Straus' Budget Stretch

On Tuesday Republican Speaker Joe Straus told the House Appropriations Committee that he is looking for "a balanced, no-new-taxes state budget." However, committee member Rep. Dawnna Dukes, D-Austin, warned that when it comes to filling an $18 billion budget hole, "It needs to be a balanced approach. We can't take one thing off the table."

Not according to Straus, whose solution to the budget gap was a roll-call of cuts and deferred maintenance. He told the committee:

Perhaps you will consider the impact of imposing a blanket moratorium on all new programs and services that require general revenue funding. … Should the state stop issuing bonds because of the on-going costs associated with debt? … Forty-two other states have implemented unpaid furloughs to save on salary costs. Others have moved to a four day work week at some agencies in order to save on operating costs. I hope you will look at what other states are doing and determine whether any of those options would be feasible in Texas.

What makes this all the more disappointing is that Straus had won points in January for announcing four select committees to think outside the box on the deficit.

With the US coming out of the recession, it seems odd that he was so doom and gloom, but the reality is that Texas has a structural deficit (in layman's terms, not raising enough taxes to cover this state's meager services.) The biggest single hole has come from the epic fail that is the 2007 business margins franchise tax reform, which has dramatically underperformed compared to initial forecasts. Even Rep. Bill Zerwas, R-Richmond, proposed sunsetting the tax and instructing the comptroller to start researching a replacement that would actually work. Unfortunately, that bill died, leaving Texas a serious financial problem.

Dukes compared the current situation to 2003's $10 billion deficit (again, partially created by previous tax cuts.) "We had to look at major and drastic cuts, and it hurt the state," she said. The 'cut it to the bone' approach also hurt the GOP: That was the year that their 88-seat majority started to collapse. "Even amongst their own folks, the cuts were too deep."

Straus' no-new-tax statement places him out of step with his fellow moderate (and not-so-moderate) Republicans, many of whom talked openly about reforming the tax base last session. However, it places him closer than ever to Gov. Rick Perry and his groundless triumphalism about the Texas economy. "C'mon, we balanced our budget with 11 to 13 billion out of the stimulus," said Dukes. "If our economy was that great, why did we need that money?"

The one member of the Republican leadership who is coming out of this with any credibility is Appropriations Committee Chair Jim Pitts, R-Waxahachie, who was less gung-ho than Straus about saving the state through cuts. There is some simple political reality to his statements (if he wants to tap the Rainy Day Fund, he'll need Democratic votes to reach the two-thirds majority required) but also some bravery. Pitts proposed looking at extending gambling, only weeks after the House Republican caucus rejected calls from House Democratic Caucus Leader Jim Dunnam, D-Waco, for an interim ad hoc committee on the issue. "It took courage for [Pitts], as a Republican member, to lay that out," said Dukes.

Ultimately, the Austin rep praised her chairman for accepting bipartisan realities. She said, "Jim knows that, as the architect of this appropriation bill in the 82nd session, he is going to need to bring people from across party lines, and he knows that if it is a one party fix, it will be very hard."