Texas House Speaker Joe Straus addressed the House Appropriations Committee today to discuss the challenging work of developing a balanced, no-new-taxes state budget.
Full text of the remarks:
Thank you, Mr. Chairman and Members for letting me appear with you and make a few remarks today. I’d like to begin by thanking you for the work you are doing this interim, and in advance, for the hard work you will do next session. As members of the Appropriations Committee, you will have a very challenging task: developing a balanced, no-new-taxes state budget in the face of a daunting shortfall. Balancing our budget is going to require some hard choices, and I appreciate you taking the time to study all of the options right now.
I know that our state’s economy is doing better than most others. We can all be proud that our business climate is viewed as perhaps the best in the nation. Yet we have not been immune from the effects of the national recession. The comptroller’s office will be testifying before you shortly about our revenue situation. We saw some positive growth in April, but this only comes after more than a year of declining sales tax revenues. The combination of declining revenues and a growing population will make our job more difficult. Over the next few years, Texans will face higher federal income taxes and other increases in federal levies, including for Social Security and Medicare as a result of federal health care legislation. We also face huge new mandates from Washington that will, over time, force billions of additional state spending on health care.
Our work on the budget will begin in an environment of uncertainty as the federal government grapples with spending and tax measures to reduce the federal debt. This makes it even more imperative that the state of Texas cover its budget shortfall without a tax increase. Increasing taxes would restrain economic growth and hinder our ability to create jobs. Come next session, I am confident that we can make thoughtful, responsible decisions to balance our budget, but this will require tough choices, significant cuts in some areas and perhaps totally new thinking in others. I know you have already begun this hard work.
As you continue, I hope that you will look at every option. Perhaps you will consider the impact of imposing a blanket moratorium on all new programs and services that require general revenue funding. Or possibly ways to improve how the state collects all of the fines and fees that are owed to Texas taxpayers. Should the state stop issuing bonds because of the on-going costs associated with debt? Because so much of our general revenue budget goes to personnel, I hope you will find creative ways to contain personnel costs and limit payroll growth. You might consider the impact of freezing higher level salaries or limiting new hires to only those essential to the public safety and welfare of our citizens. Forty-two other states have implemented unpaid furloughs to save on salary costs. Others have moved to a four day work week at some agencies in order to save on operating costs. I hope you will look at what other states are doing and determine whether any of those options would be feasible in Texas.
I am not advocating for any one of these choices in particular, but I do know that every cost savings idea must be on the table. We will need to be resourceful and look at every possible way to make our state government more efficient and effective. As leaders, we need to make sure our state agencies, our state employees and our citizens understand that we cannot afford business as usual. We are going to have to make significant cuts, and the 5 percent that we requested was just the beginning. It was absolutely necessary, but not nearly sufficient.
I am confident that in the long run, this process will make our state stronger. As we emerge from the recession and begin to vibrantly grow again – and we will – making the right decisions now will prepare us for continued growth and prosperity in the future. Years from now, we should be able to look back at this time and not just think of the budget challenges, but the smart choices we made that put our state on track for a more prosperous future.
I am grateful for the work that you and the committee are doing and look forward to working closely with you to achieve the balanced budget that our Constitution requires and our citizens expect. Thank you for letting me take some of your time this morning.
