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Last week, Appropriations Chair Jim Pitts publicly stated that he expects the gap in the 2010-11 budget to hit $18 billion. While there are many causes for this deficit, including the long-term structural deficit conceived and implemented by Governor Perry and Tom Craddick and recent shortfalls in sales tax collections, there is only one major conclusion: Texas lawmakers will have to adopt a multi-faceted approach to balancing the budget next session.
House Speaker Joe Straus took an unusual (many observers say "unprecedented") step of addressing the Appropriations Committee in person from the committee dais. From his perch, he flatly declared that the budget gap created by seven years of Perry-Craddick budgeting must be filled without a tax bill -- not even a tax bill that closes loopholes and other gimmicks used by big business to force higher taxes on working Texans. And while it is easy to rally quick political support by banning all tax bills, it really doesn't hold water in the long-term. Case-in-point: in 2003, Texas faced a $15.6 billion revenue shortfall. Republicans cut 250,000 children of working families off of CHIP, deregulated college tuition, raised fees for everything from hunting licenses to license plates, pushed the costs of state government down to the local level as unfunded mandates, and bonded everything that didn't move. The Republican leadership failed to address the real causes of the budget gap in 2003 and again in 2006 when they passed the new "margins" tax. And evidently that is the Republican template for 2011.
Straus also discussed a four-day workweek and required furloughs for state employees. Other states, such as New York and California, have considered or implemented these measures – with less than shining results. Shortened weeks and less pay mean less productivity, less money in circulation in our local economies, and longer waits for essential services. Of course, it's no secret why Straus is following in his predecessor's footsteps: he's faced with serious trouble among his fellow Republicans. As Empower Texans commentator Robert Pratt put it: "It appears to me that Straus has figured out that if he wants to comfortably be re-elected as Speaker of the Texas House, he had better start pushing the agenda of the conservative caucus, at least when it comes to taxes and spending."
Interestingly, Chairman Pitts brought up the issue of gambling as part of a mix of "revenue enhancements" to balance the budget. And although Straus has pledged to stay out of the gambling debate and recuse himself from making any decisions as speaker that could further enrich his family, his new pledge to take tax restructuring off the table certainly seems to make gambling as a more serious option.
House Democrats have always taken a sensible approach to balancing the budget, especially during tough economic times. We believe in smart investments calculated to encourage prosperity by helping Texans pursue their dreams and provide for their families. Even Wall Street recognizes that companies that take a limited and more-targeted approach to cost-cutting and layoffs tend to do better in economic recoveries than those that slash costs and employment sharply and across the board. As always, Democrats will fight to cut unnecessary spending, such as the $10,000 a month Governor Perry wastes on his rental mansion, ineffective expenditures from the Texas Enterprise Fund, and cases of fraud against the state government. These simple, common-sense changes would go a long way to reduce costs and save dollars in future bienniums.
What Texans are seeing now is what we have seen in the legislature for some time: a failure of leadership that presents us with false choices in an attempt to benefit special interests. We ought to--and we will--demand more of the House leadership in January.
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