To: tejek who wrote (591697 ) 10/28/2010 1:02:14 PM From: Brumar89 Read Replies (1) | Respond to 2011 Budget ShortfallTexas writes budgets biennially, or in two-year terms, so the shortfall affects the 2012-2013 state budget. State lawmakers write a budget based on an educated guess of how much money will be available to spend during the period for which they're writing a budget. For example, in 2009, lawmakers wrote a budget for 2010-2011. State government gets about 60% of its revenue from sales taxes, so when there's a dramatic drop in state revenues, or collections, there's less money to spend. During the economic recession of 2008-2009, Texas saw a drop in state revenues for 14 straight months. 1.) Budget cuts In 2010, state agencies were already advised to cut five percent from their budget requests, which was projected to save about $1 billion. The Comptroller said in 2010 that she trusted lawmakers to make up the rest.Draining the Rainy Day Fund : The Rainy Day Fund is a savings fund that allows states to set aside excess revenue for use in times of unexpected revenue shortfall. It can plug holes in the budget, defend against an economic perfect storm and keep the deficit clouds at bay. Using the fund itself isn’t particularly easy. If the comptroller says that revenue will decrease between legislative sessions or if a budget deficit unexpectedly develops, it requires a three-fifths vote to transfer money away from the fund. Of course, if members want to use the money for any other situation — like say, a budget shortfall — then they’ll need to reach two-thirds of their colleagues, an even higher threshold. Cost-shifting refers to transferring the burden of paying for a service from the state government to its beneficiaries. The best-known example from 2003 was the deregulation of tuition at public universities. Those with state-subsidized health insurance also had to shoulder higher costs — including $790 million in new co-pays, premiums and other costs.Fees : Since it's politically unpalatable to raise taxes, lawmakers in the past have raised fees in places that many Texans would not notice or be affected by. In 2003, lawmakers established a quality-assurance fee for facilities for the developmentally disabled ($54 million) and adding a $1,000-a-year charge for three years for motorists' first driving-while-intoxicated conviction. lawmakers are considering casino gambling as a possible new revenue stream. But there's infighting among industry groups over which industry - track owners or destination resort casino backers - get preferential treatment in the lawmaking process. If a casino gambling bill actually passed, Texans would then vote to approve them. It would take another few years for the industry to grow in Texas, and provide billions promised in increased revenue. But some tax revenue, like money from casino licenses, could flow into state coffers more quickly. it will never happen. But progressive economists argue that a personal income tax is the only way to have revenue that grows over time, because a property tax and sales tax system will not be enough to continue funding programs and services.A personal income tax will never happen. Anyone who votes for one will be dead politically. texastribune.org
