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We have a budget

Such as it is.

Budget negotiators met briefly this morning and voted 9-1 to adopt a conference committee report that cuts the state budget over the next biennium by $15 billion, or 8 percent. The total amount of funding from taxpayers, known as general funds, is $80.4 billion. The total expenditures for all funds, including federal money, is $172.3 billion.

Senate Finance Chair Steve Ogden, R-Bryan, and House Appropriations Chair Jim Pitts, R-Waxahachie, told reporters their respective chambers are expected to vote on the report as early as Saturday afternoon.

“We have covered the entire (2010-2011) biennial deficit and the budget is balanced for the next two years. And at the end of the day, that’s a pretty extraordinary accomplishment considering the challenge we were in,” Ogden said.

I suppose a Hollywood accountant might call this a “balanced” budget, but between the delayed payments to school districts, the $4.8 billion hot check for Medicaid, the fantasizing about federal waivers and higher-than-projected property tax revenues, it’s a budget built on cotton candy and hallucinations. And that’s before we consider the cost of slashing $4 billion from public education, which was the best case scenario for that. What still hasn’t been done is to figure out how to spread that $4 billion in cuts out over all the school districts.

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said there’s a provision in the budget agreement that makes Foundation School Program payments to school districts contingent on the House and Senate agreeing on school finance.

“If there is not agreement … there’s no appropriations to the Foundation School Program. We’d have to come back in special session,” Ogden said.

Abby Rapoport has more on what the school finance options are at this point. I assume they’re strongly motivated to avoid having to go into a special session. But even if they do, there’s still the question of whether or not the Comptroller will certify the budget. Rep. Garnet Coleman has some questions for Comptroller Combs:

1. Will you evaluate the combined revenue and expenses of all major pieces of legislation regarding the state’s fiscal matters, not just the primary budget bill (House Bill 1), in determining whether or not Texas has passed a balanced budget?

The Legislature is deliberating numerous “fiscal matters” bills that have consequences on our state’s finances for FY 2012-13. In 2003, the last time Texas faced a massive budget shortfall, Comptroller Carol Keeton Strayhorn determined that the budget was a “’patchwork’ piece of legislation that depends on several other bills to determine some of the spending” for the FY 2004-2005 budget. (Source: Associated Press, “Strayhorn criticizes lawmakers for ‘smoke and mirrors’ budget,” June 5, 2003).

Which, if any, bills other than House Bill 1 do you anticipate your office evaluating in order to determine whether or not you will certify the Texas budget?

2. Will you certify $4.8 billion in Medicaid expenses if they are not paid for with revenue Texas can identify in its budget?

Wayne Pulver, an assistant director at the Legislative Budget Board, stated before the Texas House Committee on Appropriations on Monday, May 16 that, “it is our estimate that with these funding decisions, the bill is short $4.8 billion in general revenue.” (Source: Associated Press, “Texas budget plan kicks Medicaid funding problem down the road,” May 21, 2011.) It is your intention to certify the Texas budget as balanced, even if we are budgeting to pay for something we do not have the money to pay for?

3. If you cannot certify the $4.8 billion in Medicaid expenses, will you send the budget back to the House in which it originated to ensure Texas passes a balanced budget?

In 2003, Comptroller Carol Keeton Strayhorn refused to certify the state’s budget because it spent $186.9 million more in the FY 2004-2005 biennium than the state could count as available revenue. Governor Rick Perry, under a special provision inserted by budget writers, was able to use line-item veto authority to cut expenditures in the budget by $186.9 million. Comptroller Strayhorn was then able to certify the budget.

However, the current $4.8 billion shortfall in Medicaid expenses is over twenty-five times the size of the 2003 budget shortfall Comptroller Strayhorn originally did not certify. It is my request that, provided you do not certify the $4.8 billion in Medicaid expenses that remain unaccounted for in any legislation being considered by the Texas Legislature, you do not send the budget to the Governor to balance the budget.

It is our duty, as legislators, to pass a balanced budget. Should you determine that the budget is not balanced, I would request that you send it back to the House in which the budget originated, as prescribed by Article 3, Section 49a(b) of the Texas Constitution.

You can read Rep. Coleman’s full letter to Comptroller Combs here. A statement from the CPPP is here, and a statement from Rep. Mike Villarreal is here. Trailblazers and EoW have more.

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