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A Balanced Approach To Meeting the Needs of Texans Dick Lavine Center for Public Policy Priorities January 28, 2011.

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Presentation on theme: "A Balanced Approach To Meeting the Needs of Texans Dick Lavine Center for Public Policy Priorities January 28, 2011."— Presentation transcript:

1 A Balanced Approach To Meeting the Needs of Texans Dick Lavine Center for Public Policy Priorities January 28, 2011

2 The Texas State Budget for Total: $187 billion; 76% for Education or HHS Only $82 billion is actual GR; plus, $8 billion federal ARRA used as GR

3 Why Is There a $27 Billion Shortfall?

4 Or Is It a $33.5 Billion Shortfall? RequestedRecommendedShortfall HHS$ 31.0 billion$ 20.0 billion- $11.0 billion-35% Education 56.4 billion 41.7 billion billion-26% Criminal Justice 9.2 billion 7.5 billion billion-19% The rest 10.2 billion 4.1 billion billion-60% TOTAL$106.8 billion$ 73.3 billion- $ 33.5 billion-31%

5 The Recession Has Caused Sales Tax Revenue to Plummet Fiscal 2008 Fiscal 2009 Fiscal 2010 Fiscal 2011

6 2006 School Tax Cut Created A Structural Deficit Predicted Cost of Property Tax Reduction$14.2 B Predicted Amount of New Revenue$ 8.3 B Predicted Shortfall$ 5.9 B Minimum Cost of Property Tax Reduction $14.2 B Forecast of New Revenue$ 4.5 B Likely Shortfall$ 9.7 B

7 In 2003, State Budget for Balanced with Cuts and New Revenue Revenue measures: $1.8 billion Cost shifting: $1.9 billion Accounting changes: $1.2 billion Rainy Day Fund: $1.3 billion Federal Fiscal Relief: $1.4 billion Cuts to 2003 budget: $1.4 billion Cuts to Budget: $6.6 billion Estimated General Revenue Shortfall of $15.6 billion

8 How Texas Faced the Crisis Other Taxes Had to Replace Falling Oil & Gas Revenue

9 Funding a Balanced Approach: Spend the Rainy Day Fund Potential Revenue for Beginning balance$8.2 billion Growth during $1.2 billion Total Rainy Day Fund$9.4 billion

10 Funding a Balanced Approach Next Steps Enforce existing tax laws Eliminate wasteful exemptions Raise existing taxes Adopt new taxes

11 Use of This Presentation The Center for Public Policy Priorities encourages you to reproduce and distribute these slides, which were developed for use in making public presentations. The data presented here may become outdated. For the most recent information or to sign up for our free Updates, visit © CPPP Center for Public Policy Priorities 900 Lydia Street Austin, TX P (512) F (512)


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