Before talking about the upcoming budget for the next biennium, which starts in August 2013, let’s look at the mistakes of the Texas Comptroller Susan Combs from two years ago.
Faced with a shortfall fed by a recession and past budget decisions, lawmakers last year carved some $14 billion from the budget, allocating $173.5 billion in state and federal funds combined for the current two-year budget period.
Comptroller Susan Combs set the spending parameters with her revenue forecast, but state tax money is coming in at much higher rate than she projected.
Some lawmakers and budget experts expect to have as much as $8 billion to $9 billion more in general revenue in this fiscal period, which ends Aug. 31. Some are guessing lower. Combs will give her new revenue estimate on the eve of the legislative session.
The unanticipated tax revenue is on top of some $8.1 billion projected to be in the rainy day fund at the end of this fiscal cycle, plus any revenue growth in the next two-year cycle.
What’s 8 or 9 billion dollars between friends. Well it’s the difference between fully funding Medicaid, $4.7 billion, and almost all of the $5.4 billion that was cut from public education. It’s likely Combs will play with that number a little bit too so her last estimate doesn’t look so bad. (For more on this read Incompetent or evil?) There are plenty of other things Texas needs to fund that have been neglected for far too long.
“We didn’t have to cut education,” said Rep. Mike Villarreal, D-San Antonio. “We ended up having nearly twice the amount of money needed to cover the cuts … It’s heartbreaking.”
He would like to see “strategic investments” to restore money to areas including pre-kindergarten and college grants.
Lawmakers also are facing a push to address water and transportation problems.
Which Kuff reinforces in this post, When is a surplus not a surplus? Speaking of the likely already spent surplus he adds:
That’s all on top of the need to do something about the state’s long-term water usage, and the fact that we currently have no way to pay for any new transportation projects, not to mention the fact that our tax system is antiquated and inadequate and in need of serious overhaul lest we run into these same problems every two years forever. Even if we figure all this out, we’re still going to wind up spending less than we would have to in order to provide the same level of services before the 2011 budget cuts. So yeah, let’s not talk about having a “surplus”. If we’re very lucky, we’ll have enough to do a not-completely-inadequate job of meeting the most pressing needs, while hoping like hell that the economy continues to improve and that the idiotic politics of Rick Perry don’t sabotage everything.
And that article on the tax system says this about Texas’ long-term issues:
Threatening state prosperity, though, are daunting facts. By 2040, an estimated 30 percent of the Texas workforce could lack a high school degree, up from just under 19 percent today, according to the Texas State Data Center. In 2010, Texas ranked sixth among states in its share of people living in poverty — 18.4 percent.
“Minorities now comprise two-thirds of enrollment in Texas public schools, but in Dallas and Houston they represent 92 percent and 95 percent of enrollment, respectively,” the report says. While lawmakers will try to seek alternatives and control costs, “the bottom line is that good schools cost money, and a large percentage of that money should come from the state.”The report said Medicaid is a source of state budget uncertainty, given talks under way in Washington over federal deficit reduction and state GOP leaders’ reluctance to expand the program to include parents and working-age adults, as envisioned by President Barack Obama’s signature health care law. Even if Texas rejects the adult Medicaid expansion, lawmakers probably will have to find about $3 billion in new state funds over the next four years to pay for growth of enrollment of already-eligible children and provider rate increases called for by the federal law, the report says.
Infrastructure needs also could exert strong pressure on the state’s finances.
Just to maintain highways in their condition as of 2010, the state needs to “come up with between $6 [billion] and $14 billion in new revenue each biennium to meet these needs,” according to a blue-ribbon panel appointed by the Texas Transportation Commission. To provide needed water supplies and flood control over the next 50 years, the state may need to kick in $1.6 billion a year for the next decade, to help with “front-load” costs of more than $230 billion of projects, Hamilton’s report says, citing the state water plan.
Meeting all the needs will require an end to state budget writers’ use of accounting gimmicks and a hard look at a tax overhaul, the report says.
“Over time, the state sales tax base has eroded due to the increasing economic importance of largely untaxed services as well as online sales,” it concludes. Hamilton urged lawmakers to “avoid the political temptation to add new or expanded incentives to the tax code” and place no further restrictions on local governments’ ability to raise revenue if their voters approve.
“What we need is more focus on the long-range effects of tax and spending decisions and a plan for how to address what the state finds when it looks beyond the next two years,” Hamilton said. [Emphasis added]
That’s right, Texas is not bringing in enough revenue to pay for the future needs of the state. And there’s a fair way to do just that. In recent years Texas’ budget decisions have always been made with what is best for corporations, big business, and the wealthy at the top of the list. In hopes that if their gluttonous needs were taken care of, eventually some of their excess would trickle-down to the rest of us. Well, that hasn’t happened. It’s time we had a budget in Texas that puts the people of Texas first.