03.31.09
The Texas economy and the state budget
The Dallas Fed’s latest Regional Economic Update states that Texas’ Recession Persists:
The Texas economy continues to slow. Almost every region and economic sector in the state is weaker than six weeks ago. In large measure, this slowdown is the result of soft consumer demand and frayed financial markets, although ongoing economic weakness in Mexico and low energy prices have also adversely impacted the region.
Texas is still not faring as bad as many other parts of the country but we’re not doing well. Just check out this chart on existing home sales:
Yesterday the state budget cleared the Senate Finance Committee, the first step through the legislative process. It appears to be the ideal GOP budget, higher spending while keeping tax cuts. How do they do it? Here’s Kuff’s take on this DMN article, Senate Finance Committee OKs Texas budget.
So, thanks to stimulus funding, we can keep those irresponsible property tax cuts and not only not dip into the Rainy Day Fund, but also put aside enough money to pay for a further continuation of those cuts in the next session, when the piper was fixing to hand us a sizable bill for his services. My head is spinning.
Instead of using the the Rainy Day Fund (RDF), they use the federal stimulus, and save the RDF to pay for the tax cuts next biennium – from the DMN linked above.
A key goal of Senate budget writers was to protect the state’s “rainy day fund,” so that 2 ½ -year old school property tax cuts won’t vanish after 2011. The committee left untouched some $9.1 billion expected in the rainy day fund by September 2011.
The reserve is expected to be used next session, when lawmakers will confront a yawning gap between the 2006 property tax cuts and offsetting new revenues from a revamped business tax and higher taxes on cigarettes and private transfers of used cars.
To keep our state and national economic situation in perspective, and how long it will likely take to turn things around, it’s highly recommend to read this, Partying like it’s 1931, and this, No Return to Normal.
[UPDATE]: If your a visual learner Calculated Risk has this, March Economic Summary in Graphs. It ain’t a pretty picture.
Eye on Williamson » The state of the stimulus money in Texas said,
April 1, 2009 at 3:54 pm
[...] this state they’d find a way to get this money into the state’s economy that is getting worse by the day. But they’d rather stay true to ideology than do what’s [...]