Perry’s Budget Mess

When they cut budgets, Texas legislators start talking like Jenny Craig. They’re not slashing programs. They’re “belt-tightening” or “trimming the fat.” If next year’s budget deficit is as high as experts predict, we’ll need better analogies. Gastric bypass would be more accurate. Or maybe liposuction.

We won’t know the size of the budget gap until the legislative session starts next January. Estimates range as high as $18 billion. How big is that? In the 2009 budget, lawmakers allocated $80 billion in state funds. An $18 billion deficit would represent 23 percent of the current budget—double the deficit lawmakers faced in 2003, when they made cuts the state is still reeling from.

Gov. Rick Perry and other Republican leaders have signaled that they intend to reduce spending rather than raise taxes. Which begs a question: Can Texas—which already spends less per citizen than any state in the country—slice 23 percent from its budget? Can you perform liposuction on an anorexic?

Most news reports and punditry have blamed the massive deficit on a weak economy that has lowered sales tax revenues. That’s only part of the story. At least half the projected deficit can be linked to Perry and legislators. In 2006, the Legislature passed a school finance reform plan, largely devised by Perry with former Comptroller John Sharp. The idea was to cut property taxes and replace the lost revenue with a new business tax.

Problem is, the business tax doesn’t bring in enough money to cover the loss in property taxes. Texas’ budget has a built-in shortfall of several billion dollars a year. Here’s the key point: Perry and the Legislature knew this was going to happen. The state’s own analysts at the Legislative Budget Board told lawmakers at the time that the plan would create an annual $5 billion deficit. That adds up to $10 billion per biennium—more than half of next session’s estimated $18 billion gap.

Perry and the legislators intentionally created a $10 billion hole in the budget. That was bad enough, but when the recession hit, the budget became a bigger mess. In 2011, it’s going to catch up with Texas in a potentially devastating way.

The state’s fiscal disaster—and how to fix it—needs to be the top issue in this fall’s elections. Perry and the Legislature acted recklessly. Now they need to be held accountable.