A preview of the coming budget battles

I like the link title for this story: "Some fear state budget will hurt health, education". I believe that one goes into the "No s--t, Sherlock" file.

Unofficial estimates from Gov. Rick Perry's office identify money totals - factoring in "conservative" revenue growth, an economic boost from tax changes and the balance in the state contingency fund - that come close to covering his staff's estimates of major spending needs in the coming two-year budget period. The needs, identified in May, include such things as Medicaid growth but not recently high-profile issues such as parks funding.

For the two-year budget period after that - the one lawmakers won't write until 2009 - forecasts are more uncertain.

In that period, the state would be $300 million short of paying just for the school and tax package under what Perry budget director Mike Morrissey called conservative revenue projections. He said the estimates don't fully account for factors such as potential economic growth.

In short, if you accept the Governor's notion of "conservative" revenue growth estimates, and you accept that the special session tax swap will be a boost to the economy (I'm a little unclear on that one), and you assume that the previous surplus projections haven't already been allocated at least twice, then we're only $300 million shy of a balanced budget. Assuming nothing else bad happens, of course.

As you might imagine, not everyone sees it that way.

Rep. Jim Dunnam of Waco, House Democratic Caucus chairman, dismissed the figures from Perry's office as "ludicrous estimates."

Sen. Steve Ogden, R-Bryan, Senate Finance Committee chairman, said: "The budget is going to be tight. But I don't think it's going to be anything that we can't manage.

"I think we're going to be fine. I'm not 100 percent sure," Ogden said. "I think the next biennium, we're going to be OK. I'm not ready to speculate on the biennium beyond that."

[...]

[Comptroller Carole] Strayhorn estimated the effort would create a shortfall of $23 billion over five years. The nonpartisan Legislative Budget Board put it at $25 billion.

The comptroller is the only one who can make official revenue estimates, a point Morrissey noted. The comptroller is required to make such an estimate for the next Legislature, which returns in January 2007.

Deputy Comptroller Billy Hamilton emphasized that point when asked about Morrissey's figures, and he disputed the idea that there would be a huge economic response to the tax changes.

"You can come up with all sorts of scenarios, but really, the proof is in the pudding," Hamilton said. "And right now, the pudding says $23 billion to $25 billion short in the plan. That's $5 billion a year, and that takes a lot of economic growth to make up."

I don't blame Sen. Ogden for not wanting to talk about the next biennium. It gets ugly in a hurry. Strayhorn's revenue estimate for January of 2007 will be her last as Comptroller. That will bear watching.

Posted by Charles Kuffner on August 23, 2006 to Budget ballyhoo | TrackBack