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Arlene Wohlgemuth: The TT Interview

The former budget-slashing Texas House member and current executive director of the Texas Public Policy Foundation on how she reads the mood out there, what reductions in state spending should be on the table, whether cost-shifting to local school districts is a plausible option, why lawmakers should forget about new sources of revenue, the trouble with Medicaid and what members of the Republican near-supermajority in the Legislature must do to keep the confidence of voters — and get re-elected.

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As a former state lawmaker, she knows a little something about cutting budgets and the political risks involved. Arlene Wohlgemuth, now executive director of the Texas Public Policy Foundation, was representing District 58 in the Texas House in 2003, the last time the state was in a budget crunch, and she was a leader in efforts to slash spending that year (which turned out to be a major issue in her unsuccessful 2004 campaign against U.S. Rep. Chet Edwards, D-Waco). Today, she's helping members of the Legislature craft cuts to health and human services programs and to make money-saving changes to public education.

Wohlgemuth talked to the Tribune last week about the mood of voters, coming budget cuts and what conservative supermajorities in the Legislature ought to be able to accomplish next year. An edited transcript, full audio and a video clip follow.

TT: How do you read the voters' instructions to state government?

Wohlgemuth: This is the time that the voters have said it's the Legislature's responsibility to get back to the core responsibilities of government. It is time to cut spending, and those are going to be tough decisions, because defining the core function of government for one person may be entirely different than defining for another person. So that's where the debate will happen. But it is time to cut the size of government.

TT: Do they have to cut everything? Education? Health and human services?

Wohlgemuth: They have to go to all of the above. Everything has got to be on the table. There are some small things that can be done, like consolidation of this, that or the other. For example, the tourism magazines — several agencies do those. You can do some small functions like that. Look at providing services in a more efficient way.

Audio: Arlene Wohlgemuth

You can also privatize some services. One of the things that we have already recommended in health and human services is closure of the state schools. They are far too expensive per person, and the maintenance on those facilities is something like $475 million over the next five years. Studies have shown that the residents of those facilities receive equal or better care in the private sector. So there's no justification for maintaining that very high expense. It's a political battle as well as a fiscal battle, but it's time for that particular thing to be done. There are programs that need to be ended, and we're looking very carefully at that.

What I've told the staff is to ask themselves this question: If the government didn't do it, what would happen? If a bad outcome would occur, then the government needs to keep doing it. If it's very likely that private sector would step into that gap and fulfill the mission equally well, then perhaps that's something that government shouldn't be doing. Some things we have to do. But some things, perhaps we don't.

TT: Should the state hand some of its financial duties to other governments?

Wohlgemuth: If you're talking about schools, it's not just the amount of state funding that they receive. It is also what the state requires of the schools. For example, our school finance program is so complex that most of the schools have no option but to hire a CPA to be able to figure out how to get the money. That's, to me, an unjustified expense that the local schools have to bear. I know that different superintendents have come up with pages and pages and pages of what they consider to be unfunded mandates, so you can't just cut the spending and allow all the unfunded mandates to continue. You have to make those priorities. What do we really care about receiving from the school districts? What do we really care about funding for the school districts? We should set the priorities and allow them to have more local control and make those decisions for their community.

TT: Can you balance this budget without shifting costs to local school districts?

Wohlgemuth: I think there are some efficiencies in public education that can be obtained, and I think that there are some things that we can just cut out.

TT: Do you have some things in mind that you want to cut out?

Wohlgemuth: I do.

TT: Anything you want to share?

Wohlgemuth: No.

TT: Is there any new revenue available that lawmakers should consider?

Wohlgemuth: I believe they should concentrate on living within the available revenue as it is, and I believe that's what the message was in the election. The people of this state — and of the nation, as a matter of fact, except for California — were saying, "Stop spending our money, and stop telling us how to live our lives." I don't believe there is any appetite in the public to increase taxation, to increase fees, to increase [revenue] through gambling. I just don't believe that people are interested in seeing revenues increased to the state. I believe they are instead interested in the government living within its means.

TT: If that's how they read this election, and they make those cuts, and they get into particular programs here and there, what's the political risk?

Wohlgemuth: Every time that you ask Talmadge Heflin, our fiscal policy center director [and the former House Appropriations Committee chairman], that question, he says, "Every line item in that budget has its own constituency." So are people going to get unhappy about it? Yes. But if this legislature fails to live up to a clear mandate to cut spending to live within the revenue, then I do believe that the repercussions will be in the next election.

TT: For the politicians, is the bigger risk in cutting programs voters like or in not shrinking government?

Wohlgemuth: I believe it's in not shrinking government, having been through an election where that was an issue.

TT: Does the state have to threaten to withdraw from Medicaid in order to force the federal government to make changes to it?

Wohlgemuth: It may come to that. But I hope that we'll be able to come up with a reasonable health care policy. Medicaid is not only not reasonable, it is too expensive, it wastes way too much money and it delivers a very poor quality of care to those it serves.

TT: Republicans have complete control of state government, including huge majorities in the Legislature. What should they do?

Wohlgemuth: It makes the responsibility for what the people have clearly voiced in this election even greater. There may have been wiggle room before. I don't believe there's wiggle room now. The people are going to expect this Legislature, with no excuses, to live within the budget and to reduce regulation on their lives.

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Economy Health care Politics State government Budget Gambling Medicaid Texas Legislature