Texas
Budget an Example for Other States
by Stephen E. Ogden (R-Bryan)
Chairman, Senate Finance Committee
(June 25, 2009)
- With near unanimity, the Texas Legislature passed, and the Governor signed, a state budget of $182 billion for the two-year period beginning September 1, 2009. Funding increased by approximately $10 billion over the current biennium, focused in critical areas such as education, healthcare, transportation, and Hurricane Ike recovery. The budget is balanced, and we preserved the "rainy day" fund to address future needs. This was no small feat.
In January 2009, the Texas Comptroller of Public Accounts reduced the state's biennial revenue by $9.1 billion compared to the previous two-year period. This adjustment reflected the deteriorating Texas economy and an uncertain outlook. This estimate appears well-justified considering, among other statistics, that April 2009 sales tax revenue declined 5.4 percent and automobile sales tax receipts declined 24 percent compared to April 2008.
Texas
must balance its budget within available revenue, and we did. This was possible only because the legislature saved $3.0 billion from the 2007 surplus, our state ran a small budget surplus in 2008-2009, and we will receive additional federal funding from the American Recovery and Reinvestment Act of 2009 (ARRA). Of the $12.1 billion in ARRA funds appropriated in the budget we just passed, $6.2 billion was budgeted for education. Adjusted state and federal spending for public education will increase by $4.5 billion. Correspondingly, higher education funding will increase by $1.4 billion.
I know that it was prudent to stay out of the rainy day fund for the next two years. It should be assumed that the $12.1 billion ARRA funds will not be available two years from now. Based on current economic indicators, there is little expectation that state tax revenue will increase sufficiently in the next two years to replace the ARRA funds and address other needs. The only other source of revenue will be the rainy day fund.
As an author of SB 1, the General Appropriations Act, I am proud of the fact that the budget passed with broad, bipartisan support in both houses of the legislature (29-2 in the Senate, 142-2 in the House). As we look forward to the next two years, we can confidently say that state spending is smart, focused, and under control. Texas is in good fiscal shape and, by example, Texas should lead the nation out of the current recession.
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