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State Lawmakers Faced With $15 Billion Shortfall

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The Texas State Capitol building. (credit: Jeff Haynes/AFP/Getty Images)

The Texas State Capitol building. (credit: Jeff Haynes/AFP/Getty Images)

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AUSTIN (AP) – Texas lawmakers will have $72.2 billion for general purpose spending over the next two years, a $7.8 billion drop from the last state budget, according to figures released Monday by state Comptroller Susan Combs.

But when lawmakers take into account some $7 billion in federal stimulus money that will not be available to them this year, the shortfall is at least $15 billion.

The deficit also does not include expected increases in people on Medicaid rolls and demand for education, issues the Texas Legislature will begin to deal with when the session opens on Tuesday. The numbers released Monday cover the 2012-2013 budget, and do include a $4.3 billion deficit in the current state budget.

“The recent recession has had its impact on the state revenue outlook as major revenue sources such as the sales tax generated less money in the last couple of years,” Combs told reporters. “While we have turned the corner to an economic recovery, the revenue estimate I’m releasing today is for moderate growth.”

Dick Lavine, an analyst for the liberal Center for Public Policy Priorities, said the true shortfall is closer to $28 billion if lawmakers intend to maintain spending at current levels and taking into account enrollment growth, cost increases and other variables that would be required to keep services at their current levels.

The estimate, which gives the Legislature a roadmap as they embark on the budget-writing process, has for months been the topic of election-year rhetoric with Republican incumbents trying to downplay the severity of the budget mess.

The Texas constitution requires that the budget be balanced and the new supermajority of conservative legislators elected in November have vowed not to raise taxes.

Because of the recession, state tax receipts for the 2010 budget year fell behind projections by about $2 billion and are expected to be down even more at the end of the current fiscal year. The state is also on the hook to fill a hole of about $11 billion left by federal stimulus money and other state savings that were used last year but are no longer available. Added cost pressures from increased enrollment in public schools and health care programs for the poor and disabled, and spikes in health care costs will compound the massive hole.

The shortfall will be the driving force behind almost every decision the Legislature makes when it convenes in Tuesday. From state parks and highways to health care programs for the poor and disabled, state agencies are bracing for the hatchet to fall. But with more than half of the state budget dedicated to education and health care services, those areas are likely to sustain the most severe cuts.

Republican House Speaker Joe Straus, who is in the middle of a fight to retain his post, has raised the specter of unpaid furloughs for state employees.

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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