According to Paul Krugman Texas has a $25 billion budget deficit

[RamboLiberal]

-----

What about the budget? The truth is that the Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances in the face of a serious “structural” budget deficit — that is, a deficit that persists even when the economy is doing well. When the recession struck, hitting revenue in Texas just as it did everywhere else, that illusion was bound to collapse.

The only thing that let Gov. Rick Perry get away, temporarily, with claims of a surplus was the fact that Texas enacts budgets only once every two years, and the last budget was put in place before the depth of the economic downturn was clear. Now the next budget must be passed — and Texas may have a $25 billion hole to fill. Now what?

Given the complete dominance of conservative ideology in Texas politics, tax increases are out of the question. So it has to be spending cuts.

Yet Mr. Perry wasn’t lying about those “tough conservative decisions”: Texas has indeed taken a hard, you might say brutal, line toward its most vulnerable citizens. Among the states, Texas ranks near the bottom in education spending per pupil, while leading the nation in the percentage of residents without health insurance. It’s hard to imagine what will happen if the state tries to eliminate its huge deficit purely through further cuts.

http://www.nytimes.com/2011/01/07/opinion/07krugman.html?_r=1&hp

[Joanne98]

1. That's almost as much as California. Who also had a REPUBLICAN governor

Who ALSO ran on balancing the budget!

Boy those Republicans sure do know how to spend money!

ON THEMSELVES!

[DBoon]

6. Arnold to his credit actually pushed through many needed infrastructure bonds

What's Perry's excuse?

[Joanne98]

10. His hair did it.

[Hannah Bell]

20. those bonds are actually the ruination of california.

Ironically, the debt is partially the result of the Governor's “don't raise taxes” rhetoric, while at the same time promoting and securing approval of record-amounts of General Obligation bonds.

Ironically, the governor’s bond promotion scheme was one of the primary factors contributing to the state’s sea of rising debt (California Bondage).

According to a recent report in The Sacramento Bee, in 2006 the governor successfully promoted and got voters to approve $37.3 billion in publicly-financed General Obligation Bonds, for a myriad of “public” works projects and programs; i.e., water supply reliability, water for fish, drought and flood relief. According to the State Treasurer’s Office, the total debt repayment obligation to the public will exceed $50 billion, when interest payments are included. The money to repay this debt comes directly out of the state’s General Fund; this is the same fund that has been subjected to the Governor’s draconian budget cuts in jobs, essential services and safety-net programs.

In late 2009, the Governor and his campaign contributors were successful in getting an $11 billion “Water Package” passed by the Legislature, which, if approved by the voters in 2012, will cost the public an estimated $20 billion. There again, many of his supporters with be the recipients of windfall profits from the syndication, sale, and revenues realized from the issuance of those bonds. It doesn’t end there.

In 2003, in his first year of office, the Governor persuaded voters to approve two General Obligation bond propositions, which involved borrowing $15 billion to pay off some of the state’s budget debt, while purportedly placing a cap on spending. The end result was that the borrowing exacerbated the State’s deficit problems and the cap on spending just did not happen.

According to the Office of the Treasurer, in November 2010, the State’s total outstanding bond debt was $157.8 billion; $88.2 billion in principal and $69.5 billion in interest; about $128.4 billion are General Obligation Bonds. There is an additional $41.5 billion of authorized but unissued GO bonds.

As a result of the Governor’s “fiscal austerity” and “GO bond saturation” California is paying more money each time the state issues GO bonds. For example, as of December 2009, California had $83.5 billion of outstanding long-term debt; 97.3% is fixed rate debt; $63.9 billion was GO bond debt.

In Fiscal Year (FY) 2010, the California State Treasurer’s office estimated that the amount of revenue in the General Fund at $88.09 billion, and the estimated debt service on the existing $63.9 billion in outstanding bonds (includes principle plus interest), and estimated the debt service on those bonds at $6.09 billion; about seven (7) percent of the General Fund’s annual revenue stream. However, in FY 2013, estimated revenue in the General Fund is projected at $91.6 billion, and the estimated total debt service on the on the GO bonds at $10.06 billion; 10.98 percent of the General Fund.

GO bonds are a form of long-term borrowing in which the state issues municipal securities and pledges the full faith and credit to their repayment.

The California Constitution set repayment of GO debt before all other obligations of the state except those for K-14 education.

The repayment obligation associated with the issuance of such bonds is derived from the State’s deficit ridden General Fund. Draconian budget cuts have and continue to be made as a result of increased debt load, fending off new taxes, and the overall downturn in the economy have fueled the budget crisis, contributing to the proposed sale of the 11 properties in question.

Still yet unclear are the links – financial, political or otherwise - between the increasing GO bond debt, annual repayment obligations, the increased costs associated with State borrowing, the primary promoters/backers/syndicators and beneficiaries involved in the proposed sale of the state properties. However, a cursory review of Governor Schwarzenegger’s campaign disclosure statement indicate that significant sums of money came from supporters that apparently benefited from the issuances of the GO bonds.

http://www.californiaprogressreport.com/site/?q=node/8530

[DBoon]

24. I give up

you sound like you know much more about this than I

[Turbineguy]

2. Well, but then again

everything in Texas is bigger.

[w8liftinglady]

3. And where the hell is the money going?

streets are like one big pothole,schools are crumbling
...except in "nice " places -like Las Colinas.

[gratuitous]

8. I think the point is, the money's not going anywhere

Texas Republicans, like their California counterparts, are taxophobic to the point of pathology. The state's services are supposed to run on air or goodwill or something, and when the money isn't there, rather than ask the Big Money Boyz for some of their windfall, they cut, cut, cut services and budget items (e.g., schools, roads, etc.). The funny thing is, people keep driving on the roads, the kids keep going to school, folks need their licenses processed and renewed, and none of it happens for free.

I'm reminded of the old joke: The minister stands before the congregation and says, "I have good news and bad news. The good news is, we have all the money we need to meet our annual budget!" Everyone cheers. "The bad news is, it's still in your pockets." Predictable grumbling.

[jwirr]

9. It is not so much where it has gone - for the last 12 years the feds have

been cutting programs that are mandated which means the states have to pay for them. They were able to handle it until the cuts came through. Everything that is effecting the feds is also effecting states, counties and cities.

[Joanne98]

11. Maybe he gave it to the Bilderbergers

[Saphire]

23. How about...the $26 million renovation of theTexas Governor's Mansion

that leads to this..." With the state facing a budget shortfall of at least $11 billion, Texas Gov. Rick Perry has spent almost $600,000 in public money during the past two years to live in a sprawling rental home in the hills above the capital, according to records obtained by The Associated Press."

Shameful

[gmoney]

4. "Drill here, drill now!" ???

[tyne]

5. Just an fyi

If a bagger questions the sourcing, direct them to The Texas Tribune which ran a story on this and included the controllers office as an additional source.

http://www.texastribune.org/texas-taxes/2011-budget-shortfall/

[RamboLiberal]

12. Here's part of what Tribune says

A budget shortfall as high as $25 billion is projected as lawmakers head into the 2011 legislative session, according to estimates from economists and the comptroller's office. Texas writes budgets biennially, or in two-year terms, so the shortfall affects the 2012-2013 state budget.

Leadership in the Texas Legislature, which is dominated by fiscal conservatives, is not expected to support attempts to raise taxes to fill the multibillion-dollar hole. But social service advocates say the state's safety net system can't afford any further budget cuts.

How the state fell into a hole

Declining sales tax receipts and the recession: 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 percent 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.

Structural deficit: Some budget watchers say lawmakers created a "structural" deficit in 2005, when lawmakers cut school property taxes by one-third and expanded the business tax to make up the difference. But the business tax brings in billions less each year than the property tax did, meaning that with every new budget, lawmakers must find more and more extra money to make up the difference. The structure of the revenue system creates deficits each year.

http://www.texastribune.org/texas-taxes/2011-budget-shortfall/

[dkofos]

7. But, But, I could swear that Rick Perry said he personally balanced the Tx budget

in several of his campaign ads.
You mean he lied.

The people in this state are truly stupid.

[charlie]

13. Oh yeah, we do

Our city's Mental Health, Mental Retardation head is running around with his hair on fire because his budget is going to dry up into pocket lint by this summer. Which means the mentally ill will land in jails and emergency rooms. Which, of course, will cost way more than monitoring and treating them. Reagan years redux, yay.

And we just gave Republicans a near unassailable majority in the state House. We don't do half measures down here, we Texans go for the Big Stupid every time.

[DCKit]

14. I guess prison labor is a far less lucrative racket than I thought. nt

[OHdem10]

15. Conservative Economic Fundamentalism ---Keep cutting

taxes until you have no funds for the necessities much
less services. Cutting taxes=cutting Governmentfunding
for schools, roads, bridges, electricity, the most
basics.

[Major Hogwash]

16. But aren't RepubliCONS in charge of every little thing in Texas?

From Governor on down to head custodian in state government?

I think I heered once that they have 100 RepubliCONS in the state's House of Congress in Texas.
Out of 150 representatives.
That shore does sound like a majority to me.

Do you think they'll raise taxes in Texas?

[Manifestor_of_Light]

17. We have high taxes and fees in TX

Property taxes are high in the cities. The appraisals keep going up each year, even if the real estate market is depressed.

We also have high sales taxes, usually 8 - 8.5%. Fees for drivers licenses, license plates, etc. are very high.

We don't have a state income tax and will never have one. I didn't know there was such a thing as a state income tax until I was grown and heard my aunt griping about the state income tax in Ohio.

[Mariana]

18. I don't know why Texas has had a reputation as a low tax state.

We moved here from Massachusetts (it was that or my husband would lose his excellent job) in 2004. When adding up all the various state and local taxes and fees we paid, it was just as high here as it was in Mass. Furthermore, our home in Texas is worth significant less than the one we had in Mass. If we'd bought a home of equal value, we would have paid much more than in Mass. because of the property taxes. Texas has no state income tax, but it sure makes it up with other taxes and fees.

[Hannah Bell]

19. Texas has few unionized workers in either the private or public sector, besides.

so can't blame the "greedy union workers" for this one.

besides which, texas ties with california for the largest number of giant corporations headquartered in state.

i wonder why so many texans are poor, & public services so lousy?

[SoCalDem]

21. Sounds like they need a Tax cut

:rofl:

[4dsc]

22. No, Paul Krugman, Texas Is Not Broke

http://www.nationalreview.com/exchequer/256614/no-paul-krugman-texas-not-broke

For what its worth.