The Austin Chronicle

Budget: Artificial Limits

Despite economic boom, Lege looks to restrict spending

By Richard Whittaker, January 9, 2015, News

Every session, the two chambers of the Legislature draft their own state budgets, but the houses alternate which name goes on the final accounting. This time around, the blood and blame will be on the lower chamber, as the Legislature inches toward passing House Bill 1, the 2015-16 state spending bill.

Unfortunately, three key leaders in the budget process have departed. Senate Finance Committee Chair Tommy Williams, R-the Woodlands, has retired. So has Comptroller Susan Combs, replaced by Williams' former chambermate, Glenn Hegar. Meanwhile the House starts deliberations without five-time Appropriations Committee chair, respected Waxahachie Republican Jim Pitts. Rep. Donna Howard, D-Austin, said, "The loss of Jim Pitts and his institutional memory is going to make a big hole for us on the House side." Howard's fellow Travis County Democrat, House Appropriations Committee Member Dawnna Dukes, agrees that there is "a void of leadership." However, she also sees an opportunity for individual legislators to provide not just new solutions to old problems, but to start the discussion about emerging issues.

Inevitably in Texas, the fiscal conservatives control the debate. In December, the Legislative Budget Board adopted a forecast of 11.68% state economic growth – much lower than most estimates (in the mid-teens). Because the estimate sets a "cap" on much budgetary growth, it severely limits lawmakers' abilities to fill spending gaps. Simultaneously, there is growing concern about the current low price of gas – great for consumers, but terrible for state coffers so dependent on hydrocarbon taxes. And there remain bills to be paid and deferred maintenance to cover. With no obvious national ambitions (unlike his predecessor), Governor-elect Greg Abbott is already talking about increased infrastructure investment, including $4 billion for roads. Then there's a battle brewing between fiscal conservatives in D.C. and fiscal conservatives in Texas over the Children's Health Insurance Program. Federal matching funds, worth $7 for every $3 Texas spends, run out in September, and if congressional Republicans don't add more cash, it could blow a huge hole in the state budget. (Medicaid expansion, although it would bring Texas federal billions and insure millions of Texans, is off the table because it's linked to "Obamacare.")

And in the background looms the biggest budgetary roadblock, the ongoing legal challenge to the school finance system, now headed to the state Supreme Court. Dukes argued there was political and popular consensus for school finance reform before that final ruling. However, she wondered, "Will that be acceptable to the governor, who has line item veto?"

Until that question is resolved, Sen. Kirk Watson, D-Austin, remains unsure whether a full budget will be passed in the regular session. He predicts the traditional "bumper-sticker talk" about tax cuts, especially from the massive class of freshmen. His hope is that, as they move beyond conservative rhetoric to real budget problems, they'll focus on unnecessary diversions and loopholes. He said, "When I first started talking about budget transparency, I was the lone voice in the wilderness. But now everyone wants to be talking about it.

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