Letter From Austin: Understanding The Current Fiscal Environment

by Julie Drenner on April 7, 2011

photo by Chief O/Flickr, used under a Creative Commons license

As with any discussions surrounding a budget, one must first start with an understanding of the current fiscal environment. Texas is one of the few large states not in debt and is thus dealing with a revenue shortfall rather than a deficit.

As lawmakers amended the $164.5 billion budget, they remained committed to using the money available rather than taxing citizens to pay for more programs.  Just as we expect individuals and businesses to adjust their spending habits to their relative income, so we should expect it from our government.  Largely due to a decrease in sales tax collection, House members approved a plan decreasing spending by 12.3 percent.

Amendments during the weekend session revolved around moving money from one program to another rather than program expansion.  Social conservatives won a big victory by redirecting family planning funds to programs for Autistic children and those with mental health needs. Members also passed amendments shifting funding to prisons and community colleges initially tagged for the public school system.

Not only was the budget passed without new taxes, but $100 million in possible fees was also stripped from the bill.  An amendment passed to prevent agencies from increasing fees without enabling legislation.  The fees were converted to contingent riders, each requiring individual legislative approval.

The Senate will now take its turn at using the available revenue to fund essential services in the state.  They have already signaled a willingness to increase spending by $10 billion over the next biennium.  If a compromise cannot be reached during the conference committee, lawmakers will be forced to meet in special session after the Governor’s veto period.

Until next week,

Julie Drenner, Texas Director

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