How did we get into this budget mess?

AUSTIN (KXAN) - The state's budget crisis didn't get this way on its own overnight. Experts said it began when consumers decided to keep their money in their wallets. People stopped shopping and they stopped buying houses leading to an economic decline.

"The issue is property values have declined," said Moak, Casey and Associates school finance expert Daniel Casey. "We've seen that locally, we've seen that at the state. When that happens it puts more pressure on state funds. Sales tax has slowed -- that really is the basis for the funding crisis that we have. And the other parts of it --  they used a lot of one-time funding sources to fund the current budget."

Those are one-time funds that are spent  -- and the pressure is now on the state to find money somewhere else.

Lawmakers are proposing cuts to programs, services and education. But some believe the outlook for education could have been better if Gov. Rick Perry allowed the state to apply for millions of dollars in educational grant money. A federal program called "Race to the Top" earmarked $700 million to help states improve education. Perry refused to compete for the money.

In a written statement, the governor's deputy press secretary Catherine Frazier said, " Gov. Perry, with the support of various state and education leaders, rejected the Race to the Top funds because in order to receive those dollars, Texas would have had to adhere to one-size-fits-all national curriculum standards and tests, as well as incur ongoing costs. RTTT funds for Texas would have amounted to as little as $75 per student in one-time funding, at the cost of an estimated $3 billion to implement national standards and costly assessments that Texas would have been stuck with indefinitely."

Teacher union groups supported Perry's decision and said the grant had too many strings attached.

"There were policies and non-researched based policies that were not part of the application that we felt would not be good for education in Texas," said Holly Eaton, Texas Classroom Teachers Association 's director of professional development and advocacy.

There was no guarantee the grant would have been awarded had Texas applied. Still, some lawmakers said this is not the time for the state to turn its nose to any money.

"I think the governor's calculus was because we've separated ourselves from the rest of the country with these curriculum standards -- we probably can't win Race to the Top and I don't want to compete if I can't win -- and I think where we are financially, we should compete for every dollar we can compete for," said Rep. Mark Strama (D-Austin).

In light of President Barack Obama's State of the Union address Tuesday night, which focused heavily on education, some lawmakers believe Texas should do everything it can to mirror what Washington wants for the rest of the nation.

"I know the governor and the president think they're mortal enemies, but on education, their philosophies aren't that different," said Strama.

Now it's left to lawmakers and local school districts to make painful decisions that, hopefully, won't leave a lasting scar on its students.