Budget Update:Where We Stand

Eva DeLuna CastroSenior Budget Analyst

Center for Public Policy PrioritiesMay 13, 2011

What’s the solution when

ideology doesn’t match

reality?

Budget instructions to state agencies

(May 2010)

Agency requests go to LBB & Governor’s

Office (August)

Public hearings before LBB/Gov. (Sept./Oct. 2010)

Governor’s Budget Proposal

LBB Budget Proposal

Comptroller’s Revenue Estimate

Before the 82nd Session Started…

With a few exceptions: 2012-13 “base” = amount of GR

and GR-Dedicated Funds that agency spends in 2010-11,

minus 5%

Four-fifths vote to override

Committees named

Senate Finance (budget and taxes)

Public hearings (6 subcommittees)

Mark-up

House Appropriations (budget bills)

Public hearings (5 subcommittees)

Mark-up

Committee version to full Senate (up or down vote, Article XI)

Committee version to full House (floor amendments, Article XI)

Conference committee on budget

Legislative Process (82nd)Ways & Means:

taxes

Conference committee report to House and Senate

Senate House

To Comptroller for certification

To Governor for vetoes

To state agencies (operating budgets)

Final Legislative/Executive Process

Two-thirds vote to override (if still in

session)

General Revenue Shortfall, Budget Approved by the House

Requested GR

Proposed GR, HB 1

General Revenue Shortfall

HHS $ 31.0 b $ 22.0 b - $9.0 b -29%

Education 56.4 b 43.6 b - 12.8 b -23%

Criminal Justice

9.2 b 7.8 b - 1.4 b -15%

The rest 6.2 b 4.2 b - 2.0 b -32%

TOTAL $102.8 billion $ 77.6 billion - $ 25.2 billion -25%

GR Shortfall, Senate Budget

Requested GR

Proposed GR, HB 1

General Revenue Shortfall

HHS $ 31.0 b $ 22.3 b - $8.7 b -28%

Education 56.4 b 49.1 b - 7.3 b -13%

Criminal Justice

9.2 b 8.4 b - 0.8 b - 9%

The rest 6.2 b 4.4 b - 1.8 b -3%

TOTAL $102.8 billion $ 83.8 billion* - $ 19 billion -18%

*Includes $2 b Foundation School Program delayed payment

“Worst Case” Children’s Budget

Inflation-Adjusted Spending Per Student

Doctors Taking Medicaid Patients, 2010

Dallas County Impacts (biennial)School Finance Changes:SB 22: $384 million reduction vs. current law. Enough to fund 4,700 ISD jobs, with private-sector impact of 6,600 jobs. House plan is twice as bad, plus $45 million lost in preK-12 grants.

Health & Human Services: Senate reduces funding by $773 million, 12% less than is being spent in 2010-11. Current services requires $1.8 billion more (of which $1.1 billion is federal funds)

Texas Needs A Balanced Approach

to Balancing the Budget

Use the Rainy Day Fund

Utilize All Federal Funds Available to Us

Find New Sources of Revenue

How Can Texas Close

the Revenue Gap?

Alternatives to Cuts

School Aid Deferral (not in HB 1) $2 billion

Federal stimulus for education $0.8 billion

HB 3640: Tax Speed-Ups $1 billion

Use Rest of Rainy Day Fund $6.3 billion

TOTAL $10 billion

(HB 1 already assumes $100 million+ in fee increases, plus tuition hikes)

Longer-Term Solutions

Apply Sales Tax to Services $5 billion

Repeal high-cost natural gas tax break $2 billion

“Healthy Texas” taxes $3.5 billion

Hospital quality assurance fee $350 million

TOTAL $11 billion

www.txforward.org

Let’s examine our prioritiesLet’s examine our priorities

Let’s make sure Texas’ story is NOT about

shortchanging our kids.

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