Additional Budget Woes

The most recent recession hurt nearly everybody in some way, whether large or small. But the financial crisis also hurt individual states, many of which now face daunting budget deficits. Unfortunately, Texas is now in the middle of one of the largest of the state budget crises. With recent estimates of the next two-year term's budget shortfall reaching $24-25 billion, Texas now has a proportionally larger deficit than California. Since the legislature must submit a balanced budget for each term, a deficit of this size will pose a significant problem after the November elections. The budget shortfall had been estimated at $18 billion a few weeks ago, but recent property price declines and Medicare payout increases have added several billion dollars more to the sum. I think the deficit is absurdly - and embarrassingly - large. It is bad enough our national debt has risen to over $10 trillion; our state at least should be able to remain in the black. With a shortfall of this size, mere fee increases and cuts in public employee salaries will not be enough. The government will have to eliminate entire departments, layoff thousands of workers, cut the salaries and benefits of many more, and trim spending. Employees and students at public universities could even be hurt, as state aid is withdrawn, grants are revoked, and teachers are laid off. The worst part of the situation is that, because of the imminent election, no politicians are even spending any time on this issue. The government needs to focus on the budget as soon as the election cycle is over. This whole problem could easily be resolved with minor tax increases, but in Texas, even a whisper implying an increase in taxes is enough to derail any politician's career. Consequently, the government needs to cut spending dramatically, increase fees in any way possible, and trim or shut down any public agencies. The changes will be hard, and many people will be hurt in the process; even these changes, however, still might not be enough.

Please see for additional information:

Budget Shortfall Could be $25B

Paul Burka Balances Budget