Good news: The improving economy and steadily increasing sales tax receipts may mean that we won’t have another budget apocalypse in 2013. Bad news: The Republicans in the Lege will use this as an excuse to avoid fixing the state’s underlying revenue problems.
The state’s rebounding economy should help Texas avoid another draconian budget session and could help state lawmakers to begin investing in education, transportation and a water plan, state officials told a group of manufacturers on Wednesday.
While it might not be easy to meet the state’s needs, given some of the stopgaps the 2011 Legislature used to pass its budget, new taxes don’t appear to be on the table.
Texas Speaker Joe Straus and state Rep. Harvey Hilderbran, R-Kerrville, struck an optimistic tone during a meeting of the Texas Association of Manufacturers without committing to new revenues beyond what an expanding economy provides.
Hilderbran, chairman of the House tax-writing committee, said he is “leaning against” a complete overhaul of the state’s primary business tax.
“I’d prefer to grow the economy rather than grow government,” Straus said in his prepared remarks. He said the Legislature must address a few key issues: improving public and higher education, financing water and transportation projects, and growing the economy.
There are two ways to deal with the structural deficit caused by the imbalance between the property tax cut and the underperforming business margins tax. You can actually fix the problem by adjusting either or both taxes and/or finding other revenue sources to make up the difference, or you can hope that the economy improves to the point where overall revenue is enough to patch it over. That’s what the Lege did in the 2006, 2007, and 2009 sessions, with the latter being possible thanks to federal stimulus funds. No one would like to see the economy back on that kind of track than I, but if we keep having to divert several billion dollars from general revenue to plug this hole, it makes it harder to meet needs elsewhere. You know, like those water and transportation projects you say you want to fund. Where’s that money going to come from?
Another speaker at the convention, state Rep. John Otto, R-Dayton, offered a more somber look at state budget issues.
Otto, who serves on both the appropriations and the tax-writing committees, agreed with Straus about water and transportation projects. “They have to be funded somehow. I don’t know how yet,” he said.
Otto noted the large turnover in the Legislature and the election of many tea party-backed lawmakers who campaigned against more state spending.
“You better count your votes before you go down that road,” he said.
Good luck with that, in other words. Ignoring problems doesn’t make them go away. And remember, while you guys are fiddling, the Supreme Court will eventually hand down yet another directive to Do Something about public education funding. Sooner or later, those bills come due.