Learning From History

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Dick Lavine /(512) 320-0222 x 101

January 28, 2003

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The Texas Legislature met in emergency special session in 1986, when a sudden collapse in oil prices reduced state revenue dramatically. The Legislature responded to the crisis by raising taxes by 6.1 percent, as well as reducing spending by 4.6 percent. This is equivalent to a tax increase of $3.4 billion for the coming 2004-05 fiscal biennium, as well as a spending cut of $2.9 billion from current budget levels. The budget deficit is proportionately larger now than it was then, but a similar approach is needed.