House Representative

Oliveira, René O.

FOR IMMEDIATE RELEASE 01/16/2009

State Budget Numbers Project Tough Times for Several Budget Cycles

This week's release of the state's revenue estimate for the next two years gives us a clearer picture of how deeply the nation's economic woes are beginning to affect the Lone Star State.

State Comptroller Susan Combs announced that state revenues for 2010-2011 will be down 10.5 percent, or $9.1 billion. Further, federal revenue projections for Texas are also predicted to decrease by $2.2 billion.

Given that we have yet to pay for ever increasing public school and college enrollment, billions in promised property tax relief, an expanding prison system, decaying road and bridge infrastructure, new demands caused by rising unemployment on state services like health care, a devastated Texas Windstorm Insurance Pool, and damages inflicted by Hurricanes Dolly and Ike, there will be little extra to go around in a populous state like Texas.

Medicaid enrollment growth and Ike-related damage alone, for instance, are estimated to carry at least a $3 billion price tag. Moreover, public school growth has been estimated to cost more than $1.5 billion as an estimated 70,000 new students enter our schools each year.

While the comptroller also announced that there remains $2.1 billion in unspent funds from the current budget cycle, and $6.7 billion is currently in the state's Rainy Day Fund, Texas' growth will easily absorb those funds.

To spend money from the Rainy Day Fund, two-thirds of the House and Senate must be in agreement regarding its expenditure. Given the severity of economic crisis, the Legislature should look seriously at using some portion of the Rainy Day Fund for what has become a truly rainy day.

Recently, tax collections have slowed in nearly every category, unemployment has risen to record levels, and the state's new business tax, which I opposed, has generated far less than anticipated. Also this week, the Dallas Fed released its "beige book" report which indicates that the slowing Texas economy may not rebound until the end of this year, or until 2010, making revenue projections for two years from now even more uncertain.

In the Rio Grande Valley, we are caught between the economic forces of two nations. We feel pressure from the U.S. economic crisis, coupled with the effects of a recently devalued Mexican Peso. Local government budgets will be accordingly constrained as a result.

While our region has become much more economically self-reliant than it was 20 years ago, it is nonetheless adversely affected when the purchasing power in our sister cities in Mexico decreases while Valley jobs are being lost. A tight state budget affects funding our public schools, job creation, public safety, road projects, health care programs, public transportation, parks, environmental protection, and much more.

It is unclear how a proposed federal stimulus package may affect Texas, or how much FEMA relief may be coming to the Texas Coast to help us pay for disaster-related needs. The Legislature, nonetheless, must proceed in crafting a budget that will ensure that our state's basic needs, especially in education, are protected.

(State Representative Rene Oliveira D-Brownsville is currently serving his 13th term in the Texas Legislature. He represents District 37 which includes Brownsville, Port Isabel, Los Fresnos, Bayview, and Laguna Vista.)


Contact:
Laura Welch
512-463-0640