Texas Comptroller Says Cuts Will Not Solve Deficit

AUSTIN (AP) – The Texas comptroller told the House Appropriations Committee on Thursday that she can’t imagine solving the current budget crisis through cuts alone.

Susan Combs spoke at a hearing designed to be a reality check for conservatives who think the budget can be balanced by slashing state services. The current two-year budget cycle is $4.3 billion short and, under the Texas Constitution, that deficit must be made up by Aug. 31.

The state is also facing another projected $27 billion shortfall in the next two-year budget, but that was not the subject of Thursday’s hearing.

Committee Chairman Jim Pitts, a Waxahachie Republican, asked Combs to testify after he introduced a bill to spend $4.3 billion from the state’s Rainy Day Fund to cover the deficit. In opening Thursday’s hearing, he tried to communicate the gravity of the problem, which left lawmakers silent and stone-faced.

“The budget adopted by the Legislature last session, and signed by the governor, exceeded the comptroller’s measure of available revenue,” Pitts said. “This committee, and this Legislature, has very limited options: the use of the Rainy Day Fund, further reductions … or deferring payments into the next biennium.”

While Combs never called on the committee to dip into the Rainy Day Fund, she presented a detailed history of how it had been used in the past and how spending it would not hurt the state’s credit rating. She also examined the other options.

“I don’t know how you can get to $4.3 billion in cuts,” Combs said. She warned that even if the recession ends, that doesn’t mean revenues will return to levels seen in 2005, when the Texas economy was booming.

When some lawmakers tried to compare the situation to 2003, the last time they tapped the Rainy Day Fund, the Democratic vice chair chastened them.

“I wish this was 2003. But if anyone tries to compare 2003 to what we are going through now, and saying they are similar, you are not facing reality,” said state Rep. Sylvester Turner, D-Houston. “This situation is far worse.”

Combs acknowledged that the recession that began in 2007 was the worst since the Rainy Day Fund was created. But she warned that lawmakers should think about the next four years, not just the next two, when considering how much of the fund to spend or how to fix a business tax that has never raised as much money as expected.

She also pointed out that if lawmakers did not make funds available to cover the deficit, she is obligated under the state constitution to borrow money from the Rainy Day Fund to pay the state’s bills.

Conservative groups, including tea party activists, have consistently called on lawmakers to leave the Rainy Day Fund alone. Some have threatened legislators that they will face conservative opponents in the 2012 election if they tap the fund.

Pitts was clearly laying the groundwork to pressure the 101-member Republican supermajority in the Texas House to spend some of the Rainy Day Fund. Pitts’ bill would require three-fifths of the lawmakers present to authorize using it.

Some state Senate leaders have also expressed a readiness to tap the fund. Gov. Rick Perry said Thursday he remains opposed to spending the fund, “which would only delay tough decisions and leave us unprepared to handle bigger emergencies in the future.”

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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  • JT

    isn’t this precisely what the “Rainy Day” fund is for – the worst recession since the Great Depression & sales-tax revenues in the tank as a result?

  • RE

    In all of the hysteria about cutting budgets, I am not seeing any discussion about some rather important and core issues. Our esteemed leaders have moaned and complained about unfunded mandates from the Feds for years. But now, it is the state who is not changing or reducing mandates, just cutting the money to cover them. That means that the counties, cities, and school are going to still be responsible for meeting state mandated requirements but won’t have the revenue to meet them. Listen to the words that the school administrators are saying.

    How about the legislature start looking at some of the laws that THEY enacted and start cutting some of that pork from those first. I would prefer that they cut some of the “special benefits” for energy and insurance companies and some of the other profit making lobbies first before they gut education and health services and the like. There is a lot of lost revenue tied up in these special situations.

  • Lost Remote

    How about all Texas city, county and state employees take a 5 to 10% across the board salary cut? No one has talked about that. At least some salary funds will be saved, but the people will still have jobs. All these financial problems have affected millions of Americans nationwide that now have no jobs, now it’s the turn of state and federal employees to feel the pinch without actually losing their jobs. I don’t think that’s too much to ask. It’s too bad it may have to be done, but it’s better than being on the street.

    • dan39johnson

      How about the legislators, state supreme court, and the top 4 layers of texas government administration take a 50% cut in salaries? THEY created the disaster straight out of fantasy.

      You want cuts? you first. You cut your pet programs and then I’ll cut mine. You raise taxes on your people, I’ll raise taxes on mine, until balance is achieved.

      Be the first time in two decades each party took responsibility for their own actions.

      You cut the people that built this high tech, high production nation, retirees, health care, and I say it’s torches and pitchfork time. cutting to blood and bone is an extremely bad idea with dangerous consequences.

    • Randal

      First off I am not a state employee. I would like to say though that you idea is ridiculous. Many state employees have not received even a cost of living increase for the last 3 years so they are already behind the inflation curve. Second a 5 to 10 percent cut means at min. 2k a year out of their already low salary. TX does not compensate their state employees anywhere near what some states do (in other words we are WI). Health insurance benefits kick in at 65 and there is no pension plan. Employees contribute to a annuity that is matched by the state at .50 on dollar for first 4%. If you honestly want your cuts then I am sorry hope you can survive with no state services for a while because they will walk off the job.

  • Mike dallas texas

    How about legalizing Casinos along the Texas Gulf Coast and regulate and tax them , then put some more taxes on wine , beer and hard alcohol sales , also fees such as automobile plates , and State Inspections can raise some funds, also the schools can cut out extraciricular activities and get back to basics of school teaching, In cases where a person is in jail for non violent crimes get them out on parole and let them work and pay taxes, any State Agency that is not paying its way , needs to increase the fees for those services to make the Agency at least break even budgetwise ,

    • dan39johnson

      Gambling doesn’t CREATE any wealth, just concentrates it to a small group. It is not like a factory which can create 10 times as much wealth as it costs.

      Gambling? you might as well stare at the tv for hours on end and pitch $100 bills into the fireplace.

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