Monday, January 10, 2011

Texas Budget Deficit at $27 Billion, Says Texas Comptroller Susan Combs

Texas is expected to collect $72.2 billion in taxes, fees and other general revenue during the 2012-13 budget, down from the $87 billion used in the current two-year budget, Comptroller Susan Combs announced Monday.

That puts the shortfall at $27 billion given that maintaining services would run $99 billion for biennium.

Combs’ estimate dictates how much the Legislature will have to spend in the upcoming budget on education, prisons, health and human services and a slew of other state functions.

Even with the $9.4 billion rainy day fund, the state would still not have enough to maintain services at their current levels, which would run $99 billion according to agency budget requests.

Though Texas is facing a budget shortfall of roughly the same magnitude as California, it has gotten nearly no notice in the mainstream press, and at this point, there’s practically nothing left in the state’s budget to cut besides public safety, education and health care spending (while Texas already has some of the lowest per-pupil spending rates and the highest number of those without health insurance).

In September, Gov. Rick Perry guessed the state was facing a $10-11 billion budget shortfall for its fiscal 2012-2013 budget, and refused serious comment on reports that his budget gap might be larger. Not only did Perry severely underestimate the depth of his state’s budget woes, but he has also spent the last few years lecturing Washington D.C. on its supposed fiscal improprieties, giving speech after speech in which he held up Texas as the economic model for the nation to follow. Just last week, he said that Congress needs to propose a balanced budget amendment to the Constitution, or else “the hard work that Texas and states like ours have done to make prudent fiscal decisions will be washed away by Washington’s growing avalanche of excess”:
“I am convinced that a constitutional limit on Washington’s spending sprees and irresponsible borrowing is the only boundary they will understand and heed. Otherwise, the hard work that Texas and states like ours have done to make prudent fiscal decisions will be washed away by Washington’s growing avalanche of excess.” [Source]

“Americans are growing ever more aware of this spending explosion, and increasingly interested in grabbing the throttle, so they can slow down Washington’s runaway train. I’m convinced that the hardworking citizens of our state and country simply want government to handle the basics, then get out of the way, as we have done here in Texas.” [Source]

“I don’t suspect I’m the only person in this room who is concerned about a national debt that has blown past $11 trillion and a federal deficit that is well over $1 trillion… Fortunately, we have taken the opposite approach here in Texas.” [Source]

“In Texas and South Carolina, we’ve focused on improving “soil conditions” for businesses by cutting taxes, reforming our legal system and our workers’ compensation system. We’d humbly suggest that Congress take a page from those playbooks by focusing on targeted tax relief paid for by cutting spending, not by borrowing.” [Source]
As Paul Krugman wrote in a NYTime OpEd, “Texas is where the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting wasteful spending — has been implemented most completely. If the theory can’t make it in Texas were Republicans have dominated state government for more than a decade, it can’t make it anywhere.” And it seems the theory can’t make it there.

Click here to read the comptroller’s report (PDF)

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