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The Brief: March 9, 2010

There's good news and there's bad news about the state economy. But there's only a little good news, and the bad news is, well, bad.

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THE BIG CONVERSATION

There's good news and there's bad news about the state economy. But there's only a little good news, and the bad news is, well, bad.

Texas must brace itself for at least an $11 billion shortfall next biennium — and the number could be as much as $15 billion. The revelations came during testimony from John O’Brien of the Legislative Budget Board and John Heleman from the State Comptroller’s office at yesterday's House Appropriations Committee meeting.

The numbers have many in the House saying they’ll have to use the Rainy Day Fund.

Conservative Rep. Carl Isett, R-Lubbock, agrees about the fund, but also argues that things aren’t as bad as they were in 2003, when the legislature had to make drastic cuts to keep the budget afloat. That year, they chose not to use the Rainy Day Fund.

This time, medical costs are a big part of the problem. With 350,000 more people on government health insurance, Medicaid costs are unexpectedly high.  Health and Human Services Executive Commissioner Thomas Suehs shows a $1.5 billion shortfall in this budget period alone.

The Dallas Morning News offered a break-down of some of the biggest costs associated with healthcare: Medicaid and coverage for state employees top their list at $1.3 billion and $142 million respectively.

Some are concerned that Dick Lavine at the Center for Public Policy Priorities told the Lubbock Avalanche-Journal that while he agrees the situation may not be as bad as 2003, he still worries that the conservative legislature will cut social programs like the cuts to the Children’s Health Insurance Program in 2003.

So what's the good news? With sales tax collections only down by 8.8 percent (compared with a year ago) and a gain of 30,000 jobs in January, this is the best we've been doing in a while.

CULLED

• So long, farewell! State Sen. Kip Averitt announced he would resign his seat in a week and half, which will prompt a May special election. While the senator had said he would not seek another term, it was too late to take his name off the ballot, and he won his primary handily despite his intentions. David Sibley, a former state senator and Averitt's mentor, has said he is "seriously considering" running in the May elections and also looking at getting the nomination for the general elections in November.

• There's a reason the dome is pink. Yesterday, Sen. John Cornyn said Texas is only “marginally” Republican. While the primaries drew in record numbers of Republican voters, Cornyn isn't the only one who thinks the GOP advantage slighter than folks might expect. Across Washington, political soothsayers like The Cook Political Report and Congressional Quarterly are marking the governor's race as competitive. Cook went so far as to call the race a toss-up, though most say the Republicans have an edge.

• Interim committee meetings are in full swing. In the Senate, the International Relations and Trade Committee will hear testimony on how best to improve the standard of living in the Colonia communities, and specifically look at the home ownership programs for residents. The House Committee on Natural Resources will also meet to discuss a variety of water issues, including water conservation plans and drought contingencies.

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