Two weeks ago, the smart guys were betting there'd be $1 billion to $2 billion in red ink in the state's starting budget.Instead, it's in the black, though it will probably swing from one inkwell to the other in the next few weeks.
The Legislative Budget Board's blueprint calls for general revenue spending of $63.5 billion. A few days before that was uncorked, Comptroller Carole Keeton Strayhorn's forecast said the state would have $64.7 billion to spend over those same two years. The numbers are all mushy and subject to politicking and other crises, but the initial cushion of $1.2 billion was encouraging to budgeteers who started this same exercise two years ago with a $10.5 billion shortfall.
The LBB also issued its first set of performance reviews. Those were created in the comptroller's office and stripped away from that agency by the Legislature and handed to the budgeteers. Their first effort would redirect and/or save $3.2 billion in general revenue; $1.3 billion of that amount is already included in their draft budget. Both those recommendations and the LBB's starting budget are available on their website: www.lbb.state.tx.us.
The revenue side of the puzzle belongs to the comptroller alone, but Strayhorn ventured far enough onto the spending front to say that she thought the starting cushion amounted to $400 million. The Center for Public Policy Priorities did its version of a current services budget and guesstimated the state starts $1.5 billion short of the amount it needs to keep doing what it's doing now. That think tank's list of "improvements and restorations" totaled another $5 billion on top of that.
In fact, the budgeteers have some wiggle room. School finance can't be solved without a tax bill or, if you prefer, a "revenue package," and that exercise always makes it easier to write a budget. Even lawmakers who think school finance is destined for a special session later this year say the budget won't be hard to balance. And there's an advantage to doing the budget without doing school finance at the same time. The budget would be set -- that is, taken off the bargaining table -- before the tax bill is in play. That simplifies the trading. Other spending will be locked down early, and public schools will be the only real supplicant in line for money when the tax bill is in play. If school finance gets done first, lawmakers will be tempted to swell the tax bill to feed other pet programs.
A few highlights:
• The "all funds" total -- which includes federal funds and state funds and everything else -- would be $134.4 billion, up $7.8 billion from the last budget.
• Spending in public education (education and health and human services spending dominate the state's budget) would rise 8.3 percent under the LBB draft, from $31.0 billion to $33.6 billion.
• Higher education spending would rise, but there's more to that. Spending at health-related schools and at two-year schools would rise while other areas would see cutbacks.
• Public school attendance was 4.0 million in FY 2004, and is expected to hit almost 4.3 million in FY 2007. By then, the LBB expects 72 percent of those students to be passing all standardized tests, that half the school districts will be exemplary or recognized, and that 2.9 percent will drop out of school.
• The LBB figures 53.5 percent of the state's college kids will be graduating within six years in FY 2007 and that enrollments by then will be 24 percent larger than they were in 2000.
• The budgeteers say 61,448 college kids got Texas Grants in 2004 to help pay for school; they would cut that to 19,425 by FY 2007, the second year of the two-year budget they're writing. Funding for the B-on-Time program would be increased by $129.7 million.
• Overall employment in health and human services would drop from 46,328 full-time-equivalent employees this year to 41,720 two years from now.
• 36 percent of the state budget would go to health-care related appropriations, a total of about $48.6 billion.
• State lawmakers are working on a workers' compensation reform in response to rapid rises in premiums; the state's own workers' compensation payments are expected to rise only 4 percent per year.
• Client loads at the Department of Aging and Disability Services are rising. For instance, the number of people in Medicaid community care is expected to rise from 125,332 per month now to 149,102 in two years time.
• Child protective services investigations are expected to rise from 138,587 in FY 2004 to 170,480 in FY 2007. Investigations in adult protective services would rise from 60,998 to 67,025 in those same years.
• The LBB assumes the average number of days per month for foster care would go from 488,060 in FY 2004 to 578,955 in FY 2007.
• Legislative budgeteers are assuming CHIP rolls will drop from 409,865 in FY 2004 to 331,132 in FY 2007, that the average number of TANF recipients in that same time frame will go from 253,907 to 215,300, and that Medicaid acute care caseloads will rise from 2.7 million to 3.1 million.