State budget writers will propose eliminating agencies, cutting others to a quarter of their current size and laying off state employees to balance the budget without raising taxes or using the state's Rainy Day Fund.

House Appropriations Chairman Rep. Jim Pitts, R-Waxahachie, told an Ellis County group that the shortfall is also the reason lawmakers have talked about leaving the federal Medicaid program.

"We're making huge cuts," Pitts told the group. "There are agencies that are in existence today that we are eliminating when we introduce the bill. We are making some large cuts to some agencies that are not going away — up to 75 or 80 percent of their budget. That's where we are today, is doing those cuts. And yes, sir, I'm nearly there. But we may need to do some more. And what we may do is we may get furloughs, we are having hiring freezes, we have told the [Health and Human Services Commission] to do a freeze on our waiting list. There are numerous things we can come up with, but we are getting very close to being able to come up with that money without using the Rainy Day Fund."

Pitts was asked what might happen to state employee pension funds. He said the budgeteers are looking there, too. But he said the pension funds for state employees and state teachers are feeling the strains of the economy just like the state is. "None of the pension funds are actuarially sound," Pitts said.

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State leaders have admitted they're considering withdrawing from the federal Medicaid program — a $45 billion part of the state's two-year budget. Pitts acknowledged that during his local appearance and says there is more to come.

"That's the purpose of our study of Medicaid, and Medicare, is to get out of it," he told the audience. "We are looking into getting out of Medicaid." He added that, in order to save money on that program, services would have to be cut.

"The Legislature is going to have to determine who would be eligible for certain things," Pitts said.

"Fewer people would be on our Medicaid rolls if we got out and saved money in the state of Texas," he said. "All of that is going to come out when this study is done."

Here's the video segment with the conversation about the budget; that starts at about the 7:00 mark:

Update (Nov 23, 8:37 a.m.):
A little more information about the video: The videographer was Brannon Bridge, who was shooting for the Ellis County Observer at a Nov. 20 meeting.

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