The House Select Committee on Fiscal Stability has published its report to the 82nd Legislature. Below is a summary of the recommendations.
Interim Charges:
1) Assess the state’s ability to meet its current and future budget obligations.
2) Determine whether the past and anticipated budget shortfalls are due primarily to the current economic recession or a more systemic problem.
In light of these charges, the Committee studied aspects of the state’s financial stability in terms of growth in population, increases in sales tax revenues, the dedication of funds in General Revenue, the expansion of the health and human services sector and the constitutional debt limit.
Recommendations:
Economic Stabilization Fund
1. Pass legislation to provide a deposit to the Rainy Day Fund from sales tax revenues that exceed the twenty year moving average to effectively smooth the volatility in the peaks and valleys in sales tax revenue growth.
Constitutional Debt Limit
2. The Legislature must be prudent in authorizing further debt and in considering the impact on the CDL. The economic downturn has caused the state to experience a significant drop in sales tax collections, which has caused a drop in the amount of unrestricted General Revenue and consequently the state is at risk of diminished capacity within the CDL without actually having authorized more debt.
Healthcare
3. Flexibility in caseload management and utilization of the system, possibly through co-pays for services and medications or other methods, would aid in addressing the financial costs to Texas.
Fiscal Notes
4. The LBB should identify legislation that increases the projected cost estimate to a period of time longer than five years. This would allow legislators to be better informed as to what the future costs of a measure would be, and whether such costs are appropriate and justifiable.
General Revenue-dedicated Accounts
5. Thorough consideration of the necessity of continuing each fund. Should consideration determine that an account be continued, then the Legislature should specify an amount to be collected per biennium and dedicated to the account. Any excess revenues collected should be transferred into General Revenue.
Revenue Update to the Legislature
6. The entire House membership should receive an update and overview from the LBB in order to fully understand the issues and priorities being contemplated before introducing legislation that would increase expenditures to the state.
A complete copy of the report can be found by visiting: