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Texas 20/20 on the budget

Via First Reading, a group called Texas 20/20 has taken a look at what other states have done to deal with their budget shortfalls, and how that may apply to Texas in next year’s legislative session.

The author is former Deputy Comptroller Billy Hamilton, who was a high-ranking aide to Democratic and Republican comptrollers.

Here’s an excerpt: “The key lesson from this review of approaches in other states is that most have balanced their budget only by using a variety of approaches and making painful budget and revenue decisions. There is no simple solution to budget problems as large as those that Texas will face in 2011. When the size of the budget gap is large, lawmakers must approach the task of balancing the budget with creativity and innovation. They must also be willing to decide what the key state services are — what must be preserved and what can be pruned. That is the goal. Reality, as the examples in the other states demonstrates, is often different.”

The full report is here. I will simply note two things. One, this is a detailed illustration of what Ezra Klein has called the anti-stimulus, as all these cuts have acted as a drag of nearly equivalent force to the federal stimulus package of 2009. The scary thing is that there’s much more of this to come, with potentially hundreds of thousands of jobs – teachers, police officers, fire fighters, those kinds of jobs – at risk. That’s because state governments, by and large, are required by their constitutions to balance their budgets, all of which acts to magnify the effect of an economic downfall. The federal government can do something about this, and it did some of it last year, but between the utter intransigence and indifference to suffering of the Republican Party and the shameful fecklessness of too many Democrats, we’re unlikely to get any further action from the feds. I can’t even guess how much worse it would have to get for there to be a change in thinking, but at this point nothing is beyond imagining.

The second point is that as useful as this report is, it does not mention the multi-billion dollar structural deficit that Texas faces thanks to that ginormous unaffordable property tax cut from 2006. We may survive this legislative session more or less intact, and we may finally see better economic conditions by 2013, but we’re never going to truly solve our budget issues until we deal with that. BOR and Dave Mann have more.

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