AUSTIN — After massive budget cutbacks in last year’s session — including more than $5 billion in public education — the Texas Legislature expects more belt-tightening when it reconvenes next year.
House Speaker Joe Straus and Lt. Gov. David Dewhurst, the presiding officer of the Senate, said Tuesday they have instructed all state agencies to reduce spending by 10 percent from present levels when they submit requests for fiscal year 2014-15.
“Unlike Washington, where spending increases are automatic, Texas has maintained a balanced budget by forcing government to look for savings first — ensuring taxpayers’ hard-earned money is put to its highest and best use,” said Dewhurst, who is facing former Texas Solicitor General Ted Cruz in the July 31 Republican runoff for the U.S. Senate.
Straus said the instructions he and Dewhurst issued offer important guidance for the next fiscal biennium.
“While our revenue has been healthy this year, we must plan conservatively, which is why we have asked agencies to hold the line on spending,” he said.
Gov. Rick Perry said the proposed cuts should keep taxes low and make the state government run more efficiently, key ingredients making Texas “the epicenter of job creation in the U.S.”
However, as it happened in last year’s session when the lawmakers sliced budgets across the board to offset a $27 billion shortfall, the proposed budget cuts are already meeting strong resistance from Democratic legislators.
“We’re starting all over again,” said Rep. Naomi Gonzalez, D-El Paso, a member of the tax-writing House Ways & Means Committee. “This puts Texas at a further disadvantage. This really calls into question the financial and fiscal health of our state.
Like other Democrats, for the 83rd session Gonzalez favors finding additional sources of revenue and tapping into the Economic Stabilization Fund — better known as the Rainy Day Fund.
The Legislature cannot offset another massive revenue shortfall — projected to be as high as $15 billion — with spending cuts alone, she said.
But Rep. Gary Elkins, R-Houston, who also sits on the Ways & Means Committee, said there is no need to withdraw money from the fund, which is expected to grow to nearly $8 billion by the time the Legislature is back in session.
If anything, “there is still a lot to cut” from the state budget, said Elkins, who in last year’s session was the lone House member to vote against a bill authorizing the Legislature to withdraw $3.2 billion from the fund to cover a deficit for the 2011 fiscal year.
“If we cut 50 percent of the state government your readers in Lubbock wouldn’t even notice it,” Elkins said.
Ways & Means Committee Chairman Harvey Hilderbran, R-Kerrville, predicted that if the Legislature taps into the fund, it would be mainly to cover another budget hole for the current biennium or to pay for a Medicaid gap or even for public education.
In last year’s session, the $3.2 billion withdrawn was about 40 percent of the fund’s total, he said.
For Hilderbran, there is also a bright prospect.
Since Texas businesses paid nearly $5.4 billion in taxes last year, well above expectations, there is also the possibility of a surplus by the time the Legislature is back in session, he said.
“It may be a modest surplus of $2 billion,” Hilderbran said. “Or, it could be twice as much.”
On Jan. 7, the day before the next session starts, state lawmakers will know for sure how much funding they can work with. That is when State Comptroller Susan Combs gives her revenue estimate for the next two fiscal years.
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