Texas state budget
From Sunshine Review
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Texas has weathered the economic downturns better than most states with the Texas State Legislature passing and Gov. Rick Perry signing on June 19, 2009 a 2-year budget (Sept.1, 2009 to Aug. 31, 2011) with a projected $9 billion Rainy Day Fund. The FY 2010-2011 biennium budget of $182.3 billion spends $1.6 billion less in general revenue than the previous biennium. Gov. Perry congratulated the Legislature for passing the budget saying, “The Legislature has done a commendable job in reducing the general revenue appropriation to live within the Comptroller’s revenue estimate issued in January," and only used his line-item veto power to cut $97.2 million in general revenue and $288.9 million from all funding sources. [1]
Gov. Perry pointed out, “In light of the economic downturn affecting the nation, this session we continued to make wise choices, such as cutting taxes on 40,000 small businesses and maintaining a multi-billion dollar balance in our Rainy Day Fund that have helped our state sustain its overall economic strength. These prudent and fiscally conservative decisions continue to pay off for our taxpayers.”[2]
"The state is likely to face severe budget constraints, not just today, but for a long time into tomorrow," said Dale Craymer, chief economist for the business-backed Texas Taxpayers and Research Association. Stimulus money "allowed us to buy time and to push the problem a little farther out," said Craymer, who served as budget chief for the late Gov. Ann Richards. "Next session (2011), we're going to have severe challenges." Indeed, lawmakers are spending slightly less in state money than they did in the budget they wrote two years ago, but the federal money staved off drastic cuts. "We made a sound budget based on the fact that the economy won't get worse but it won't get a lot better in the near future," he said. Former House Appropriations Committee chief Talmadge Heflin, R-Houston, said taking $12 billion in stimulus funds "could come back to bite" if lawmakers aren't willing to cut spending next session. "We could have as much as a $15 billion gap to fill," said Heflin, now with the conservative Texas Public Policy Foundation. Craymer of the business research group guesses the gap will be $13 billion. While most could be filled by draining the rainy day fund, the politics could be tricky, he said, because two-thirds of both the House and the Senate have to vote to spend it. [3]
The Texas Comptroller's Office of Public Accounts reports its estimate that, "the state will have $77.1 billion available for general purpose spending in the 2010-11 biennium, 10.5 percent below the corresponding amount of funds availablefor 2008-09. Tax collections in 2010-11 will generate $68.5 billion; and non-tax revenues will produce an additional $8.2 billion. Factoring in the estimated $2.1 billion ending balance carried forward from 2008-09, these three sources total $78.7 billion. Taking all state revenue sources into account, the state is expected to collect $167.7 billion in revenue for all state funds in 2010-11."[4]
[edit] Budget Background
The Texas state budget is implemented for two year durations by the Legislative Budget Board. Agencies develop their appropriations requests in the first year, the legislature approves the General Appropriations Act in the second year, and the budget is implemented over the next two years.[5] By constitutional mandate, Texas operates under budgets set for two-year periods.[6]
Texas' fiscal period runs from September 1st to the following August 31st of an odd-numbered year (for example, September 1, 2009 - August 31, 2011.[7] Since 1978, the state constitution has required the State Comptroller to create an itemized estimate of the incoming revenue that will be available to the state for spending in the upcoming two-year fiscal period (biennium).[8] This estimate is submitted to the Governor and the legislature and is used as a baseline to ensure that appropriations do not exceed incoming revenue.[9] Once an appropriation bill is agreed on by both houses of the legislature, it is sent to the State Comptroller for certification that there will be sufficient incoming revenue to cover the bill's appropriations.[10] If the Comptroller concludes that there is not enough money to cover the proposed spending, the bill is sent back to the legislature where any spending in excess of anticipated revenue must be approved by a 4/5 vote in each house.[11]
Once a bill is certified by the Comptroller, the bill is sent to the Governor for review and signature; the state constitution grants the Governor a line-item veto by which he can use to cancel out specific provisions without having to veto the bill in its entirty.[12]
The regular legislative sessions begin the second Tuesday in January every odd-numbered year and convene for not more than 140 days. The governor may call the legislature into special session as deemed appropriate. Special sessions are limited to issues specifically stated in the governor’s call and may meet up to the 30-day maximum.[13]
The Governor submits a recommended budget the 30th day of the regular legislative session. The Legislative Budget Office is responsible for fiscal notes, not the Executive Budget Office. Legislative Budget Board (the legislature’s budget agency) coordinates statewide performance measures and compiles reports.[14]
[edit] Budget Figures, 2000-2009
The following table provides a history for Texas's budget and actual expenditures from 2000 to 2009.
| Biennium Term | Estimated/Budgeted | Amount Actually Spent |
|---|---|---|
| 2000-2001 | $101.8 billion[15][16] | $101.9 billion[17] |
| 2002-2003 | $114.1 billion[18] | $115.9 billion[19] |
| 2004-2005 | $118.2 billion[20] | $126.6 billion[21] |
| 2006-2007 | $138.2 billion[22] | $145.1 billion[23][24] |
| 2008-2009 | $167.8 billion[25][26] | n/a |
[edit] Breakdown of Sources of Revenue
The following table breaks down the state budget by sources of revenue for the 2008-2009 term.[27]
| Source of Revenue | Percentage of Overall Revenue |
|---|---|
| Tax collections | 52.1% |
| Federal income | 31.1% |
| Miscellaneous | 9.8% |
| Licenses, Fees & Fines | 7.9% |
[edit] Breakdown of spending by area
The following table breaks down the state budget by areas of spending for the 2008-2009 term.[28]
| Area of spending | Percentage of Overall Spending |
|---|---|
| Education | 44.4% |
| Health & Human Services | 31.6% |
| Business & Economic Development | 12.2% |
| Public Safety & Criminal Justice | 6.2% |
| General Government | 2.4% |
| Natuaral Resources | 1.9% |
- See Texas state budget (2008-2009) for more information.
[edit] Accounting Principles
The Texas State Auditor's Office (SAO) is the independent auditor for Texas state government. The SAO operates with oversight from the Legislative Audit Committee (LAC), a six-member permanent standing committee of the Texas Legislature. The LAC consists of the Lieutenant Governor, the Speaker of the House of Representatives, one member of the Senate appointed by the Lieutenant Governor, and the chairmen of the Senate Finance Committee, House Appropriations Committee and the House Ways and Means Committee.[29]
The SAO is authorized, by Chapter 321, Texas Government Code, to perform audits, reviews, and investigations of any entity receiving state funds, including state agencies and higher education institutions. Audits are performed in accordance with generally accepted government auditing standards, which include standards issued by the American Institute of Certified Public Accountants. The SAO audit reports are published online. John Keel has been State Auditor since 2004.[30]
The Institute for Truth in Accounting (IFTA) rates Texas “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Texas' CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[31] Texas' CAFRs are annual publications of the Texas Comptroller of Public Accounts. Susan Combs was elected Texas Comptroller of Public Accounts in 2006. The Comptroller is the chief steward of the state’s finances, acting as tax collector, chief accountant, chief revenue estimator and chief treasurer for all of state government.[32]
| Credit Rating | Fitch | Moody's | S&P |
| Texas[33] | AA+ | Aa1 | AA+ |
Gov. Perry announced August 13, 2009 that Standard & Poor’s (S&P) raised Texas’ issuer credit and general obligation credit ratings to AA+ from AA "based on the state’s strong and diverse economy and strong leadership from the governor and Legislature that has left a projected $9 billion in the state’s Rainy Day Fund. S&P’s decision was based on Texas’ 2010-11 biennial budget, the state’s strong Rainy Day Fund, and Texas’ low tax-supported debt burden."[34]
The Texas Window on State Government page provides a searchable expenditures function for Texans. Specifically, it provides information on how much each agency spends and which vendors receive state funds. The database is updated nightly, and is managed by the State Comptroller, Susan Combs.
The following table is helpful in evaluating the level of transparency provided by the Texas Window on State Government.
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary |
|---|---|---|---|---|---|---|
| Texas: Where the Money Goes |  |  | | | | |
[edit] Proposed budget for 2010-2011
- To combat the economic downturn, Governor Perry has stressed that all tools that could continue growth should be considered, "including implementing additional sales tax holidays."[35]
- Governor Perry's proposals for the 2010-2011 fiscal term included the following[36]
- $260 million for the Texas Enterprise Fund;
- 203.5 million for the Emerging Technology Fund;
- $60 million for the Texas Film Incentive Program ;
- $60 million for the Skill Development Fund;
- $97 million for the Texas High School Project;
- 622.5 million in teachers incentive and reward programs;
- 645.7 million related to higher education programs;
- $110 million for the Texas Grant Program for financial aid;
- $28 million for community college financial aid;
- $168.9 million for higher education incentive funding;
- $10 million for nursing education;
- $10 million for health and fitness programs for middle and high school students;
- $150 million for disaster and emergency appropriations; and
- $135 million for border security.
[edit] Error in ARRP
On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.[37][38]
The ARRP website reported that the stimulus package sent more than $14.7 million to seven Congressional Districts in Texas that do not exist. Two fictitious districts combined to receive $12.5 million of that sum, District 52 was given nearly $9 million and District 58 received nearly $3.7 million.
District 58 claimed to create or save 45 jobs, while District 52 did not produce any jobs, despite more than twice the amount of funding.[39]
[edit] Budget transparency
The Texas Window on State Government page provides a searchable expenditures function for Texans. Specifically, it provides information on how much each agency spends and which vendors receive state funds. The database is updated nightly, and is managed by the State Comptroller, Susan Combs.
The following table is helpful in evaluating the level of transparency provided by the Texas Window on State Government.
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary |
|---|---|---|---|---|---|---|
| Texas: Where the Money Goes | | | | | | |
For further information, see
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[40]
- Texas will receive an estimated $11,362,889,088.[41]
- The economic recovery website to show how legislators and government officials in Texas are spending Federal funds is available here.
[edit] Support for creation of the database
In addition to the original sponsors and cosponsors of Texas House Bill 3430 (2007), various individuals and organizations promoted the creation of a public expenditures database.
State Comptroller Susan Combs has been one of the strongest advocates of transparency. In her words,"Government spending is often seen as impenetrable and unknowable. Taxpayers have the absolute right to know how their money is being spent, and it is only with transparency that government can be held truly accountable. We are helping citizens with an easy way to examine state expenditures in one place without needing to contact multiple agencies."[42]
Andrew Moylan, Government Affairs Manager for the National Taxpayers Union (NTU), and David Williams, Vice President of Policy for the Council for Citizens Against Government Waste, wrote a letter[43] that encouraged Texas lawmakers to enact legislation that would create a publicly searchable expenditures database. Likewise, Americans for Tax Reform (ATR) issued a press release[44] to announce Texas House Bill 3430 (2007)'s unanimous passage through the House. Grover Norquist, President of ATR, wrote legislators in the Texas Senate, urging them to vote for Texas House Bill 3430 (2007),[45] and an additional letter when the Texas Senate Finance Committee took the bill into consideration.[46]
Following the bill's passage, the Texas Public Policy Foundation also made a transparency discussion available,[47] and its Texas Budget Source has drawn lots of attention from various media sources.[48][49]
Listen to Susan Combs talk about transparency by clicking here.
[edit] Independent transparency sites
The Texas Public Policy Foundation has created www.texasbudgetsource.com, an independent website focused on Texas's budget and transparency. In addition to state transparency information, it posts data about local and school district transparency.
[edit] Public employee salary information
The Houston Chronicle has complied this list of Houston public employee salaries in 2007, and News 4 has provided school superintendent salaries across the state for 2007-2008.
[edit] See Also
Texas taxpayer-funded lobbying
[edit] External links
- Texas Public Policy Foundation
- Texans for Fiscal Responsibility
- Window on State Government, official website
- Comptroller of Public Accounts, Texas government
- Texas Budget Information from the Riley Group, LLC.
- Texas Legislative Budget Board, official website
- Texas Government spending
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Texas EDGE, Economic Data for Growth and Expansion
[edit] References
- ↑ Gov. Perry Press Release, "Gov. Perry Signs State Budget That Reduces GR by $1.6 Billion," June 19, 2009
- ↑ Gov. Perry Press Release, "Standard & Poor’s Raises Texas’ Credit Ratings to AA+," August 13, 2009
- ↑ Dallas Morning News, "Texas Senate approves $182.3 billion budget," May 29, 2009
- ↑ Texas Comptroller's Office of Public Accounts, "Biennial Revenue Estimate 2010-2011," January 2009
- ↑ Texas Legislative Budget Board, Budget 101
- ↑ Legislative Budget Board, History
- ↑ Senate Research Center, Budget 101
- ↑ Legislative Budget Board, History
- ↑ Senate Research Center, Budget 101
- ↑ Senate Research Center, Budget 101
- ↑ Legislative Budget Board
- ↑ Senate Research Center, Budget 101
- ↑ Texas State Senate, "Citizen Handbook: How the Texas Legislature Works," February 2007
- ↑ National Association of Budget Officers, "Budget Processes in the States," 2008
- ↑ Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
- ↑ Legislative Budget Board, Fiscal Size-up, March 2008
- ↑ Legislative Budget Board, Fiscal Size-up, January 2002
- ↑ Legislative Budget Board Fiscal Size-up, 2002-2003 Biennium, January 2002
- ↑ Legislative Budget Board, Fiscal Size-up, March 2008
- ↑ Legislative Budget Board, Fiscal Size-up, 2004-2005 Biennium, Dcember 2004
- ↑ Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
- ↑ Legislative Budget Board, Fiscal Size-up 2006-207 Biennium, December 2005
- ↑ Texas Budget Source, Fast Facts about Texas Spending
- ↑ Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
- ↑ Texas Budget Source, Fast Facts about Texas Spending
- ↑ Legislative Budget Board, Fiscal Size-up 2008-09 Biennium, March 2008
- ↑ Texas Budget Source, Budget by Area
- ↑ Texas Budget Source, Budget by Area
- ↑ Texas State Auditor's Office Web site, retrieved November 13, 2009
- ↑ Texas State Auditor's Office Web site, retrieved November 13, 2009
- ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- ↑ Texas Comptroller of Public Accounts Web site, retrieved November 13, 2009
- ↑ State of Indiana, “State Credit Ratings-as of June 24, 2009"
- ↑ Gov. Perry Press Release, "Standard & Poor’s Raises Texas’ Credit Ratings to AA+," August 13, 2009
- ↑ Governor's Budget 2010-2011, January 27, 2009
- ↑ The following figures were all taken from Governor Perry's 2010-2011 budget proposals which can be found at Governor's Budget 2010-2011, January 27, 2009
- ↑ $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
- ↑ Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
- ↑ Texas, Watchdog.org, November 17, 2009
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ [1]
- ↑ Transparency Quotation, Susan Combs
- ↑ Taxpayers Support Creating Grant and Contract Database in Texas, April 2007
- ↑ Two Cheers for Fiscal Transparency in Texas, May 2007
- ↑ Americans for Tax Reform, "Letter to Texas senators urging passage of Texas House Bill 3430 (2007)," May 2007
- ↑ Americans for Tax Reform, "Letter to Texas senators urging passage of Texas House Bill 3430 (2007) upon its consideration by the Senate Finance Committee," May 2007
- ↑ Transparency Panel
- ↑ Austin News 8, "New Web Site Lets Texans See Where Tax Money Goes," July 8, 2008
- ↑ Examiner, "Brightest Ideas of the Week," July 13, 2008
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