State Agencies Told to Ask for 10 Percent Less

Fresh off of asking for five percent cuts from state agencies and actually approving $1.2 billion of what was proposed, the state's top three leaders are asking for ten percent cuts in the amounts the agencies will be seeking next time the Legislature meets.

The previous cuts were made from current spending — from funds the agencies planned to use between now and the end of August 2010. But with the economy in the doldrums and sales taxes and other sources of state revenue in the doldrums with it, they know they'll need more.

So the top three — Gov. Rick Perry, Lt. Gov. David Dewhurst, and House Speaker Joe Straus — have asked the agencies to go look at what they'll be requesting for the next budget, and to include proposals for ten percent cuts there.  

Most of the budget analysts who follow this stuff expect the next budget to start with a shortfall of $11 billion to $18 billion — the difference between what the state expects to collect in revenue and what it would spend keeping current programs running the way they're running now.

If the agencies can save money now, the thinking goes, the shortfall will be that much smaller, and the cuts required — if that's the direction lawmakers take — would be smaller than if nothing is done now. And if the agencies suggest the cuts themselves, lawmakers will be off the hook, to some extent, for making whatever cuts need to be made. They won't have to suggest particular cuts themselves, but can follow the lead of the non-elected folks.

The agencies give their budget requests (called LARs, for Legislative Appropriations Requests) to state budget writers at the end of the summer. The letter from the leadership asks them to go ahead and do that, and also to include a budget request that's ten percent smaller than what they think they need.

This is a perennial, even when there's money. And there are some sacred cows that don't have to show the ten percent cuts, too: the Foundation School Program, debt service requirements for bond authorizations, and funds to maintain eligibility in Medicaid entitlement programs, the Children’s Health Insurance Program and the foster care program.

The full letter is here.

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