Texas Faces a Struggle to Write a Budget That Meets the State's Needs for 2010-11

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Eva DeLuna Castro /(512) 320-0222 x 103

May 12, 2008

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The state budget funds critical public systems upon which we all depend. Unfortunately, a realistic analysis of both sides of the state’s balance sheet—income and expenses—shows that Texas faces another tight budget in 2010-11. While the state will probably have more available revenue than it did for 2008-09, it will also have more people and higher costs, quickly using up any additional funds. Recently the Speaker of the House suggested that the state might have a $15 billion “surplus” by the end of the biennium, with the Comptroller saying that her most recent estimate projects $10.7 billion. But neither is using the term “surplus” in its ordinary sense. In fact, both estimates include expected balances in the Property Tax Relief Fund, which is already committed to pay for previous tax cuts, and in the Rainy Day Fund, which is reserved for emergencies. In all likelihood, the state will again be unable to fund critical public services without new sources of revenue.