Texas' tough budget choices require our immediate action
By Leticia Van de Putte
Published 12:02 a.m., Thursday, March 24, 2011
The Texas Legislature has reached the halfway point in the 82nd Legislative session and one issue remains at the forefront of my legislative agenda—the state's unprecedented $27 billion budget shortfall.
While other topics appear to dominate discussions in Austin—human, trafficking, voter ID, eminent domain, redistricting, and the stewardship of the Alamo, among dozens of other issues—the state's budget crisis overshadows each of these since it impacts every decision I make.
I do not yet know how we will solve this unprecedented budget crisis. On March 15, the governor finally agreed to tap the Rainy Day Fund, and the House Appropriations Committee approved the expenditure of $3.1 billion from the state savings account to cover Texas' debt on this year's budget only.
But while we have come a long way in getting the governor to change his mind on the Rainy Day Fund, it is still not enough to cover next year's budget.
By approving the use of the fund only to help address a deficit this fiscal year, we have not solved Texas' financial woes—we have once again put them off to the future. I am increasingly uncomfortable with the continued tactics of delay and diversion. Serious financial issues remain because the real issue is not the deficit this year, but the $27 billion shortfall through the next two-year budget period.
And the governor says he still stands against using the Rainy Day Fund through that next two-year period. For that, he continues to push lawmakers to balance the budget through cuts alone.
But it has become increasingly clear to me that budget cuts alone will seriously jeopardize Texas families, cost Texas jobs and undermine Texas' economic recovery.
The reality is that we cannot solve this budget crisis without a balanced approach. Using the Rainy Day Fund is a step in the right direction, but the problem is bigger than the total $9.4 billion can fix.
We need to recognize that this crisis is the result of a structural, broken budget process. We did not get here overnight.
Over the past 10 years, Texas has increasingly relied on debt, diversion and delay to balance the budget. As a result, the budget has become harder and harder to balance and less and less sustainable.
So the first step toward planning for Texas' future must be to fix the budgeting process so that voters can understand how their money is being spent. Taxpayers deserve no less.
If we do not fix the budgeting system we will have to face these same heart-wrenching decisions again and again.
This somber message is what I've been sharing with teachers, parents, nurses, small-business owners and community members at my recent town hall meetings in San Antonio on the fiscal state of Texas. There we have had frank and open discussions about the impact of the budget cuts.
I have been sharing my thoughts about the broken budget process while also listening to the concerns over the proposed cuts to public education, social services, and criminal justice programs. The worries, fears, frustrations, and concerns expressed by those in attendance reinforced my belief that Texas needs a balanced approach to addressing our budget shortfall.
This approach must include more than just cuts or the governor's concession on the Rainy Day Fund this fiscal year. We need to recognize that budget cuts are not infinite and painless, that we can't always lower taxes free of sacrifice.
We need accountability and honesty. We need new revenue and to use most of the Rainy Day Fund in balancing the budget over the next two years to mitigate the harm that is about to be inflicted on our most vulnerable populations.
And no matter what short-term balancing tactics we use—tapping the Rainy Day Fund, devastating budget cuts, new taxes or fees—we need to reform the budgeting process for the future and end the system of diversion and delay. We can no longer push off the difficult decisions to the future. The difficult decisions are here and we need to face them now.
Leticia Van de Putte is a Texas state senator for District 26, which encompasses northwestern Bexar County.
The Texas Legislature is in its regular session. The charge is to adopt a state budget for the next two years. A large part of this task will be to come up with appropriations to finance the Foundation School Program. State lawmakers will estimate expenditures and revenues for the approaching biennium. Revenues or income include federal money, taxes, fees, and lottery proceeds. Currently, the projected expenditures exceed the projected revenues, so the lawmakers have a deficit to attack.
It is estimated that the Texas Public School population will grow an additonal 90,000 + students over the next two years. So if the funding remains at its current level, a known deficit will exist. However, the amount of deficit will depend upon any variation to the funding levels. One would expect that if the student population and expenditures increase, so would the funding. However, if the funding did not increase, or worse yet, it decreased, the deficit would be more severe. Currently, Susan Combs, the State Comptroller of Public Accounts, projects the budget shortfall for the 2011-2012 and 2012-2013 to be about $27 billion. That would necessitate a 5-15% budget reduction and cost many school districts dearly as the FSP guarantee is likely to be reduced.
The perfect storm for the current situation:
- the economic recession
- declining sales tax receipts
- a structural deficit in the state's revenue system
- the use of stimulus money to balance the budget for the current biennium
- the continued growth of Texas' student population
-from Larry Stavinoah's presentation to the EISD Board of Trustees, Jan. 22, 2011
