The House Appropriations Committee met on March 2 to review options available to the legislature to cover the current $4.3 biennium shortfall. They were told they could tap the rainy day fund, defer payments, make further agency reductions or some combination of the three.
The House Committee members are not the only ones looking for funds. Sen. Steve Ogden in a February 8 Senate Finance Committee hearing said, “I think all of us would be well served to start looking at all the cash we’ve got stuffed in this corner and that corner and see how we can maximize its usefulness over the next two years.”
Sen. Jane Nelson who Chairs the Senate Subcommittee on Medicaid noted her disappointment when at the end of her subcommittee hearing on March 2, the committee had only reached consensus on 30 cost containment items to be recommended to the full Finance Committee, representing a total savings of $397 million, a mere fraction of the cost savings she was hoping to reach.
As the search for cuts and revenue continue, Texans from all over are offering out various revenue suggestions for example:
Jimmy Defoor wrote an editorial for the Star Telegram proposing a 3 percent income tax on all taxable incomes.
Lori L. Taylor wrote an editorial for the Dallas Morning News proposing to eliminate tax exemptions for certain products and services.
Sen. Bob Deuell told media reporters he supports spending most of the rainy day fund, the gasoline tax should be raised by 10 cents, and that many sales tax exemptions “don’t make sense.”
(Read article below for more sales tax exemptions discussions.)
As the search for revenue and budget cuts continue, lawmakers are faced with the possibility that a budget shortfall may be waiting for them during the next session. Rep. Mike Villarreal inquired during the House Committee on Appropriations March 2 hearing if there was a structural imbalance in Texas’ budget. Two items have been said to contribute to the structural shortfall: underperforming margin tax/ franchise tax and the property tax buy-down has needed more funding. Combs told the committee they either need to curb expenditures, increase revenue or do both.
In regards to the current budget shortfall, Pitts said he’ll push for a committee vote early next week on a bill that would use $4.3 billion of rainy-day money. It takes a three-fifths vote in each house to spend the money in a current cycle. That equates to 90 votes needed in the Texas House. Accessing the rainy day fund now for the current biennium requires less votes than if they tried to access the fund for the upcoming budget issues.