Dire Budget Estimate Fit Well With Prevailing Politics

Texas Comptroller Susan Combs, citing a robust economy,  releases the Biennial Revenue Estimate showing that the state is projected to have over $100 billion available for spending in the next biennium.
Texas Comptroller Susan Combs, citing a robust economy, releases the Biennial Revenue Estimate showing that the state is projected to have over $100 billion available for spending in the next biennium.

Susan Combs, the state’s comptroller, stumbled two years ago, grossly underestimating Texas’ revenues and forcing lawmakers into a belt-tightening mode that probably wasn’t necessary.

The word “shortfall” haunted the 2011 legislative session, as lawmakers worked to continue programs and services in the face of a recession and an official forecast that income was suffering. They made cuts. They balanced the budget (if you’re charitable and not very good at arithmetic). And they bragged about it and went home.

It would be unfair to leave it at that. A fair number of those lawmakers were happy to make the cuts and would have been happier to make more. Many of them were motivated by ideology, not by the fiscal math.

And one reason they’re not screaming at the comptroller is that her lowball forecast two years ago was politically helpful to a legislature elected in a conservative sweep in 2010.

That 2010 vote was part of a nationwide conservative swing. In Texas, it changed a House with 76 Republicans and 74 Democrats into one with 102 Republicans and 48 Democrats.

 

Advocates for more spending — on education, health care, you name it — were muzzled by the official forecast. Instead of saying no to their ideas, budget writers told them that money was tight all around, that the Legislature was in no mood to raise taxes or fees, and that other programs and services were fighting for the same money.

The comptroller’s numbers helped the conservatives do what they had wanted to do in the first place.

Whatever their motivation, it turns out they had more money than they thought they did. Combs’ forecast was wrong — and not by a little bit.

On its current track, the state will have $8.8 billion left at the end of the fiscal year in August, according to the new biennial revenue estimate the comptroller issued the day before the legislative session. It will have another $11.8 billion in what is known as the Rainy Day Fund, which functions as a sort of savings account that state leaders don’t like to use for continuing expenses.

That $8.8 billion will shrink pretty soon — not because of anything in the state’s tax collections, but because of the tricks used to balance the current budget. The most egregious hole — $4.5 billion or so — is in Medicaid. Lawmakers opted to leave that much out of the budget to make the numbers work.

They cut that amount from the spending side because they didn’t have the money on the revenue side to cover it. They figured — and they said this right out loud while they were cutting it two years ago — that they could deal with the problem later, in their next legislative session.

That next session started on Tuesday. The Medicaid hole and lesser deficiencies in other parts of the budget — health care for prisoners and public education, to name two — will be covered in a supplemental spending bill early in this session. The starting tab on that is about $5.2 billion.

That backfilling will chip away at the budget cuts state leaders bragged about during the last election cycle. Every hole filled today was counted as a cut six months ago.

 

The argument over how much spending to add to the current budget will dominate the first couple of months of the session. And the final number will be used as a base for figuring what can and should be spent in the next budget lawmakers will write between now and Memorial Day.

They won’t have enough to satisfy everyone. But they’ll have more. Two years ago, Combs said that the state government could spend no more than $177.8 billion, based on her forecasts.

The comparable amount available for the next budget is $208.2 billion — a 17.1 percent increase over that previous forecast. She told lawmakers in 2011 that they had $72.2 billion available in general state revenue for the current biennium; that was short of the actual amount available by $10.4 billion.

It’s not certain that they want it. They didn’t two years ago, and the tight estimate from Combs — incorrect, but tight — helped them cut a budget they wanted to cut anyway.

Combs was wrong. But at least she was on message.

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