Why Isn't There Enough Money?

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Dick Lavine /(512) 320-0222 x 101

March 14, 2001

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The current state budget squeeze was fueled in part by tax cuts enacted in 1997 and 1999 (see Policy Page #110). But there are also deeper structural problems with the Texas tax system that keep state and local revenue lagging behind economic growth. If tax revenues had been able to keep up with the growth in personal income since 1994, budget-writers now would have an additional $9.8 billion available to appropriate for the 2002-03 budget. Another $11.2 billion would have been available in 1995-2001.