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More on the upcoming budget shortfall..
THE 82ND LEGISLATURE
Perry: Forget rainy day fund
He says budget will be balanced with prioritizing, not reserves, tax
AUSTIN - Gov. Rick Perry on Monday said he was opposed to using the state's rainy day fund to help pay for services despite a looming budget shortfall that is estimated at $15 billion to $27 billion during the next two years.
"We will prioritize what's important in this state. We will fund those. And we will craft a budget that meets those revenue projections and not raise taxes nor get into the rainy day fund," Perry said. "And that's been a consistent message for at least a year and a half."
He disputed the idea of a shortfall when the next budget has yet to be written, noting that Texas' budget must balance: "We don't have shortfalls in Texas. ... You couldn't spend enough to make some of those groups happy."
Perry's comments followed Texas Comptroller Susan Combs' presentation of the two-year revenue estimate that will be used to craft a budget for state government.
Rather than offer a shortfall prediction, Combs confined her official estimate to the amount of state general revenue that will be available for the next two-year budget. She initially put that estimate at $77.3 billion, but lowered it to $72.2 billion to cover a shortfall in tax collections in the current budget and an $800 million transfer to the rainy day fund.
State general revenue — the money over which lawmakers have discretion - is $80.6 billion in the current two-year state budget. It rises to $87 billion when federal stimulus funds used to balance the budget two years ago are taken into account.
Most of the general revenue budget is spent on public and higher education and health and human services.
Combs' estimate would result in a $15 billion gap if the Legislature attempts to keep spending at its current level.
The Center for Public Policy Priorities, which focuses on low- and moderate-income Texans, said it will take at least $99 billion in general revenue in the next two years to maintain the level of services, given the state's growing population and rising costs, including health care.
That would leave a shortfall of at least $26.8 billion, according to Combs estimate, said the center's executive director F. Scott McCown.
"With a revenue shortfall this large, the Legislature cannot write a budget through cuts alone without doing terrible damage to Texans and to the Texas economy," he said.
Cut, cut, cut
House Appropriations Committee Chairman Jim Pitts, R-Waxahachie, said a shortfall figure of at least $27 billion is "in the ballpark" when looking at the amount of money needed to provide the current level of services.
The initial House budget proposal that Pitts introduces will be written within available money, without using the rainy day fund or other additional revenues. Lawmakers will decide how to proceed from there, he said.
"We cut education. We cut higher ed. We cut public ed. We cut health and human (services)" in the initial proposal, Pitts said. "We're just showing the reality of it. ... There may be a group that thinks this bill is great. I don't know what to expect this next legislative session."
GOP leaders have ruled out new taxes, but some lawmakers have discussed the prospect of using at least part of the rainy day fund.
A super-majority vote of lawmakers is required to spend money from the fund, which projected to contain $9.4 billion in the next budget period.
Lt. Gov. David Dewhurst spokesman Mike Walz said that while the fund will not be used in the first Senate version of the budget, Dewhurst "expects both the Senate and the House to dip into the rainy day fund this session in order to fund our priorities and still save a portion to balance the budget again in 2013."
Talmadge Heflin, a Republican former House Appropriations Committee chair now with the limited-government Texas Public Policy Foundation, dismissed the $27 billion figure. He put the shortfall at $12 billion to $16 billion.
Forget current services?
He noted that Combs' estimate only includes a part of the budget cuts that state agencies are expected to tote up in the current budget period .
"They need to forget about current services. ... The opportunity is to reduce the footprint (of state government), to have a more effective state government that will be easier to fund in years to come," Heflin said, "and if we don't take the opportunity of that, we'll have trouble years down the road, next time we have a little down turn in the economy."
Rep. Jessica Farrar, D-Houston, said the cost of cuts must be considered.
"What does it cost when we don't repair a highway?" she asked. "When we have cuts to mental health care, what does that cost our criminal justice system?"
Rep. Mike Villarreal, D-San Antonio, called on lawmakers to commission a bipartisan citizens panel to review the tax structure, with an eye toward the state's needs.
"Are we still committed to growing a state that has a larger share of its residents with high school diplomas and college degrees?," he asked. "If we are, then we must pay for it."
Perry: Forget rainy day fund
He says budget will be balanced with prioritizing, not reserves, tax
AUSTIN - Gov. Rick Perry on Monday said he was opposed to using the state's rainy day fund to help pay for services despite a looming budget shortfall that is estimated at $15 billion to $27 billion during the next two years.
"We will prioritize what's important in this state. We will fund those. And we will craft a budget that meets those revenue projections and not raise taxes nor get into the rainy day fund," Perry said. "And that's been a consistent message for at least a year and a half."
He disputed the idea of a shortfall when the next budget has yet to be written, noting that Texas' budget must balance: "We don't have shortfalls in Texas. ... You couldn't spend enough to make some of those groups happy."
Perry's comments followed Texas Comptroller Susan Combs' presentation of the two-year revenue estimate that will be used to craft a budget for state government.
Rather than offer a shortfall prediction, Combs confined her official estimate to the amount of state general revenue that will be available for the next two-year budget. She initially put that estimate at $77.3 billion, but lowered it to $72.2 billion to cover a shortfall in tax collections in the current budget and an $800 million transfer to the rainy day fund.
State general revenue — the money over which lawmakers have discretion - is $80.6 billion in the current two-year state budget. It rises to $87 billion when federal stimulus funds used to balance the budget two years ago are taken into account.
Most of the general revenue budget is spent on public and higher education and health and human services.
Combs' estimate would result in a $15 billion gap if the Legislature attempts to keep spending at its current level.
The Center for Public Policy Priorities, which focuses on low- and moderate-income Texans, said it will take at least $99 billion in general revenue in the next two years to maintain the level of services, given the state's growing population and rising costs, including health care.
That would leave a shortfall of at least $26.8 billion, according to Combs estimate, said the center's executive director F. Scott McCown.
"With a revenue shortfall this large, the Legislature cannot write a budget through cuts alone without doing terrible damage to Texans and to the Texas economy," he said.
Cut, cut, cut
House Appropriations Committee Chairman Jim Pitts, R-Waxahachie, said a shortfall figure of at least $27 billion is "in the ballpark" when looking at the amount of money needed to provide the current level of services.
The initial House budget proposal that Pitts introduces will be written within available money, without using the rainy day fund or other additional revenues. Lawmakers will decide how to proceed from there, he said.
"We cut education. We cut higher ed. We cut public ed. We cut health and human (services)" in the initial proposal, Pitts said. "We're just showing the reality of it. ... There may be a group that thinks this bill is great. I don't know what to expect this next legislative session."
GOP leaders have ruled out new taxes, but some lawmakers have discussed the prospect of using at least part of the rainy day fund.
A super-majority vote of lawmakers is required to spend money from the fund, which projected to contain $9.4 billion in the next budget period.
Lt. Gov. David Dewhurst spokesman Mike Walz said that while the fund will not be used in the first Senate version of the budget, Dewhurst "expects both the Senate and the House to dip into the rainy day fund this session in order to fund our priorities and still save a portion to balance the budget again in 2013."
Talmadge Heflin, a Republican former House Appropriations Committee chair now with the limited-government Texas Public Policy Foundation, dismissed the $27 billion figure. He put the shortfall at $12 billion to $16 billion.
Forget current services?
He noted that Combs' estimate only includes a part of the budget cuts that state agencies are expected to tote up in the current budget period .
"They need to forget about current services. ... The opportunity is to reduce the footprint (of state government), to have a more effective state government that will be easier to fund in years to come," Heflin said, "and if we don't take the opportunity of that, we'll have trouble years down the road, next time we have a little down turn in the economy."
Rep. Jessica Farrar, D-Houston, said the cost of cuts must be considered.
"What does it cost when we don't repair a highway?" she asked. "When we have cuts to mental health care, what does that cost our criminal justice system?"
Rep. Mike Villarreal, D-San Antonio, called on lawmakers to commission a bipartisan citizens panel to review the tax structure, with an eye toward the state's needs.
"Are we still committed to growing a state that has a larger share of its residents with high school diplomas and college degrees?," he asked. "If we are, then we must pay for it."
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