Looking more closely at the budget shortfall

Chairman of the House Appropriations committee, Rep. Jim Pitts (R-Waxahachie) made almost all the Texas newspapers today with his announcement yesterday that the budget deficit facing the legislators next session might be as high as $18 billion. That’s a higher number than anyone has previously reported. Pitts’s $18 billion number includes an anticipated $3.5 billion shortfall in the current budget cycle.

The announcement was made at yesterday’s House Appropriations committee hearing. Speaker Straus (R-San Antonio) spoke to legislators at the meeting, saying that new taxes or tax increases should be avoided. Instead he suggested budget cuts that included a four-day work week, unpaid worker furloughs and a moratorium on new programs. Straus said the 5% budget cuts for state agencies was “just the beginning,” and “insufficient” to solve the state’s budget woes.

In Jason Embry’s First Reading blog he says the quote for the day from Pitts was: “Gambling could help us on our budget. I’m going to look at every revenue enhancer that we can get. If you go across the border [to] Oklahoma and Louisiana, you’re going to see Texas cars, and we need to grab that money.”  While the gamblers might be grinning at Pitts’s remarks, he went on to point out that casino gambling in Texas would require voter approval of a constitutional amendment, which would require a two-thirds vote by the legislature to get it on the ballot.

In 2003 legislators faced a $10 billion shortfall and balanced that budget with new fees (not taxes), some accounting tricks and what some described as draconian cuts in health and social services. How does a $10 billion 2003 shortfall compare to $18 billion in 2010? According to R.G. Ratcliffe on the Texas Politics blog, “today's $18 billion shortfall would have been $15 billion in 2003 dollars."

It’s a good thing the state has about $8 billion in the rainy day fund. It’s certainly cloudy outside!

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