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State budget overview

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Submitted by 

Jim Pitts-R

District 10 House Representative

The Texas House of Representatives passed legislation that addresses the state’s current and future fiscal situation recently. 

These bills, which I am proud to have authored, close the state’s current budget shortfall of $4.3 billion and also reflect that the state will have less money to spend over the next two years. 

Agencies were instructed to implement a five percent reduction, with certain exemptions for critical services and constitutionally required spending, such as public education. 

In November, the state’s leaders again asked agencies to make further reductions, this time implementing an additional 2.5 percent budget cut. 

Taken together, these cuts resulted in more than $1.5 billion in savings to the state. 

Last week, the Texas House passed House Bill 4, which I authored, that captures the remainder of these budget reductions. 

This bill makes an additional $600 million appropriation to the Foundation School Program to account for growth in public school enrollment and decreasing property values.

Combined, the net effect of the reductions and supplemental spending is a savings to the state of $853 million.

These savings, combined with an additional $300 million the comptroller identified last month in additional sales tax revenue, go a long way towards closing the state’s current $4.3 billion shortfall.

I am proud of the success we had through House Bill 4 in reducing spending while still leaving state agencies able to provide Texans with essential government services. 

Yet, with less than five months left in the fiscal year, it is impossible for us to get there through cuts alone.

To address the remainder of the shortfall, the House voted to approve my bill, House Bill 275, which appropriates $3.1 billion from the Economic Stabilization Fund, commonly known as the Rainy Day Fund.

Created by the Legislature and approved by voters in 1988, the fund serves as a savings account for the state to turn to if faced with emergencies. 

Addressing the effects of this recession is a perfect example of why the fund was created.

With the current budget problems fixed, our attention turns to the state’s financial future. 

This balanced budget does not include any new taxes or spend a single dollar of the Rainy Day Fund on ongoing expenses.

House Bill 1 cuts total spending by $22.9 billion, or 12.3 percent, from current levels.

The majority of the reduction comes from the withdrawal of federal funds. In terms of state spending, this budget cuts $4.5 billion, or 5.4 percent, from 2010-2011 levels. 

I am sensitive to the impact that House Bill 1 would have on the citizens of Texas. 

The next step will come when the Senate passes their version, and the House and Senate begin negotiating the differences in Conference Committee. 

I am confident that this process will lead us to passing a state budget that addresses the basic needs of Texans and upholds the strong fiscally conservative principles that have made Texas the great state that it is today.

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Nelson Propane

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