Texas state budget (2010-2011)

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The Texas State Legislature passed and Gov. Rick Perry signed on June 19, 2009 a $182 billion 2-year budget (Sept.1, 2009 to Aug. 31, 2011) with a projected $9 billion Rainy Day Fund. The FY 2010-2011 biennium budget of $182.3 billion spent $1.6 billion less in general revenue than the previous biennium. Comptroller Susan Combs acknowledged that Texas would show a $1.3 billion deficit at the end of the budget year[1], which was up dramatically from the July 2010 estimate of a shortfall of up to $18 billion dollars.[2] Others estimated the shortfall at $28 billion.[3]

It was estimated that the state faced a budget shortfall of between $15 billion and $27 billion over the coming two years, depending on who was doing the calculation.[4] On May 16, 2011, the Senate approved use of approximately $4 billion from that Rainy Day Fund to cover shortfalls in the then-current state budget.[5]

In per capita spending by state, Texas ranked 50th in the nation, meaning there was likely less fat to trim when making budget cuts in Texas than in other states.[6]

Texas had a total state debt of $81,128,512,515 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[7]

2011 State spending & deficit in billions[8]
Total spending Healthcare Education Protection Nat resources Econ dev Regulatory General government Stimulus
$182 $59.7 $75.5 $10.8 $3.5 $20.7 $.84 $5.4 $12
2011 Local spending & deficit in billions[9]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$153.3 $1.5 $13.3 $45.3 $3.1 $12 $10 $255

Budget background

See also: Texas state budget

The Texas state budget was 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 was implemented over the next two years.[10] By constitutional mandate, Texas operates under budgets set for two-year periods.[11]

Texas' fiscal year runs from September 1st to the following August 31st of an odd-numbered year (for example, September 1, 2009 - August 31, 2011.[12] Since 1978, the state constitution had required the State Comptroller to create an itemized estimate of the incoming revenue that would be available to the state for spending in the upcoming two-year fiscal period (biennium).[13] This estimate was submitted to the Governor and the legislature and was used as a baseline to ensure that appropriations did not exceed incoming revenue.[14] Once an appropriation bill was agreed on by both houses of the legislature, it was sent to the State Comptroller for certification that there would be sufficient incoming revenue to cover the bill's appropriations.[15] If the Comptroller concludes that there was not enough money to cover the proposed spending, the bill was sent back to the legislature where any spending in excess of anticipated revenue must be approved by a 4/5 vote in each house.[16]

Once a bill was certified by the Comptroller, the bill was sent to the Governor for review and signature; the state constitution grants the Governor a line-item veto by which he can use to cancel out specific provisions without having to veto the bill in its entirty.[17]

The regular legislative sessions begin the second Tuesday in January every odd-numbered year and convene for not more than 140 days. The governor may call the legislature into special session as deemed appropriate. Special sessions were limited to issues specifically stated in the governor’s call and may meet up to the 30-day maximum.[18]

The Governor submits a recommended budget the 30th day of the regular legislative session. The Legislative Budget Office was responsible for fiscal notes, not the Executive Budget Office. Legislative Budget Board (the legislature’s budget agency) coordinates statewide performance measures and compiles reports.[19]

The state did had a constitutional cap on spending, using the growth of the state's economy, which was determined by the Legislative Budget Board (run by the Gov, Lt Gov, Speaker and Comptroller).[20] The calculation and methodology aren't as precise as the population plus inflation limit used by other states, and some were working to get such a proposal on the Texas ballot.[21]

In January of odd-numbered years. at the start of the legislative session, the comptroller provides an official estimate of state revenue for the coming two years, and that figure was the amount lawmakers can spend when they write the state budget. At any time, the comptroller may update that estimates and they often face pressure to did so late in the legislative session, when budget-writers need additional dollars.[22] Sen. Kirk Watson sent the comptroller a letter in September 2010 requesting an update to her official estimate of how much money the state would collect during the current two-year budget cycle as well as a forecast of the state's revenue outlook over the next two years.[22]

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[23][24] $101.9 billion[25]
2002-2003 $114.1 billion[26] $115.9 billion[27]
2004-2005 $118.2 billion[28] $126.6 billion[29]
2006-2007 $138.2 billion[30] $145.1 billion[31][32]
2008-2009 $167.8 billion[33][34] n/a

Breakdown of Sources of Revenue

The following table breaks down the state budget by sources of revenue for the 2008-2009 term.[35]

Source of Revenue Percentage of Overall Revenue
Tax collections 52.1%
Federal income 31.1%
Miscellaneous 9.8%
Licenses, Fees & 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.[36]

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%

Accounting principles

See also: Texas government accounting principles

The Texas State Auditor's Office (SAO) was the independent auditor for Texas state government. The SAO operates with oversight from the Legislative Audit Committee (LAC), a six-member permanent standing committee of the Texas Legislature. The LAC consists of the Lieutenant Governor, the Speaker of the House of Representatives, one member of the Senate appointed by the Lieutenant Governor, and the chairmen of the Senate Finance Committee, House Appropriations Committee and the House Ways and Means Committee.[37]

The Institute for Truth in Accounting (IFTA) rates Texas “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Texas' CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[38] Texas' CAFRs were annual publications of the Texas Comptroller of Public Accounts. Susan Combs was elected Texas Comptroller of Public Accounts in 2006. The Comptroller was the chief steward of the state’s finances, acting as tax collector, chief accountant, chief revenue estimator and chief treasurer for all of state government.[39][40]

Credit Rating Fitch Moody's S&P
Texas[41] AA+ Aa1 AA+

o Despite the state's deficit, it had the second highest bond rating from Standard & Poor's.[42]

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 which vendors receive state funds. The database was updated nightly, and was managed by the State Comptroller, Susan Combs.[43]

The following table was 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

Legislation

State Sen. Kirk Watson had said that he'll propose legislation that would publish the state budget five days before voting, allowing one work week, instead of the current custom of publishing it 48 hours before the vote.[44] The proposal had been endorsed by the Texas Public Policy Foundation and the Center for Public Policy Priorities.[45][46]

See also: Evaluation of Texas state website

Economic stimulus transparency

The state would receive approximately $3 million from the federal government under HR 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[47] The directors of a $2.3 million stimulus-funded summer youth program claimed the program created or retained 680 jobs but an audit found that only 124 were created.[48] Additionally, the TxDOT, had only spent 38 percent of it's $2.25 billion in funding, because it did not had enough "shovel-ready" projects.[49][50]

Another agency under fire for their stimulus spending was the Texas Port Arthur Housing Authority. Port Arthur would be losing $725,546 in stimulus funds after failing to keep sound financial controls, violating procurement regulations, failing to meet stimulus reporting requirements and not getting environmental clearance before beginning site work on two low income level development projects.[51]

At least a dozen Texas public officials who voted against the stimulus, later applied for grants from the program.[52]

  • Texas established an economic recovery website to show how legislators and government officials in Texas were spending Federal funds.[53]

Independent transparency sites

The Texas Public Policy Foundation had created Texas Budget Source an independent website focused on Texas's budget and transparency. In addition to state transparency information, it posts data about local and school district transparency.[54]

Public employee salary information

The Houston Chronicle had complied a list of Houston public employee salaries in 2007,[55] and News 4 had provided school superintendent salaries[56] across the state for 2007-2008.

See also

Texas government sector lobbying

Texas public pensions

Texas state budget

External links

References

  1. The Texas Tribune "Documents Reveal Deficit in Texas State Budget" Aug. 18, 2010
  2. Cite error: Invalid <ref> tag; no text was provided for refs named daunting
  3. Cite error: Invalid <ref> tag; no text was provided for refs named ax
  4. The Wall Street Journal "Budget Battles Roil Straitened States" Feb. 25, 2011
  5. Businessweek "Texas Senate OKs nearly $4B from Rainy Day Fund" May 16, 2011
  6. The Dallas Morning News "How bad was the budget crunch?" Oct. 24, 2010
  7. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  8. Texas Budget Source Spending, State Budget by Area
  9. USA Spending, State Guesstimated* Government Spending
  10. Texas Legislative Budget Board, Budget 101
  11. Legislative Budget Board, History
  12. Senate Research Center, Budget 101
  13. Legislative Budget Board, History
  14. Senate Research Center, Budget 101
  15. Senate Research Center, Budget 101
  16. Legislative Budget Board
  17. Senate Research Center, Budget 101
  18. Texas State Senate, "Citizen Handbook: How the Texas Legislature Works," February 2007
  19. National Association of Budget Officers, "Budget Processes in the States," 2008
  20. Comparison of Spending Limits
  21. Texas Monthly
  22. 22.0 22.1 The Austin American-Statesman "Lawmakers seek answers on Texas' budget outlook" September 8, 2010
  23. Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
  24. Legislative Budget Board, Fiscal Size-up, March 2008
  25. Legislative Budget Board, Fiscal Size-up, January 2002
  26. Legislative Budget Board Fiscal Size-up, 2002-2003 Biennium, January 2002
  27. Legislative Budget Board, Fiscal Size-up, March 2008
  28. Legislative Budget Board, Fiscal Size-up, 2004-2005 Biennium, Dcember 2004
  29. Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
  30. Legislative Budget Board, Fiscal Size-up 2006-207 Biennium, December 2005
  31. Texas Budget Source, Fast Facts about Texas Spending
  32. Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
  33. Texas Budget Source, Fast Facts about Texas Spending
  34. Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
  35. Texas Budget Source, Budget by Area
  36. Texas Budget Source, Budget by Area
  37. Texas State Auditor's Office Web site, accessed November 13, 2009
  38. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  39. Texas Comptroller of Public Accounts Web site, accessed November 13, 2009
  40. CAFRs
  41. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  42. Businessweek "California, Texas, and State Workers' Pay" April 28, 2011
  43. Texas Window on State Government
  44. Krik Watson Newsroom, Count to Five Before Voting, Jan. 9, 2011
  45. Texas Budget Source, Watson wants five days before final budget vote, Jan. 6, 2011
  46. Austin American-Statesman, Watson’s proposed budget rule draws praise from right and left, Jan. 7, 2011
  47. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  48. Texas Watchdog, Jobs estimates in federal stimulus program 5 times true figure: Audit, Aug. 3, 2010
  49. Texas Watchdog, Shovel-ready? TxDOT stimulus spending at 38 percent, Sept. 28, 2010
  50. H.R. 1586
  51. Texas Watchdog, Port Arthur Housing Authority violated competitive bidding, other stimulus rules, must return $725K federal stimulus grant, Jan. 31, 2011
  52. Texas Watchdog, Texas stimulus opponents later sought stimulus funds for their district, Oct. 18, 2010
  53. Texas Stimulus Fund
  54. www.texasbudgetsource.com,
  55. Houston public employee salaries in 2007
  56. school superintendent salaries