Anticipating Budget Cuts, State Agencies Shrink

State government is shrinking. Many attribute the big drop to the $15 billion in budget cuts lawmakers passed in this year's legislative session. They kicked in on Sept. 1. But these cuts didn’t come as a shock to state agencies; they've been preparing for the budget deficit — and dropping employees — for more than a year.

In May, while lawmakers were finalizing the details of the 2012-13 state budget, state agencies turned in their employment reports to the State Auditor’s Office, which keeps track of the number of government employees paid by the state. A Tribune analysis of the reports supports the anecdotes about Texas’ shrinking state government.

According to head counts provided by state agencies, Texas had a net loss of nearly 3,700 full-time employees and 970 part-time employees paid by state appropriations between May 2010 and May 2011. 

Before the legislative session even began, Gov. Rick Perry and other leaders asked state agencies to cut 7.5 percent from their budgets to reduce the revenue shortfall. (Lawmakers eventually plugged the $4.3 billion revenue hole for the 2009-10 biennium by drawing money from the Rainy Day Fund.) Agencies were also told to prepare for 10 percent less in budget appropriations for the following biennium.

Interactive: Texas' Shrinking State Government

Use this interactive table to get a closer look at the employment changes at state agencies over the last year.

The job losses were worst at state agencies that receive 90 percent or more of their funding from state appropriations, as opposed to from the federal government, private grants or tuition. At those 115 state agencies, there was an average 6 percent decrease in total employment.

The Texas Department of Criminal Justice, the largest state government employer, has more than 2,000 vacant full-time correctional officer positions. The agency attributes the loss of an additional 1,000 positions directly to lost funding. The agency also chose not to fill many vacant positions, Lyons said, and eliminated programs, transferring the services offered by those programs to other departments. “Everyone was trying to be pro-active in identifying areas where we could save money in these economic times,” she said.

The Department of Rural Affairs lost the greatest percentage of its employees over the last year — nearly half — and soon the agency will be eliminated entirely because of budget restructuring. During the special session, the Legislature approved Perry’s proposal to save $6.4 million a year by shifting the agency's duties to the Department of Agriculture. Many of the employees who left the department this year were moved to the General Land Office, said Jerry Walker, the deputy executive director of the department, because GLO took over the program that distributes disaster recovery funds. Others left to work in the private sector when government contracts related to the disaster recovery grants kicked in and “shifted program management over there,” he said.

Although Texas is losing a high number of state-paid positions, on average, state agencies had less than a 1 percent change in the number of full-time equivalents. (Full-time equivalents are equal to the total number of hours all employees worked, divided by the hours one full-time employee would work.) 

The anomalous growth has mostly been in agencies that receive funding other than state appropriations. Only 28 agencies that receive the bulk of their funding from state appropriations reported an increase in employment. And the majority of the agencies that gained state-paid employees added fewer than 10 full-time positions. 

State organizations that receive less than 90 percent of their funding from state appropriations, including many state universities, reported a net increase of more than 1,634 full-time equivalents. But while overall employment grew, the same organizations reported a net decrease of 975 full-time employees and 1,150 part-time employees paid by state appropriations. That is, they increased the number of full-time equivalents while decreasing the number of actual people employed.

The University of Texas Medical Branch in Galveston reported the highest increase in state-paid full-time employees, but university spokesman Raul Reyes said that's because the they're still making up for Hurricane Ike-related job losses. In 2009, UTMB laid off more than 2,500 people because Ike had ravaged the facilities, causing the university to shut down its emergency room and hospital. “We had always said we would start hiring people back when we could, which is what you’re seeing there,” Reyes said.

August marked the first month in nearly a year that employment declined in Texas, which Tom Pauken, the chairman of the Texas Workforce Commission, has attributed to the loss of government jobs. But state government jobs actually increased slightly in August. Local government — which lost 11,500 jobs — caused the decline.

Although experts say local government, specifically school districts, are bearing the brunt of budget cuts, it is not as easy to monitor the overall growth or decline of local government employment. Unlike state government employment, which is reported to the State Auditor's Office four times each fiscal year, reports of local government employment are not consolidated in a statewide database. 

An approximation of job losses in Texas public schools can be gleaned by looking at the Bureau of Labor Statistics reports of employment in local government education services. For the last nine years, employment in local education services has increased by an average of 20,000 employees each August compared to the previous year. But this year, the federal Bureau of Labor Statistics reported 3,300 fewer jobs in local education services than in August 2010.

The Center for Public Policy Priorities, a left-leaning think tank, has estimated that 49,000 jobs in education will be lost over the next two years because of budget cuts.

“I don’t think that there’s an accurate number,” said Barbara Williams, a spokeswoman for the Texas Association of School Boards. The association has only heard anecdotally from school districts about the affects of budget cuts, but so far, the reports aren't as terrible as many expected, she said.

"Early in the legislative session districts were braced for a gigantic budget cut," said Debbie Ratcliffe, a spokeswoman with the Texas Education Agency. Ultimately, school districts received a 6 percent budget reduction on average, she said.  “A lot of districts that had announced they’d have to lay off staff have actually rehired most of those employees."