The Budget Deficit from Hell

Texas has 4th largest shortfall in the nation


Dave Mann

For months the estimates of Texas’ budget deficit kept rising—$11 billion, $18 billion, $20 billion, $24 billion. Each seemed more unfathomable than the one before.

The high-end estimates were in the $22 billion to $24 billion range. Surely, it couldn’t be worse than that.

Well, yesterday, it officially got worse.

The Comptroller’s office released its official revenue estimate, and the news must have made jaws hit the floor (at least mine did): $27 billion.

And with that, Texas became one of those states—the kind of place that makes national news for its budget woes, the place that closes state parks, that doesn’t just cut public programs, but wipes them out entirely, that combines school districts and lays off thousands of public employees.

My friends, we’ve entered California territory.  

In fact, Texas now has one of the worst budget outlooks in the country—worse than California’s, in fact.

Texas has the fourth-largest budget deficit in the country for fiscal year 2012, according to the Center on Budget and Policy Priorities.

That $27 billion deficit accounts for about 25 percent of the budget. The only states with shortfalls that consume a higher percentage of their budgets are Illinois (50 percent—imagine that?), New Jersey (37 percent) and Nevada (37 percent). Then Texas.

Oh, and  California? Its deficit is 22 percent. So congratulations, fellow Texans. We’re now officially worse off financially than the state where good budgeting goes to die.

In 2003, the Legislature faced a $10 billion shortfall that seems so quaint now. Lawmakers took a slash and burn approach, instituting painful cuts that deprived hundreds of thousands of kids of health insurance, laid off several thousand state workers and shrunk numerous programs. It took years to recover. Some programs never have rebounded. And some Republican lawmakers later paid a political price for those cuts.

For those of us who covered the 2003 session, the notion that just eight years later, Texas faces a shortfall that’s nearly three times larger is a truly staggering thought.

I certainly don’t envy the people who have to write this budget. Even if they drain all $9 billion from the Rainy Day Fund, they’ll still have billions and billions to make up. Health care, K-12 education and higher education comprise about 80 percent of our spending. That means health care, public schools and colleges are about to get slashed.

I don’t think anyone knows how devastating those cuts will be or how fierce the public backlash could become. But neither will be pleasant.