Better than a sharp stick in the eye

Comptroller Strayhorn has given her revenue report to the Lege, and it's much better than the last time.

Strayhorn estimated legislators will have $64.7 billion in state revenue to spend in the upcoming two-year budget — $6.4 billion more than they had in January 2003.

But whether that means lawmakers are in the black for the 2006-2007 budget is in the eye of the beholder.

Gov. Rick Perry and legislative leaders told state agencies to cut 5 percent out of their current budget to use as a starting point for budget writers. This would put it in the black by billions of dollars, but the surplus would rapidly disappear as the Legislature added spending.

Strayhorn made estimates based on current state spending levels plus money to cover population increases in public schools and social services. She said that would leave a $400 million surplus.

But advocates for the poor said Strayhorn's revenue estimate is at least $7 billion in the red if the state wants to maintain current services and restore cuts made during the 2003 session. And that does not include increased funding for Child Protective Services, teacher health insurance or to lower public school property taxes.

The urge to restore CHIP funding will put things back in the red on its own, and that's before anyone mentions school financing or property tax cuts (remember, every ten-cent reduction in property taxes is a billion dollars in lost revenue). Lt. Gov. Dewhurst has said he expected a shortfall of a billion or two; I think in the end he'll have been optimistic. Still, this is better than starting out $10 billion in the hole.

As always, this is a campaign opportunity for Strayhorn:

"No matter how strong our economy is, fixing our broken school finance system cannot be done within our existing revenue estimate," Strayhorn said. "There is no shortfall when it comes to the budget. There is a shortfall when it comes to the governor's leadership."

Strayhorn said Perry needs to immediately restore funding for the Children's Health Insurance Program, fully fund teacher health insurance and give teachers a $3,000-a-year pay raise.

Those proposals would cost almost $3 billion more than her revenue estimate, but she said they could be funded by adopting a $1 a pack increase in the cigarette tax, legalizing video lottery at horse racing tracks and closing franchise tax loopholes.

"The governor (in 2003) championed a budget with $2.7 billion in new fees and charges and out-of-pocket expenses, and balanced the budget right on the backs of our school teachers and our most vulnerable Texans," Strayhorn said.

This session is going to be such fun, isn't it?

UPDATE: Lasso has some editorial reaction to the announcement of the "surplus".

Posted by Charles Kuffner on January 12, 2005 to Budget ballyhoo | TrackBack