(Astrid Riecken)

Grade-school education: The budget that Perry presided over reduces education spending across the board, from pre-K through higher education. The budget delivers $4 billion in basic funding cuts to public schools — 6 percent cuts across the board next year, then targeted cuts totaling $2 billion in 2013. It also guts $223 million in state grants for at-risk pre-schoolers.

The burden of these cuts will largely fall on cash-strapped local school districts that have resorted to imposing fees on school programs and services for students and their families. The Texas Tribune highlights one town north of Fort Worth, for example, where voters rejected a property tax hike to make up for state aid cuts. As a result, the Keller Independent School District imposed a $185 fee for riding the school bus to close the gap — and that was before this year’s spending cuts had passed. During the budget debate, some school districts threatened to sue the state for forcing them to adopt such “ pay to learn” schemes to stay afloat. Teacher layoffs and furloughs, as well as larger class sizes, will be other options that Texas towns may have to consider.

In addition to the short-term costs, some policy analysts warn about the longer-term consequences of these major reductions if they set a precedent for future spending targets. “I’m concerned,” says Steve Murdock, a sociologist at Rice University and former U.S. Census Bureau director under President George W. Bush. “The first few years are critical, and we’re not very generous when it comes to education to begin with.” While the booming Texas economy has been built, to a significant degree, on low-wage jobs that don’t require high educational achievement, Murdock warns that such an approach won’t sustain the state forever. “You look at new jobs ... they’ve been relatively low skill and low-paying jobs. That’s never been the key to a prosperous future, at least in any modern times.” During the budget fight this spring, some in the business community agreed. “If we don’t have an educated workforce, the jobs will leave,” Bill Hammond, president of the Texas Association of Business and a former GOP state lawmaker, said in March. “We are not meeting the needs of the future.”

Back in the 1980s, then-GOP governor Bill Clements also faced a similar budget crisis in Texas. Rather then cut education spending, he “raised taxes and investment in public schools, which at the time were competing with Alabama’s and Mississippi’s for worst in the country,” as my colleague Brad Plumer has noted. Perry, by contrast, has been unapologetic about his hardline stance against tax increases, putting his all-cuts budget at the center of his nascent presidential campaign. And as governor, he insists that state officials aren’t to blame if teachers get laid off as a result of the cuts. As he told the Houston Chronicle in March: “The lieutenant governor, the [Texas House] speaker, and their colleagues aren’t going to hire or fire one teacher, best I can tell. That is a local decision that will be made at the local districts.”

Higher Education: Public colleges and universities face 9 percent across-the-board cuts under the Texas budget, which could be particularly significant given their role in providing human capital and innovation in the state. The University of Texas-Austin “supports the whole Austin area, in gaming, software and nanotech, Texas A&M has biotechnology,” says Ray Perryman, an economist based in Waco. “They provide a great workforce, they’re at the cutting edge of research that’s important as we move forward.” For example, according to a 2006 study cited by the Texas A&M agriculture department, “the overall return on public investment in agricultural research is 40% nationally.”

Perry has, at times, actively supported such goals. In 2009, he backed a far-reaching plan to create more “Tier One” research universities in the state, with $600 million available for up-and-coming universities if they meet certain benchmarks — an accomplishment he’s also highlighted on his campaign Web site. And he’s been adamant about his desire to transform university-heavy cities like Austin into “the next Silicon Valley.”

But some of the state’s most prominent public universities remain unhappy about the spending cuts that Perry and the Texas legislature have approved, arguing that they threaten their “first-class” status. To date, big institutions like UT-Austin have largely been able to accommodate such drop-offs in state spending by finding outside research money, says Bruce Kellison, associate director of UT-Austin’s Bureau of Business Research. But this time around, “the cut has been so dramatic there could be some very strong effect on the university,” Kellison says. Rather than cut research dollars, universities could chose to impose higher tuition or fees on students, who will be affected by the budget as well: Scholarships for 29,000 low-income college students will be eliminated, and cutbacks will affect 14,000 more students in financial aid programs.

Separately, Perry has also pushed the Board of Regents to adopt reforms that would force public universities to measure teaching productivity through student evaluations, as well as separating funds spent on research and teaching. University officials have fought Perry’s campaign to make universities more like “consumer-oriented” businesses, but others are convinced that it will lead to more efficient, transparent spending of public dollars. “We’re obviously concerned about producing a quality workforce,” says Hammond, of the Texas Association of Business, praising Perry’s “new accountability system with the level of funding the legislature has able to come up with.”

Medical Education: Finally, the Texas GOP’s budget eliminates $220 million in funds from Texas public health science centers. The cuts completely eliminate the state’s primary-care residency program, and reduce state funding for the family-practice residency by more than 70 percent. In addition, there’s a 10 percent formula funding cut to medical schools and reductions to vocational nursing training. The concern is that the residency programs won’t be able to turn elsewhere to fill the gap, exacerbating the shortage of primary care doctors that is already plaguing states across the nation.

Given Texas’ burgeoning population, together with the scheduled Medicaid expansion under federal health reform, cuts to medical education now could leave the state short-staffed, Tom Banning, chief executive of the Texas Academy of Family Physicians, tells the Austin-American Statesman. “We will have fewer physicians caring for Texas patients at a time we need to be growing that physician base.” But having talked up the possibility of dropping out of Medicaid altogether, Perry may use the state’s physician shortage for mandated care as a sign that the federal government is requiring too much care — not that there are too few doctors.