FOR IMMEDIATE RELEASE 06/06/2013
Balancing the Texas Budget By State Representative Tony Dale
May 27th marked the end of the 83rd Regular Session of the Texas Legislature. Over the course of 140 days 5,868 bills were introduced in the House and Senate and 24% or 1,437 bills passed both chambers. The only measure the Texas Constitution requires to be passed is the biennial budget.
Prior to my service in the Texas House the last legislature faced a multimillion-dollar shortfall in tax collections. They chose to reduce spending in many parts of the budget. They diverted money collected for specific purposes and either used the money for different purposes or didn't spend it and used those funds to balance the budget. They also purposely funded just eighteen months of Medicaid spending instead of the required twenty-four months. Another tactic was to require businesses to pay estimated sales taxes one month prior to collecting it in a so-called tax "speed up". Although they did all the above, they also did not raise taxes in the midst of a recession.
Over the last two years the Texas economy was the best performing in the nation. The leading sector, then and now, is oil and gas, which not only created tens of thousands of new jobs, but also contributed substantially to Texas' tax collections. The robust Texas economy assisted by low taxes, low regulation and civil lawsuit reform filled state coffers. However this year when over 40 new members like myself arrived at the Capitol, we found that last sessions bills were immediately due.
One of the first actions we took was to pay the unpaid five months of Medicaid from last session. That cost over $4B. Under the federal Medicaid entitlement program, if a citizen qualifies, then they have to be covered by the program. Whether one likes it or not, those are the current rules. We also addressed emergency relief funding for the Bastrop fires and the explosion in West in the amount of $185M. We shored up the current budget and restored $1.97B in education cuts that were enacted last session. Furthermore, we reversed the sales tax speed up and told businesses to return to a normal sales tax collection process. So even before starting the budget for the next two years we had to shore up the current budget and pay bills left behind from the last session.
The new budget that we approved for 2014-2015 focuses on the core functions of government. The budget for Texas is balanced, contains no new taxes, substantially ends diversions by more than $800M, restores funding to public education, meets all of the obligations of the state for the next 24 month period, has $1.35B in targeted business tax relief and stays below the Constitutional spending limit. We also made major strides in addressing the state's critical need for funding new water infrastructure projects. By taking these actions the next legislature should not have to cover any unpaid debts like we had to do this session. This is an example Washington DC should follow.
Texas is a large state that is growing by about 1,000 new people per day. Meeting the education, transportation, water, criminal justice, public safety and health needs of +26 million Texans is not inexpensive. The 2014-2015 biennial budget is $197B. When you look at state and federal funds combined $73B (37.52%) is spent on health and human services programs like Medicaid and $74B (37.63%) is spent on education from kindergarten through higher education. This is the first time these amounts have been equal and health care funding is on pace to be the largest part of the budget in future sessions. That is one reason I held the line against expanding the Medicaid program in Texas. When you consider the previous amounts you’ll note that just two areas, healthcare and education, take up just over 75% of the state budget. Everything else the state does, like the court systems, parks and wildlife, road maintenance and construction, the Department of Public Safety and prisons is paid from by the remaining 25%.
I voted for the budget, but just like most measures that come out of the legislative process it is a compromise document. I would like to have been able to vote on a budget with lower spending, but I am glad we cleaned up the shortfalls from last session and fully funded the state's obligations so the next legislature does not have to start in a hole. If one looks at the state budgets from 2010 to 2015 you will see an annual increase of just 2.7% on average. When adjusted for population growth and inflation the 2014-2015 budget is essentially flat with an increase of just 0.377% over the last budget. Not raising taxes, balancing the budget, ending diversions, tax relief for businesses, addressing water funding and restoring education cuts while staying under the Constitutional spending limit are hopefully actions most Texans will be satisfied with.
Dale was elected to the Texas House of Representatives in November 2012. He is a small business owner and veteran of the U.S. Army who previously served on the Cedar Park City Council. He represents western Williamson County, including the communities of Cedar Park, Leander and Brushy Creek, as well as parts of north Austin. He serves on the Energy Resources Committee and Homeland Security and Public Safety Committee. He can be contacted at email@example.com.