You have reached your limit of free articles this month.

Enjoy unlimited access to myStatesman.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks

X

Welcome to myStatesman.com

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on myStatesman.com.

State lawmakers face likely budget cuts


Highlights

Comptroller Glenn Hegar says lawmakers will have less money to spend this session.

Cuts are likely unless lawmakers tap into the rainy day fund or raise taxes — both unpopular with conservatives.

Lawmakers made fiscal decisions last session that are limiting spending options this year.

Sales tax revenue is increasing, despite lower oil and gas prices.

Despite sluggish oil and gas prices, the Texas economy is still growing and state revenue is increasing, which should be good news for lawmakers returning to the Capitol on Tuesday. But there will actually be less money to spend over the next two years, thanks in large part to fiscal decisions made last legislative session.

Texas Comptroller Glenn Hegar made the long-expected bad news official Monday when he unveiled a $104.9 billion biennial revenue estimate, which determines how much money lawmakers can spend in the 2018-19 budget. That’s 2.6 percent below the revenue estimate for the current two-year budget.

Hegar said growth is offset by two factors: a smaller-than-expected cash balance to start the session and a state constitutional amendment that will set aside billions of dollars in sales tax revenue for highway spending.

The bleak budget outlook and the GOP-controlled Legislature’s aversion to tax increases mean lawmakers probably will have to make cuts and will have less flexibility if they attempt to bolster distressed programs such as Child Protective Services and the foster care system or increase funding for public education.

TEXAS POLITICS DELIVERED EVERY DAY: Sign up for our Texas Politics email

State Rep. Drew Darby, R-San Angelo, said the state would need $5 billion to $6 billion more in discretionary funds to avoid making cuts. Asked if he wished the tightfisted budgeting measures adopted in recent sessions had been less aggressive, Darby said, “They are what they are.

“We made decisions based upon facts we had available at that time. We satisfied some priorities that we had in the last cycle,” said Darby, who sits on the House Appropriations Committee. “Obviously, there’s going to be cuts in the budget, and we’re going to have to talk about where those cuts can come.”

To calculate his revenue estimate, Hegar predicted that oil prices will be $55 per barrel in the 2018 fiscal year and $59 per barrel the next year. After peaking at more than $100 per barrel in 2014 and falling to around $30 in 2015, a barrel of the benchmark West Texas intermediate crude was trading for about $52 Monday.

Low fossil fuel prices slow drilling and spending by energy companies in Texas, directly cutting into the state’s oil and gas production taxes and indirectly dragging on the sales tax, the state’s largest revenue source.

LIKE US ON FACEBOOK: Our Lone Star Politics page brings Capitol news to your Facebook feed

The comptroller’s revenue estimate deals only with money over which lawmakers have discretionary control. The total amount of available revenue, including federal funds that pass through the state and other dedicated revenue streams, will be $224.8 billion for 2018-19, Hegar’s report said.

One big reason that the discretionary budget is not keeping pace with the state’s economy is Proposition 7, a state constitutional amendment lawmakers and voters approved in 2015 that will divert $4.7 billion in 2018-19 from discretionary revenue to the State Highway Fund.

Additionally, the last Legislature cut the franchise tax on businesses by 25 percent. That cut will result in the tax yielding $7.8 billion in the 2018-19 budget, a 2.4 percent decrease.

READ: YOUR GUIDE TO THE 85TH LEGISLATIVE SESSION

Eva DeLuna Castro, budget analyst for the left-leaning Center for Public Policy Priorities, said the state should avoid cuts by tapping its Economic Stabilization Fund, the so-called rainy day fund, which conservative lawmakers are loath to use except in emergencies. Hegar on Monday said the fund has $10.2 billion and will grow to $11.9 billion by the end of the 2018-19 budget if left untouched.

“Texas ranks 46th in state spending per resident, so we do not have a lot of room to keep cutting. … You can’t cut what’s not even there to begin with,” Castro said. “What’s that saying? ‘If you’re in a hole, stop digging.’ That’s exactly the case here.”

Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Joe Straus, all Republicans, in June instructed state agencies to prepare for 4 percent budget cuts. They exempted several programs, including CPS and border security.

On Monday, Abbott issued a statement vowing to support a budget “that funds our most vital services without growing faster than the growth of population and inflation.”

“Texans expect their government to live within its means, and I fully expect to sign a budget that does just that,” Abbott said. “As fiscal conservatives, we must treat our state budget the way families do — by funding our priorities, while constraining the size and growth of government.”



Reader Comments ...


Next Up in Texas News & Politics

Happenning soon: Crowds expected to rally at Texas Capitol for public education

Texas teachers, parents, students and community members are expected to rally at the Texas Capitol at 10 a.m. to show support for public education. Scheduled speakers at this rally include Democrats Sen. Kirk Watson and Rep. Gina Hinojosa, two state lawmakers from Austin. The rally was put together by Save Texas Schools, a nonpartisan statewide...
Sunny weekend ahead until possible showers Sunday night

Saturday and Sunday are set to be sunny days, but be prepared for some possible wet weather Sunday night. Saturday’s high will be near 83. That night will be clear with a low around 58. Sunday will be partly sunny with a high near 88. But that night, it will be mostly cloudy with a 10 percent chance of showers and thunderstorms before 2 a.m....
Before phishing scam came along, report showed San Marcos at risk
Before phishing scam came along, report showed San Marcos at risk

More than a year before the February phishing attack that led a San Marcos employee to accidentally leak hundreds of W-2 forms, an assessment identified the city’s lack of cybersecurity training as a vulnerability. The assessment, completed in the fall of 2015 by SHI Security Services, found that the city didn’t have a security awareness...
2 North Carolina children found stabbed to death
2 North Carolina children found stabbed to death

North Carolina police said they have found the bodies of two missing children Saturday morning in Hoke County. >> Read more trending news Fayetteville police had been searching for 2-year-old Serenity and 4-day-old Genesis Freeman overnight Friday. Their father refused to tell police where the children were, officials said. The children's mother...
Before phishing scam came along, report showed San Marcos at risk
Before phishing scam came along, report showed San Marcos at risk

More than a year before the February phishing attack that led a San Marcos employee to accidentally leak hundreds of W-2 forms, an assessment identified the city’s lack of cybersecurity training as a vulnerability. The assessment, completed in the fall of 2015 by SHI Security Services, found that the city didn’t have a security awareness...
More Stories