Budget Woes in Texas

  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 11:24 AM GMT
    In the Texas Observer:

    "It’s come to this: The Texas budget outlook has become so bleak that we’re comparing rather favorably to the one state where balanced budgeting goes to die.

    "People, our budget deficit is now as bad as California’s.

    "Yes, the over-spending, over-regulated capital of hippiedom now has a state fiscal outlook on par with the Lone Star State.

    "That fact may not sit well with some people--especially in the governor’s office, which loves to bash California and never misses an opportunity to point out how Texas’ low-tax, business-friendly model has led to a more robust economy and sound state finances. When California faced a $60 billion deficit last year--a shortfall that was bigger than the entire budget of most states--you could almost hear the chortling from the Texas governor’s office. It seemed a handy example of what happens when you put big-spending liberals in charge."

    To read more, click on the link:

    http://www.texasobserver.org/contrarian/texas-budget-mess-now-as-bad-as-californias

    Other articles on the budget shortfall:

    http://www.texastribune.org/texas-taxes/2011-budget-shortfall/

    http://sunshinereview.org/index.php/Texas_state_budget

    http://www.businessinsider.com/texas-state-budget-crisis-2011-1

    And this one is for southbeach:

    http://www.nytimes.com/2011/01/07/opinion/07krugman.html

  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 12:01 PM GMT
    Color me completely unsurprised. icon_rolleyes.gif

    Rick Perry is a snake oil salesman cum tent revivalist whose sole agenda is to fleece the people of Texas to make his friends rich.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 12:13 PM GMT
    I wonder how Virginia stays in such good shape.

    Maybe it cuz by law we have to have a balanced budget and so we are self-correcting constantly and therefore in small amounts so it rarely reaches the level of high drama.

    I remember it did a decade or so ago. The governor and legislature had to make dramatic cuts. They did and that was that.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 4:17 PM GMT
    Both have something in common, they are being overrun by mass illegal immigration and exponential birthrates among the population pools with usually no assets.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 5:04 PM GMT
    mocktwinkie saidBoth have something in common, they are being overrun by mass illegal immigration and exponential birthrates among the population pools with usually no assets.


    Ah... Mock, I missed your subtle racism.

    Please read the articles, as they explain what actually caused the deficit.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 6:08 PM GMT
    Christian73 said
    mocktwinkie saidBoth have something in common, they are being overrun by mass illegal immigration and exponential birthrates among the population pools with usually no assets.


    Ah... Mock, I missed your subtle racism.

    Please read the articles, as they explain what actually caused the deficit.


    Oh how astute of you! This WHOLE THING has to do with race! If the illegals just happened to be Russians I wouldn't care at all, right?

    And of course, I'm sure you'd be decrying my comment as subtly racist if all of the illegals I'm referring to happened to be Germans.





  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 6:32 PM GMT
    southbeach1500 saidMost of the problem has to do with Medicaid and the new burdens placed on Texas (and all the states who haven't opted out) as a result of Obamacare.

    Which is just what I and many have been predicting over the past year during the whole Obamacare debate.


    Yet another post which has nothing to do with what the news reports say are the budget issues for Texas.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 7:00 PM GMT
    mocktwinkie said
    Christian73 said
    mocktwinkie saidBoth have something in common, they are being overrun by mass illegal immigration and exponential birthrates among the population pools with usually no assets.


    Ah... Mock, I missed your subtle racism.

    Please read the articles, as they explain what actually caused the deficit.


    Oh how astute of you! This WHOLE THING has to do with race! If the illegals just happened to be Russians I wouldn't care at all, right?

    And of course, I'm sure you'd be decrying my comment as subtly racist if all of the illegals I'm referring to happened to be Germans.


    Are the undocumented workers you're referring to Russian or German?

    And, more to the point, none of the articles about this issue even mention illegal immigrants as a budget buster, but rather - as with the federal government - the combination of planning based on previous revenue years, which were invalidated by the recession and, of course, cutting taxes for business and wealthy people and refusing to raise them again.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 7:21 PM GMT
    southbeach1500 said
    Christian73 said
    southbeach1500 saidMost of the problem has to do with Medicaid and the new burdens placed on Texas (and all the states who haven't opted out) as a result of Obamacare.

    Which is just what I and many have been predicting over the past year during the whole Obamacare debate.


    Yet another post which has nothing to do with what the news reports say are the budget issues for Texas.


    Clearly you didn't read the articles:

    The whole budget is basically education and healthcare spending.

    Obamacare forces huge new burdens on the states, shifting people out of Medicare and into Medicaid.




    I did read the articles as well as one's about NYS fiscal problems, none of which cite the changes in the HCR, most of which haven't even taken effect yet.

    Try again.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 7:32 PM GMT
    Christian73 saidColor me completely unsurprised. icon_rolleyes.gif

    Rick Perry is a snake oil salesman cum tent revivalist whose sole agenda is to fleece the people of Texas to make his friends rich.



    Yup.
    And he learned it all from the BUSHES
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 7:34 PM GMT
    mocktwinkie saidBoth have something in common, they are being overrun by mass illegal immigration and exponential birthrates among the population pools with usually no assets.



    And they've been run by grossly incompetent REPUBLICAN governors for years.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 7:46 PM GMT
    The bigger picture is that the entire country is going bankrupt - it is only a matter of time before the Chinese and the other G8 nations decide to dump the dollar as utterly worthless - an activity which has been slolwly in progress already for the past couple of years.

    Like it or not, we Americans are very much where the former Soviet Union was at in the late 1980s - fiscally and socially bankrupt with a massive military with its governmentally controlled (or in our case, very heavily onfluenced) news media and gov't bureaucracy maddeningly trying to plaster over the many holes in the cracked dam.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 8:13 PM GMT
    alphatrigger saidThe bigger picture is that the entire country is going bankrupt - it is only a matter of time before the Chinese and the other G8 nations decide to dump the dollar as utterly worthless - an activity which has been slolwly in progress already for the past couple of years.

    Like it or not, we Americans are very much where the former Soviet Union was at in the late 1980s - fiscally and socially bankrupt with a massive military with its governmentally controlled (or in our case, very heavily onfluenced) news media and gov't bureaucracy maddeningly trying to plaster over the many holes in the cracked dam.




    Since 1948, Democratic presidents have increased the National Debt at an annual rate of 3.2%.
    And, Republican presidents have increased the National Debt at an annual rate of 9.2%.
    So, the Republican party's economic policies have increased the National Debt almost three times as much as the Democrats have.

    It's too bad that the right-wing "news media" of Fox and right-wing talk radio have been able to spin and lie so many gullible Americans into such a state of brainwashed miscomprehension, that they aren't blaming the party that's by far the most guilty of ballooning the National Debt.
    The fiscally irresponsible Republican party.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 8:33 PM GMT
    Christian73 said
    mocktwinkie said
    Christian73 said
    mocktwinkie saidBoth have something in common, they are being overrun by mass illegal immigration and exponential birthrates among the population pools with usually no assets.


    Ah... Mock, I missed your subtle racism.

    Please read the articles, as they explain what actually caused the deficit.


    Oh how astute of you! This WHOLE THING has to do with race! If the illegals just happened to be Russians I wouldn't care at all, right?

    And of course, I'm sure you'd be decrying my comment as subtly racist if all of the illegals I'm referring to happened to be Germans.


    Are the undocumented workers you're referring to Russian or German?

    And, more to the point, none of the articles about this issue even mention illegal immigrants as a budget buster, but rather - as with the federal government - the combination of planning based on previous revenue years, which were invalidated by the recession and, of course, cutting taxes for business and wealthy people and refusing to raise them again.


    Illegal aliens don't have a race. And why does it matter what race they are? Obviously it matters to you. Because if the "undocumented workers" (as you gracefully put it) in question were made up of primarily Russians or Germans then your race card strategy would appear as farcical as it really is.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 8:50 PM GMT
    mocktwinkie saidBoth have something in common, they are being overrun by mass illegal immigration and exponential birthrates among the population pools with usually no assets.


    Both have something else in common: they are states of the United States. icon_lol.gif

    Rather than pointing to your pet theory of everything, why not read what the Texans say themselves:
    http://www.texastribune.org/texas-taxes/2011-budget-shortfall/How the state fell into a hole

    Declining sales tax receipts and the recession: State lawmakers write a budget based on an educated guess of how much money will be available to spend during the period for which they're writing a budget. For example, in 2009, lawmakers wrote a budget for 2010-2011. State government gets about 60 percent of its revenue from sales taxes, so when there's a dramatic drop in state revenues, or collections, there's less money to spend. During the economic recession of 2008-2009, Texas saw a drop in state revenues for 14 straight months.

    Structural deficit: Some budget watchers say lawmakers created a "structural" deficit in 2005, when lawmakers cut school property taxes by one-third and expanded the business tax to make up the difference. But the business tax brings in billions less each year than the property tax did, meaning that with every new budget, lawmakers must find more and more extra money to make up the difference. The structure of the revenue system creates deficits each year.

  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 8:58 PM GMT
    q1w2e3 said
    mocktwinkie saidBoth have something in common, they are being overrun by mass illegal immigration and exponential birthrates among the population pools with usually no assets.


    Both have something else in common: they are states of the United States. icon_lol.gif

    Rather than pointing to your pet theory of everything, why not read what the Texans say themselves:
    http://www.texastribune.org/texas-taxes/2011-budget-shortfall/How the state fell into a hole

    Declining sales tax receipts and the recession: State lawmakers write a budget based on an educated guess of how much money will be available to spend during the period for which they're writing a budget. For example, in 2009, lawmakers wrote a budget for 2010-2011. State government gets about 60 percent of its revenue from sales taxes, so when there's a dramatic drop in state revenues, or collections, there's less money to spend. During the economic recession of 2008-2009, Texas saw a drop in state revenues for 14 straight months.

    Structural deficit: Some budget watchers say lawmakers created a "structural" deficit in 2005, when lawmakers cut school property taxes by one-third and expanded the business tax to make up the difference. But the business tax brings in billions less each year than the property tax did, meaning that with every new budget, lawmakers must find more and more extra money to make up the difference. The structure of the revenue system creates deficits each year.



    I think Mock was trying to ignore those reasons, Q. Sales taxes instead of income taxes, eh? Well, that worked well, didn't it?

    -Doug
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 8:59 PM GMT
    southbeach1500 saidMost of the problem has to do with Medicaid and the new burdens placed on Texas (and all the states who haven't opted out) as a result of Obamacare.

    Which is just what I and many have been predicting over the past year during the whole Obamacare debate.

    Budgets are made a full 2 years in advance in Texas. Health care hasn't gone into effect yet, and this problem was already beginning years ago:

    ,,,lawmakers created a "structural" deficit in 2005, when lawmakers cut school property taxes by one-third and expanded the business tax to make up the difference. But the business tax brings in billions less each year than the property tax did, meaning that with every new budget, lawmakers must find more and more extra money to make up the difference. The structure of the revenue system creates deficits each year.

    Ummm... nothing to do with health care, one of your favorite targets. Reminds me of how you said Obama was a failed President within his first months in office, and you blamed the ongoing economic downturn on him. Remember the warning of the philosopher: "Those who forget their own history are condemned to become like southbeach1500."
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 9:07 PM GMT
    It's called tunnel vision. One only sees illegal immigrants (not the economic benefits they bring to us but just the burdens), the other sees Obamacare (or the taxes that have to come out of his pocket to pay for his share of expanding medical insurance). Doesn't matter if the theory doesn't fit the facts.

    In medicine it's called premature closure of inquiry or anchoring, with confirmation bias afterwards.
    It's also called Procrustes' method.
    procrustes07.gif
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 9:32 PM GMT
    southbeach1500 said
    Art_Deco saidBudgets are made a full 2 years in advance in Texas. Health care hasn't gone into effect yet

    Texas is having problems now. Obamacare is in effect now.

    (Well the taxing and burdensome mandates on the states... the "benefits" don't go into place until 2014).

    Ummm... and you actually thinks this proves your argument, and disproves my statements above? Like I said, you were blaming Obama for the economic mess as soon as he moved into the White House, using that same illogic: "He's the President NOW, and these problems are happening NOW." Based on the famous Republican Party principle of retrograde responsibility & effect, which only happens when Democrats take office.

    And they get away with it because most Americans don't understand that government budgets are planned long in advance, and economic trends take years to be seen. Now you DO know this, but you play the Republican PR game here, hoping some of these guys are like the average American. I got news for you -- they ain't, they're wise to you, and see right through you and your right-wing propaganda.
  • Posted by a hidden member.
    Log in to view his profile

    Jan 07, 2011 9:35 PM GMT
    http://www.firstfocus.net/sites/default/files/StateCost_Dorn_0.pdf
    The Patient Protection and Affordable Care Act (Affordable Care Act or ACA) will affect state budgets in many ways. State Medicaid spending on low-income adults will rise, for two reasons. First, the Affordable Care Act is expected to increase enrollment among individuals who currently qualify but have not yet signed up for Medicaid, enrollment for which states must pay their standard share of Medicaid expenses. Second, the legislation requires Medicaid to cover all adults with incomes at or below 133 percent of the federal poverty level (FPL). While the federal government will pay 100 percent of all health care costs for newly eligible adults during 2014- 2016, states will begin paying some of these costs in 2017, with the state share gradually rising to 10 percent in 2020 and thereafter. Taking into account both of these factors, prior analyses by the Urban Institute have concluded that, depending on whether participation levels resemble historical averages, as anticipated by the Congressional Budget Office, or significantly exceed those levels, state costs for Medicaid adults with incomes at or below 133 percent of FPL will rise by between $21.1 billion and $43.2 billion during 2014-2019.

    To place these costs in context, this paper analyzes potential savings states can achieve under the Affordable Care Act. In sum, we find the following results for 2014-2019:
    --By eliminating optional Medicaid coverage for adults over 133 percent of FPL, thus shifting them to federally-funded subsidies in the exchange, states can save between $21.3 billion and $28.2 billion.
    --By replacing state and local spending on uncompensated care with federal Medicaid dollars, states and localities can save between $42.6 billion and $85.1 billion.
    --By replacing state and local spending on mental health services with federal Medicaid dollars, states and localities can save between $19.9 billion and $39.7 billion.
    A worst-case scenario will thus see states realizing net budgetary savings of $40.6 billion during 2014-2019. In a best-case scenario, those gains will reach $131.9 billion.
  • conservativej...

    Posts: 2465

    Jan 07, 2011 10:37 PM GMT
    There was a caveat in the first article, shown below in the original parenthesisitalics:


    (Another caveat: I found several different figures for California’s state spending (not counting federal funds). The governor’s office budget proposal seems to show $123 billion in state spending. But the Wall Street Journal and Los Angeles Times both reported about $83 billion, so I’m going with that number.

    It’s also worth noting that even though Texas’ budget deficit is very similar to California’s, the Lone Star State is still in a better fiscal position. Texas has better credit ratings and nearly $9 billion banked in the Rainy Day Fund. We also haven’t yet sliced our budget by about a quarter, as California did last year. (And California is losing $52 million a day because state leaders missed their deadline to pass a budget and still can’t agree.))


    If you validate both the Texas budget/deficit as well as California against numbers that are SAS compliant, then perhaps we would have a better view. The governor’s number is obviously very different that the numbers from the LA Times and WSJ.

    Perhaps a better indicator is each state’s bond rating. Bonds from California are low quality. Texas state bonds are investment grade. The bond rating accounts for many factors that paint a more accurate picture of the state's finances. (A picture of source for those who can afford to invest. Not to the average RJ member whose income goes up or down depending on whether lie-berals control Congress.)

    Granted, who am I to say one way or the other.. My dissenters shall go right along there appointed path. I think I'll take another vacation myself.
  • GQjock

    Posts: 11649

    Jan 08, 2011 1:02 AM GMT
    southbeach1500 saidMost of the problem has to do with Medicaid and the new burdens placed on Texas (and all the states who haven't opted out) as a result of Obamacare.

    Which is just what I and many have been predicting over the past year during the whole Obamacare debate.


    Oops ..... sorry icon_wink.gif

    Can't go there yet
    The hi-jinks that got the Lone Star State in such a State can't be blamed on the Healthcare law
    The changes hadn't taken effect ... to have an effect on it's current Billions in short fall

    But I know how much that you wish it would

    Here's how Texas got into this mess
    and it was because they cut property taxes without replacing the shortfall in 2006
    and here's the Texas Observer story that predicted it
    http://www.texasobserver.org/contrarian/perrys-role-in-the-budget-mess
    Perry's Role in the Budget Mess
  • Posted by a hidden member.
    Log in to view his profile

    Jan 08, 2011 3:11 AM GMT
    http://www.nationalreview.com/exchequer/256614/no-paul-krugman-texas-not-broke

    No, Paul Krugman, Texas Is Not Broke
    January 7, 2011 2:37 P.M.
    By Kevin D. Williamson
    Tags: Deficits, General Shenanigans, Melodrama Villains, Pants, Paul Krugman, The States

    In terms of harbingers of the apocalypse, it isn’t exactly dogs and cats living together or John Bolton exchanging facial-hair-grooming tips over sugary mint tea with ayatollahs, but, brace yourselves: Texas is facing a projected budget deficit. I know, I know: horrors, right?

    Paul Krugman is practically rubbing his hands together with glee like some thin-mustached and top-hatted melodrama villain: Bwahahaha! If Texas goes down, conservative economics goes down with it!I shall rule the world! Look for the usual liberal snots to be talking up the story: Texas is finished, baby!

    Keep your pants on, professor. Texas is not going to have a budget shortfall.

    Texas’s present situation is not exactly unprecedented. It happens in Texas from time to time: You have a state with no income tax, property taxes assessed at the local level (where the taxpayers are apt to fire the taxspenders), and very little else, revenue-wise — Texas has one of the lowest tax burdens in the country — which leaves the state sales tax and the 1-percent “franchise” tax, which is a fancy way of saying a weird little business-revenue tax on firms with more than $1 million in sales. (Hey, New Jersey: How’d you like to trade your current state-tax burden for a 1-percent business tax and a 6.25 percent sales tax? You get most of the nation’s new jobs in the deal, too.) So, money’s always tight for Lone Star State government, and lots of Texans kind of like it like that.

    But Texas, despite its small-government reputation, is not exactly Galt’s Gulch — you’ve still got to pay those menacing state troopers and the surly fat lady down at the DMV, etc. On top of all that, Texas has a boomier-bustier economy than most other states do, mostly because of the outsize role the oil business plays in the economy, and hence in the tax-revenue stream.

    Ergo, the occasional shortfall projection.

    Except that Texas doesn’t do shortfalls. Texas starts from scratch: Every year is basically Year Zero when it comes to the state budget — there is no assumption that next year’s funding will match or exceed this year’s, and the state’s constitution explicitly forbids any legislature to tie the hands of a subsequent legislature, financially or otherwise. When necessary, Texas implements zero-baseline budgets, in order to keep the state living within its means, even if Paul Krugman thinks it beastly.

    Rick Perry established a pretty good standard for gubernatorial brass-dangling the last time there was a projected budget shortfall, in 2003. Governor Perry and his colleagues in the Texas legislature took a radical right-wing approach to government budgeting, inasmuch as they started by asking: “How much money do we have?” (Insane, right?) After they figured out how much money they were going to have, they then decided how to divvy it up, in total and radical and right-wingish contravention of the Washington model of budgeting, which goes: Spend everything you have, spend everything you can borrow, and then spend some more, regardless of how much you actually have to spend. And then spend some more; repeat. Which is totally how James Madison wanted it, I am sure.
    In 2003, Governor Perry and Texas Republicans took the state’s budget baseline to zero, and told state agencies to write new budgets, based on what they actually needed to spend to accomplish their missions, rather than based on increasing by 3 percent or 4 percent or 30 percent or 40 percent what they spent last year. And the Republicans handled the politics pretty well: Instead of calling state agency chiefs down to the legislature to be dressed down by pompous elected types or denouncing them from the governor’s office, they had a bunch of what must have been drearily tedious private meetings with them, and helped them to sweat their budgets down in a rigorous but respectful way. It worked. Texas balanced the books, and the place does not look like Afghanistan.

    Republicans like to brag that they balanced the budget with no tax increases, which is almost true (some fees and such went up, and some new ones were created). The franchise tax, which had originally kicked in at around $300,000 in revenue but had been pushed up to $1 million, is coming back down to a $600,000 threshold. It’s a tax increase, but it’s not much of one. If congressional Republicans in D.C. performed as well as Republicans in Austin, we’d be pinning medals on their chests.

    Texas’s low-B.S. approach has had some salubrious effects, as I’ve documented here and here. It also left Texas with surpluses that allowed the state to put about $10 billion in its rainy-day fund, which could come in handy now that the economy seems to be clouding up a little. Could, but probably won’t: Republicans plan to introduce a budget that comes in within current revenue without touching the rainy-day fund. Get your head around that: There’s a multibillion-dollar pot of cash sitting there in front of politicians who must be just slavering inside at the thought of it, and they aren’t going to touch it — even though they have a pretty good excuse. Imagine a Congress that could do that.

    They haven’t delivered yet, but Perry’s Republicans did the stand-up thing last time around and reaped the rewards. Expect them to do it again.

    And it may not be all that hard: Pace Krugman et al., Texas’s potential shortfall probably is not $25 billion. The inside guys talk about $11 billion to $15 billion, spread out over a two-year budget. (Texas writes one budget every two years, and has a legislature that meets every two years.) Even the liberal bedwetters over at the Center for Budget and Policy Priorities expect the budget hole to amount to about 10 percent of the whole enchilada, as compared to more than 50 percent in basketcase California.

    Of that $11–$15 billion, about $8 billion will be Medicaid — and that is the real budget problem faced by Texas and many other states. Rules changes associated with Obamacare will add about 71 percent to Texas’s Medicaid expenses over the first ten years of implementation — that’s Texas’s out-of-pocket expense, not money that the feds reimburse under Medicaid — an increase that quite literally threatens to bankrupt the state. Analysts predict that Medicaid expenses could outstrip all state revenue within a few decades — meaning that Texas could not pay its Medicaid expenses, even if it dedicated 100 percent of its tax revenue to them. That is going to have to change, and I’m going to bet that Texas has better ideas for fixing that problem than Paul Krugman does.

    Texas doesn’t need a new tax to fix it; it ain’t broke.

    UPDATE: A reader points out something I should have pointed out:

    Krugman points to our middlin’ unemployment rate, saying “it’s about the same as the unemployment rate in New York or Massachusetts.”

    Well, that is true. But he forgets one thing. Texas has a 7.9% unemployment rate after a net inflow of 1.78 million job seekers and their families over the last ten years, while New York’s 8% unemployment rate come after 847,000 people left the state.


    If Mr. Krugman would look at the data with a more discerning eye, he’d realize how amazing this statistic is.

    Indeed, it is. I also winced a little at Krugman’s assertion that Texas has to create lots of jobs just to keep up with all the people moving there. Why does the good professor think people are moving there in the first place? Ballet Lubbock is great and all, but I suspect it’s the jobs.

    – Kevin D. Williamson is a deputy managing editor of National Review
  • Posted by a hidden member.
    Log in to view his profile

    Jan 08, 2011 5:00 AM GMT
    riddler78 said
    Of that $11–$15 billion, about $8 billion will be Medicaid — and that is the real budget problem faced by Texas and many other states. Rules changes associated with Obamacare will add about 71 percent to Texas’s Medicaid expenses over the first ten years of implementation — that’s Texas’s out-of-pocket expense, not money that the feds reimburse under Medicaid — an increase that quite literally threatens to bankrupt the state. Analysts predict that Medicaid expenses could outstrip all state revenue within a few decades — meaning that Texas could not pay its Medicaid expenses, even if it dedicated 100 percent of its tax revenue to them. That is going to have to change, and I’m going to bet that Texas has better ideas for fixing that problem than Paul Krugman does.


    That is, if Texas is stupid enough to choose not to enact the ACA and the federally funded exchanges, which, as I quoted above, after 2014, states can eliminate the optional Medicaid coverage for those with incomes at or below 133% of FPL:
    above quoteTo place these costs in context, this paper analyzes potential savings states can achieve under the Affordable Care Act. In sum, we find the following results for 2014-2019:
    --By eliminating optional Medicaid coverage for adults over 133 percent of FPL, thus shifting them to federally-funded subsidies in the exchange, states can save between $21.3 billion and $28.2 billion.
    --By replacing state and local spending on uncompensated care with federal Medicaid dollars, states and localities can save between $42.6 billion and $85.1 billion.
    --By replacing state and local spending on mental health services with federal Medicaid dollars, states and localities can save between $19.9 billion and $39.7 billion.
    A worst-case scenario will thus see states realizing net budgetary savings of $40.6 billion during 2014-2019. In a best-case scenario, those gains will reach $131.9 billion.