Theres so much money coming so quickly in a very complicated bill."
Republicans who control both houses of the Texas Legislature and every statewide office have at various times been discussing voting against the proposed state budget due to concerns over new strings (and sources) required to pass the stimulus package. Traditional deficit spending is not allowed in Texas which has a pay-as-you-go" budgetary system.
With congressional spending reaching over $1.5 trillion in the name of economic stimulus the Texas Legislature has a responsibility to demonstrate fiscal restraint and wisely consider the acceptance and use of these federal dollars. Sound budgeting practices and prudent acceptance of federal funds many argue will keep Texas from falling into the fiscal disrepair the rest of the nation is experiencing.
Led by statewide leaders over the past six years Texas has prioritized state spending and exercised fiscal responsibility. As a result Sen. Steve Ogden (R-Bryan) the chairman of the Senate Finance Committee which oversees the state budget was recently able to say We can balance the budget with or without the stimulus money. We do it every session. We are not the federal government.
So it is by no mistake that Texas is one of only seven states to enter 2009 without a budget deficit. California on the other hand enters its budget cycle buried in red ink with over $40 billion in state debt while Texas remains well in the black.
Texas Conservative Coalition Chairman and State Representative Wayne Christian (R-Center) said recently It is no accident that Texas is one of only 7 states to enter 2009 without a budget gap. Fiscal responsibility has served our state well and we must carefully prioritize spending to protect taxpayers in these tough economic times."
Rep. Christian continued California is a financial graveyard. We must learn from the catastrophic mistakes unfolding on the West Coast. The best path forward is to limit spending by crafting a responsible budget."
By most accounts Representative Myra Crownover (R-Denton) and Senator Ogden have done yeomans work building the first drafts of the Texas budget in the House and Senate balancing these & other concerns while crafting the stimulus portion of the state budget. While the Texas Senate approved a version of the budget last week the House will vote next week on their version of the budget.
Both chambers must then agree to resolve differences in proposals before the Legislative Session ends June 1.
The challenge for legislators is to balance a budget that began with a $9 billion drop in available revenue compared to the last budget cycle. Some of that $9 billion hole could be filled with funds from the stimulus package. The stimulus money is prescribed for education health and human services transportation labor criminal justice and housing and infrastructure.
Education will get the largest share - more than $5 billion - followed by health and human services programs which are expected to get more than $3 billion and transportation funds which will receive $1.6 billion according to an analysis by the Legislative Budget Board.
Its an awful lot of money said Dale Craymer chief economist for the Texas Taxpayers and Research Association.
The wisest use of the money is to focus on economic development initiatives that will create jobs and help pull Texas out of this (recession) quicker and that will have the greatest payback down the road Craymer said.
The bulk of the stimulus funds are very flexible and either do not require state matching funds or as in the case of the additional federal Medicaid money reduce the amount of state match needed for that program. To qualify for some funding however Texas must make specific policy changes.
The Legislature must evaluate and balance both the merits and long-term costs of such changes.
Some express concern that stimulus" funds are one-time money" and should therefore not be used to fund programs the legislature could not continue once federal funds run out.
A more accurate way to look at the stimulus monies may be to consider them as replacement dollars. In many instances the federal money replaces state revenue temporarily lost due to the economic downturn.
Gov. Rick Perry has in some instances been critical of the economic stimulus and has not ruled out rejecting certain allocations of stimulus" funds. Perry has been adamant that the money not be used on items that require future continuation of state funding once the stimulus money has dried up.
The biggest problem in all honesty is timing Craymer said. Theres so much money coming so quickly in a very complicated bill. The federal bureaucracy has yet to dot all the is and cross all the ts.
This understandably has certain legislators concerned that a vote for the budget may lead to uncertain spending in the future.
While the Texas Legislature will vote to approve a budget sometime before June 1 in periods between legislative sessions the Legislative Budget Board (LBB) has authority to spend money on items as needed. Conservatives are concerned that LBB may choose to allow some spending of stimulus money on programs conservatives do not approve.
Though its too early to know exactly when the economy will emerge from the recession the Texas economy will emerge stronger only if legislators spend the recovery money wisely.
In a recent letter to legislative colleagues and through press releases across the state the Texas Conservative Coalition proposed firm measures to ensure Texas state government remains financially sound through these uncertain times. The federal money is intended to help states through fiscal 2011.
The proposed measures include:
(i) reducing current General Revenue and General-Revenue dedicated spending by 2.5 percent for the FY 2010-11 budget; (ii) maintaining a Rainy Day Fund balance of at least five percent of states total budget; (iii) to the extent possible limiting the use of federal stimulus funds to one-time expenditures or expenditures with a sunset date that matches the end-date of the stimulus money; and (iv) Constitutionally limit state budget growth. While Ogden and Crownover have carefully considered these provisions and principles as it relates to the stimulus money Legislators should keep these principles in mind as they vote on the budget. They should also remember that before next session the Legislative Budget Board and Governor will prepare written instructions for state agencies to prepare the Legislative Appropriations Requests for the 2012-13 years. These instructions can be crafted to preclude state agencies from including any program or service that expanded as a result of federal stimulus funds in their base funding request which includes General Revenue appropriated over the base budget. The instructions could require that these expanded items be submitted apart from base budget requests as exceptional items. As with any budget the budget adopted over the coming eight weeks will last for only two years. And the next Legislature is not bound to continue funding for any program or service regardless of the amount of revenue available. The members of the next Legislature will make the subsequent decisions on whether funding continues for items in this budget while legislators today must only make decisions about funding priorities for this 2010-2011 budget.
