Texas state budget (2008-2009)

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State Information


The Texas state budget is implemented for two-year durations by the Legislative Budget Board. Agencies develop their appropriations requests in the first year, the legislature approves the General Appropriations Act in the second year, and the budget is implemented over the next two years.[1] By constitutional mandate, Texas operates under budgets set for two-year periods.[2] As of February 2009, almost $110 billion had been spent, with nearly seven months left to go in the fiscal year.[3]

Typically, the governor is in charge of the state's budget and framework.

Economy at a glance

  • 1.2 million jobs were created in Texas in the last five years.[4]
  • From November 2007 to November 2008, 71% of jobs created in the U.S. were created in Texas.[5]
  • In December 2008, Texas's unemployment rate was 6%.[6]
  • Texas lost 25,700 jobs in December 2008.[7]
  • As of February 2009, home sales in Texas had decreased by 16%.[8]
  • Despite the drop in housing prices, foreclosures remained relatively low. Only one in 9,495 homes was foreclosed upon in Texas in December 2008, compared to one in 71 in Nevada and one in 147 in California.[9]
  • In 2008, Texas experienced an increase in tax revenue due to rising oil prices.[10] The price for crude had dropped 53% from where it was the previous year.[11]

Budget status, 2008-2009

As of February 5, 2009, Texas was one of only six states not facing a budget deficit.[12] Texas expected to take in $77.1 billion in state revenues in 2009.[13] This was a 10.5% decrease in revenue from 2008, most notably due to a slowdown in the Texas economy and reduced tax receipts.[14]

The total budget for the 2008 and 2009 biennium was almost $168 billion. In addition, Texas held about $6.7 billion in a “Rainy Day Fund.”[15] The Rainy Day Fund was established in 1987 following an economic downturn; three-fourths of any oil and gas revenue that was above the 1987 level of such revenue was transferred into the Rainy Day Fund.[16] The fund was expected to reach $9.1 billion by the end of the 2011.[17]

The Texas economy “continues to fare better than most other states” according to State Comptroller Susan Combs.[18] However, "the state was not immune to economic forces wreaking havoc in other sections of the country."[19] In 2008, Texas’s gross state product grew by 4.2%, while the national economy’s GDP grew by only 1.9%.[18] However, in her Biennial Revenue Estimate for the 2010-2011 fiscal term, Comptroller Combs predicted that Texas employment would decline until the fourth quarter of 2009 and warned that 2009 and the beginning of 2010 would underperform.[20]

In his State of the State Address for the 2008-2009 budget term, Governor Rick Perry pointed to the strength of Texas’s economy, noting that Texas added 1.2 million new jobs in the last five years, that 70% of new jobs created in the United States from November 2007 to November 2008 were created in Texas, and that despite facing a $10 billion deficit in 2002, Texas was operating with a surplus without having raised taxes on its citizens.[21]

However, on February 3, 2009, Lt. Gov. David Dewhurst and House Speaker Joe Straus signaled the need to reduce state spending by $500 million by the end of the fiscal year, citing “uncertain economic conditions” and the need to leave a “reasonable reserve in the rainy day fund” to avoid facing a deficit in 2011.[22] Anticipated incoming revenues included in the $80.1 billion budget for the year included federal funds, which the state had not yet received and were dependent on the outcome of the American Recovery and Reinvestment Act then being debated in Congress.[23] The 2008-2009 budget was also burdened by $2 billion in expenses related to hurricanes Ike, Dolly and Gustav.[24] The federal government was expected to reimburse the state for 75% of its costs related to the hurricane, but Governor Perry was seeking a 100% reimbursement.[25]

Budget background

See also: Texas state budget

Texas's fiscal year runs from September 1 to the following August 31 of an odd-numbered year (for example, September 1, 2008 - August 31, 2009.[26] Since 1978, the state constitution has required the State Comptroller to create an itemized estimate of the incoming revenue that will be available to the state for spending in the upcoming two-year fiscal period (biennium).[27] This estimate is submitted to the governor and the legislature and is used as a baseline to ensure that appropriations do not exceed incoming revenue.[28] Once an appropriation bill is agreed on by both houses of the legislature, it is sent to the State Comptroller for certification that there would be sufficient incoming revenue to cover the bill's appropriations.[29] If the Comptroller concludes that there is not enough money to cover the proposed spending, the bill is sent back to the legislature, where any spending in excess of anticipated revenue must be approved by a 4/5 vote in each house.[30] Once a bill is certified by the comptroller, the bill is sent to the governor for review and signature; the state constitution grants the governor a line-item veto, which he/she can use to cancel out specific provisions without having to veto the bill in its entirety.[31]

Budget figures, 2000-2009

The following table provides a history for Texas's budget and actual expenditures from 2000 to 2009.

Biennium term Estimated/budgeted Amount actually spent
2000-2001 $101.8 billion[32][33] $101.9 billion[34]
2002-2003 $114.1 billion[35] $115.9 billion[36]
2004-2005 $118.2 billion[37] $126.6 billion[38]
2006-2007 $138.2 billion[39] $145.1 billion[40][41]
2008-2009 $167.8 billion[42][43] n/a

Breakdown of sources of revenue

The following table breaks down the state budget by sources of revenue for the 2008-2009 term.[44]

Source of revenue Percentage of overall revenue
Tax collections 52.1%
Federal income 31.1%
Miscellaneous 9.8%
Licenses, fees and fines 7.9%

Breakdown of spending by area

The following table breaks down the state budget by areas of spending for the 2008-2009 term.[45]

Area of spending Percentage of overall spending
Education 44.4%
Health & Human Services 31.6%
Business & Economic Development 12.2%
Public Safety & Criminal Justice 6.2%
General Government 2.4%
Natural Resources 1.9%

Proposed budget for 2010-2011

  • To combat the economic downturn, Governor Perry stressed that all tools that could continue growth should be considered, "including implementing additional sales tax holidays."[46]
  • Governor Perry's proposals for the 2010-2011 fiscal term included the following.[47]
    • $260 million for the Texas Enterprise Fund;
    • 203.5 million for the Emerging Technology Fund;
    • $60 million for the Texas Film Incentive Program ;
    • $60 million for the Skill Development Fund;
    • $97 million for the Texas High School Project;
    • 622.5 million in teachers incentive and reward programs;
    • 645.7 million related to higher education programs;
    • $110 million for the Texas Grant Program for financial aid;
    • $28 million for community college financial aid;
    • $168.9 million for higher education incentive funding;
    • $10 million for nursing education;
    • $10 million for health and fitness programs for middle and high school students;
    • $150 million for disaster and emergency appropriations; and
    • $135 million for border security.

Budget transparency

The Texas Window on State Government page provides a searchable expenditures function for Texans. Specifically, it provides information on how much each agency spends and what vendors receive state funds. The database is updated nightly and is managed by the State Comptroller.

The following table is helpful in evaluating the level of transparency provided by the Texas Window on State Government.

Criteria for evaluating spending databases
State database Searchability Grants Contracts Line item expenditures Dept./agency budgets Public employee salary
Texas: Where the Money Goes Y
600px-Yes check.png
N
600px-Red x.png
Y
600px-Yes check.png
Y
600px-Yes check.png
N
600px-Red x.png
N
600px-Red x.png

For further information, see

Economic stimulus transparency

  • The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[48]
  • Texas were expected to receive an estimated $11,362,889,088.[49]

Support for creation of the database

In addition to the original sponsors and cosponsors of Texas House Bill 3430 (2007), various individuals and organizations promoted the creation of a public expenditures database.

State Comptroller Susan Combs had been one of the strongest advocates of transparency. In her words,
"Government spending is often seen as impenetrable and unknowable. Taxpayers have the absolute right to know how their money is being spent, and it is only with transparency that government can be held truly accountable. We are helping citizens with an easy way to examine state expenditures in one place without needing to contact multiple agencies."[50]

Andrew Moylan, Government Affairs Manager for the National Taxpayers Union (NTU), and David Williams, Vice President of Policy for the Council for Citizens Against Government Waste, wrote a letter that encouraged Texas lawmakers to enact legislation that would create a publicly searchable expenditures database. Likewise, Americans for Tax Reform (ATR) issued a press release to announce Texas House Bill 3430 (2007)'s unanimous passage through the House.[51][52] Grover Norquist, President of ATR, wrote legislators in the Texas Senate, urging them to vote for Texas House Bill 3430 (2007), and an additional letter when the Texas Senate Finance Committee took the bill into consideration.[53][54]

Public employee salary information

See also: Texas state government salary

See also

External links

Additional reading

References

  1. Texas Legislative Budget Board, Budget 101
  2. Legislative Budget Board, History
  3. Texas Budget Source, Budget Breakdown
  4. Texas Ahead, Economic Outlook, February 6, 2009
  5. Texas Ahead, Economic Outlook, February 6, 2009
  6. Texas Ahead, Economic Outlook, February 6, 2009
  7. Texas Ahead, Economic Outlook, February 6, 2009
  8. Texas Ahead, Economic Outlook, February 6, 2009
  9. Texas Ahead, Economic Outlook, February 6, 2009
  10. Texas Ahead, Economic Outlook, February 6, 2009
  11. Texas Ahead, Economic Outlook, February 6, 2009
  12. The Austin Chronicle, State Agencies Asked for Savings, February 2, 2009
  13. Austin News, Texas Revenue Falls Short $9.1 billion, January 13, 2009
  14. Texas Comptroller Susan Combs 2010-2011 Biennial Revenue Estimate, January 12, 2009
  15. Houston Chronicle Agences Asked to Submit Budget Cuts, February 2, 2009
  16. Texas Comptrollr Susan Combs 2010-2011 Biennial Revenue Estimate, January 12, 2009
  17. Texas Comptrollr Susan Combs 2010-2011 Biennial Revenue Estimate, January 12, 2009
  18. 18.0 18.1 TexasAhead, Comptroller's Economic Outlook, January 30, 2009
  19. Texas Comptroller Susan Combs 2010-2011 Biennial Revenue Estimate, January 12, 2009
  20. Texas Comptroller Susan Combs 2010-2011 Biennial Revenue Estimate, January 12, 2009
  21. Office of the Governor Rick Perry, Gov. Perry Addresses the State of the State of Texas, January 27, 2009
  22. The Dallas Morning New, Texas Agences Asked to Cut $500 Million, February 3, 2009
  23. Houston Chronicle, Agences Asked to Submit Budget Cuts, February 2, 2009
  24. Houston Chronicle, Stated Leaders Authorize Payments to Vendors, February 5, 2009
  25. Houston Chronicle, Stated Leaders Authorize Payments to Vendors, February 5, 2009
  26. Senate Research Center, Budget 101
  27. Legislative Budget Board, History
  28. Senate Research Center, Budget 101
  29. Senate Research Center, Budget 101
  30. Legislative Budget Board
  31. Senate Research Center, Budget 101
  32. Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
  33. Legislative Budget Board, Fiscal Size-up, March 2008
  34. Legislative Budget Board, Fiscal Size-up, January 2002
  35. Legislative Budget Board Fiscal Size-up, 2002-2003 Biennium, January 2002
  36. Legislative Budget Board, Fiscal Size-up, March 2008
  37. Legislative Budget Board, Fiscal Size-up, 2004-2005 Biennium, Dcember 2004
  38. Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
  39. Legislative Budget Board, Fiscal Size-up 2006-207 Biennium, December 2005
  40. Texas Budget Source, Fast Facts about Texas Spending
  41. Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
  42. Texas Budget Source, Fast Facts about Texas Spending
  43. Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
  44. Texas Budget Source, Budget by Area
  45. Texas Budget Source, Budget by Area
  46. Governor's Budget 2010-2011, January 27, 2009
  47. The following figures were all taken from Governor Perry's 2010-2011 budget proposals:
  48. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  49. [1]
  50. Transparency Quotation, Susan Combs
  51. Taxpayers Support Creating Grant and Contract Database in Texas, April 2007
  52. Two Cheers for Fiscal Transparency in Texas, May 2007
  53. Americans for Tax Reform, "Letter to Texas senators urging passage of Texas House Bill 3430 (2007)," May 2007
  54. Americans for Tax Reform, "Letter to Texas senators urging passage of Texas House Bill 3430 (2007) upon its consideration by the Senate Finance Committee," May 2007