tax Dollar Comes From (2010-2011 2-year Tax Revenue Estimate) Source: Texas Fact Book, 2010, Legislative Budget Board. State taxes only, does not include local property taxes. 3

4. Where Do Our State Budget $$ Go? (2010-2011 2-year budget) Source: Texas Fact Book, 2010, Legislative Budget Board. State taxes only, does not include local property taxes. 4 Total = $180 Billion

5. The Texas Budget Deficit, 2012-2013 5

6. The Challenge: Eliminate the Budget Deficit  The Texas budget must be balanced  Imagine that you are a Texas State Senator  As members of the Texas Senate you must find solutions that you can live with  Options:  Use some or all of the Rainy Day Fund  Raise revenue  Cut spending 6

7. One Option for Reducing the Deficit: Spend the Rainy Day Fund Would you support using some or all of the Rainy Day Fund to reduce the deficit? 7

8. The Rainy Day Fund* Potential Revenue for 2012-2013 Beginning balance $8.2 billion Growth during 2012-2013$1.4 billion Total Rainy Day Fund Available $9.6 billion 8 * The Texas Rainy Day Fund comes from a variety of sources with most of the money coming from a portion of natural gas and oil tax revenues.

9. Closing the Budget Gap: Raise Revenue  Raise Existing Taxes  Sales Tax, Franchise Tax, Gasoline Tax, Cigarette Tax, Motor- Vehicle Tax, Beer Tax  Create New Taxes  Soda Tax, Quality Assurance Fee  Eliminate Tax Exemptions and Discounts  Sales Tax Holiday, high-cost natural-gas exemption, 10% property tax appraisal cap, optional homestead exemption  Other Revenue Options  Allow slot machines in existing gambling sites 9

10. Closing the Budget Gap: Reduce Spending Cut existing programs (some examples)  Education  Cut $25 million in grants to help school districts build science labs (program total is $59.5 million)  Reduce financial aid spending ($50 million)  Eliminate dropout prevention for teen parents ($10 million)  Health and Human Services  1% reduction in Medicaid provider payments ($64 million)  Temporary hiring freeze from HHS agencies ($8.9 million)  Close 50 beds at Terrell state hospital ($27 million)  Eliminate services for 8090 seniors or persons with disability receiving Medicaid LTC services at home ($96.2m)-DADS  Reduce comprehensive rehabilitation services by 70% and not provide services to approximately 840 clients ($23.6 million)- DARS  Reduce prevention and early intervention programs by 84% ($73.7 million)  Reduce state mental health hospital capacity, community mental health services for adults and children and substance abuse intervention services ($136.7million)  Prisons  $239 million to prison and parole system, including eliminating the substance abuse treatment program. 10

11. Did You Eliminate the Deficit?  How did “the Senate” vote on the Rainy Day Fund?  How did “the Senate” vote on raising revenue?  How did “the Senate” vote on cutting existing programs? 11

12. What Does the Budget Deficit Mean for AARP Members?  Balancing the budget with a large deficit will be extremely challenging  There will be a lot of attention on the big budget items (i.e., Education and Health and Human Services)  Medicaid is a large part of the health and human services piece of the budget and vulnerable to cuts  Medicaid is the primary payer of long term care services like nursing home and care in the community (helps pay for two- thirds of all nursing home stays) 12

13. Protecting Seniors who need Long Term Care  The proposed 10 percent cut to long term care providers would take a heavy toll on consumers who use Medicaid nursing homes and community care.  Places nursing home residents at risk by reducing staff and care for our must vulnerable seniors.  For the seniors who depend on community-based long-term care programs, the rate cuts will make it harder to find people willing to do this important work. 13

14. What Can You Do To Help?  Let your state elected officials know you want them to protect seniors who need long term care.  Protect current funding levels for nursing home and community care.  Lets not push seniors from community into more expensive nursing homes.  Your state elected officials:  Your state elected officials: (To Be Completed by ASD for each event)  Texas Senator:  Texas Representative: 14

15. Want to Read More About the Texas Budget? Texas Fact Book, 2010 Texas Legislative Budget Board http://www.lbb.state.tx.us/Fact_Book/Texas_FactBook_2010.pdf Budget 101: A Guide to the Budget Process in Texas Senate Research Center, January 2009 http://www.senate.state.tx.us/SRC/pdf/Budget101-2009- web.pdf Rainy Day Fund: The Texas Tribune, January 7, 2011 http://www.texastribune.org/texas-taxes/rainy-day-fund/ 15