GALVESTON — One of the main things that stood between 4,000 University of Texas Medical Branch employees and layoffs this week was a “tightfisted, conservative Aggie.”
State Sen. Steve Ogden, a Republican from Bryan, gained particular significance in Galveston County when, after a few phone calls, he halted a plan — at least temporarily — by the University of Texas System to cut a third of the medical branch’s 12,000 employees, many whose homes were damaged by Hurricane Ike.
“It seems unfair to tell people on pretty short notice that in addition to all the losses they suffered, by the way, you lost your job,” said Ogden, who earned a master’s of business administration degree at Texas A&M University.
But Ogden, whose role as chairman of the Senate Finance Committee makes him one of the most powerful Texas politicians, warns that the check isn’t in the mail and that many political and financial hurdles remain as long-lived tensions and resentments about the county’s largest employer finally come to a head.
All Ogden did was offer a reprieve, he said.
“The good news in all this is the state of Texas is in pretty good financial shape, so it’s not impossible for us to assist,” Ogden said.
“It’s a complicated issue and an expensive issue; we have bought some time to sit down, look at all the different perspectives and come up with the best solution for taxpayers, but also the most humanitarian one for people who have lost a lot.”
The state has an estimated $5 billion surplus, but about $3 billion is earmarked to pay for property tax cuts lawmakers approved last year. There’s $6.8 billion in the state’s “Rainy Day Fund,” but lawmakers prefer to use that for one-time expenses rather than continuing operations.
On Sept. 13, storm surge from Hurricane Ike flooded 750,000 square feet of medical branch buildings, including the 600-bed John Sealy Hospital’s first floor.
The medical branch, which also operates research laboratories and a medical school, said its major revenue generators are offline. Thousands of employees are idle.
So far the institution, with a $50 million monthly payroll, has incurred $710 million in expenses. It has only $100 million in flood insurance.
Laying off 4,000 people, as UT System officials had considered, would have saved only $27 million, which isn’t a lot considering the medical branch is on the hook for $600 million, Ogden said.
Medical branch President David L. Callender was prepared Tuesday to announce mass layoffs. But Ogden, Lt. Gov. David Dewhurst and House Speaker Tom Craddick, among other officials, delivered Callender, and the employees, a reprieve.
But a pledge of support isn’t the same as a check in hand, Ogden acknowledged Wednesday.
Beyond damage to buildings and equipment, the storm left the medical branch vulnerable to the wishes of lawmakers resentful about how much money the state sends to the island.
There’s a long-standing, though incorrect, perception that the money goes to treat only the county’s poor.
There’s also frustration among lawmakers that the medical branch, unlike some other health-care systems, isn’t supported by a local taxing district.
Ogden said there’s also frustration at the UT System for the ongoing losses at the medical branch.
Before the storm, the medical branch was facing a $35 million deficit, despite a round of cost-cutting that trimmed 381 people from the payroll.
Local distrust of the UT System rose this week after revelations that officials were prepared to make drastic job cuts so soon after a hurricane and without much compunction.
UT System officials, however, have said they’ve been in discussions every day since the storm, have considered many options and support the medical branch. They also this week tried to quash a die-hard rumor that they planned to move the medical school to Austin.
It’s unlikely that lawmakers would want to restore the medical branch to pre-Ike operations, Ogden said.
“If it was up to me, and I was king, I would rebuild it tomorrow and I would keep it the way it is,” he said. “But I think in the context of a $600 million loss, and the context of what it may cost even after we covered the losses, going forward we need to look at it and weigh the pros and cons.”
Having Ogden’s support is good for the medical branch, said state Rep. Craig Eiland, a Democrat from Galveston. Although Eiland refers to Ogden as a “tightfisted conservative,” he said he’s someone the medical branch wants fighting on its behalf.
“He’s powerful and for him to be on our side for a week, a month or a year, is critical and very appreciated,” Eiland said.
Eiland, Ogden, UT System officials and other state leaders are expected to meet next week to discuss options for the medical branch as it faces the biggest crisis in its 100-year history.
The storm blew in a showdown about funding that had been festering for a long time, Eiland said.
“It brought it to a head,” Eiland said.
Meanwhile, there are murmurs that Ogden and other lawmakers’ support is politically motivated and that layoffs were merely postponed until after the Nov. 4 election. Ogden said that wasn’t true.
“The biggest issue is a human one,” Ogden said. “This is not a parochial problem; it’s about what’s best for Texas and Texans.”
