From THINK PROGRESS:
Back in September, Gov. Rick Perry (R-TX) guessed that his state was facing a $10-11 billion budget shortfall for its fiscal 2012-2013 budget, and refused to entertain reports that his budget gap might be larger until he received the state Comptroller’s official report. He even poo-pooed pronouncements from his 2010 election opponent, Houston Mayor Bill White, that Texas’ deficit may be twice what he was estimating. “If [White] wants to be the budget forecaster for the state of Texas, that’s a different job,” Perry said. “It’s called the comptroller.”
Well, the Comptroller released its report today, and Perry had it wrong:
Texas is expected to collect $72.2 billion in taxes, fees and other general revenue during the 2012-13 budget, down from the $87 billion used in the current two-year budget, Comptroller Susan Combs announced Monday. That puts the shortfall at $27 billion given that maintaining services would run $99 billion for biennium.
Not only did Perry severely underestimate the depth of his state’s budget woes, but he has also spent the last few years lecturing Washington D.C. on its supposed fiscal improprieties, giving speech after speech in which he held up Texas as the economic model for the nation to follow. Just last week, he said that Congress needs to propose a balanced budget amendment to the Constitution, or else “the hard work that Texas and states like ours have done to make prudent fiscal decisions will be washed away by Washington’s growing avalanche of excess” […]
Though it’s facing a budget mess of roughly the same magnitude as California, Texas has received far less attention, and at this point, there’s practically nothing left in the state’s budget to cut besides education and health care spending (while Texas already has some of the lowest per-pupil spending rates and the highest number of those without health insurance).
As Paul Krugman wrote, “Texas is where the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting wasteful spending — has been implemented most completely. If the theory can’t make it there, it can’t make it anywhere.” And it seems the theory can’t make it there.
From the El Paso Times:
AUSTIN — Continuing the same level of state services in areas such as education, health care and Texas’ jail system could create a budget gap as high as $27 billion, some analysts said Monday.
State figures suggest at least a $15 billion gap if spending is unchanged.
But Dick Lavine, a policy analyst with the Center for Public Policy Priorities, which advocates for low-income families, provided a more grim outlook. He said maintaining services at the current level for the state’s growing population would cost about $99 billion — putting the state’s projected deficit closer to $27 billion.
State Rep. Joe Pickett, D-El Paso, who agreed with that estimate, said there will be some difficult decisions ahead for the Legislature, which convenes today.
But Pickett said reducing spending by $27 billion will have a large negative impact on services that El Pasoans rely on. Those include funding for public education, higher education and health care, which make up the largest chunk
of the state’s budget.
El Paso County, with an estimated population of about 751,000, has nearly 144,000 people enrolled in Medicaid and about 24,000 in the Children’s Health Insurance Program, according to state figures. Two years ago, the state and federal government spent $728 million on Medicaid and $28 million on CHIP for the county.
The county’s three largest school districts and the University of Texas at El Paso have also estimated a loss of about $56 million if the state does not restore one-time federal stimulus money it used to pay for school district and university operations.
El Paso lawmakers said they will band together to protect the city from cuts that are disproportionate or unfair.
“If they are an elderly person that’s getting Medicaid and other social services, they may see that reduced,” Pickett said. “If they’re a homeowner and public education is cut, school districts may seek to raise taxes. That may have the biggest impact.”
Lawmakers, who have been at odds over how to plug the state’s budget gap, will ultimately decide how much to trim services, whether to increase fees and if they should tap into the state’s $9.4 billion rainy-day fund.
Using money from the rainy-day fund requires approval from two-thirds of the Legislature.
Gov. Rick Perry and key legislative leaders have said they plan to balance the budget without a tax hike. Some lawmakers say those limitations will result in deep cuts to state programs.