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Comptroller gives budget breakdown
By Conner Hammett, chammett@starlocalnews.com
Texas Comptroller Susan Combs gave a rundown of the state's current and projected financial situation at a town hall meeting held Thursday in Allen.
While Texas' economy, especially with regard to employment and sales tax revenue, is currently faring better than that of most other states', increased health care and education spending will change the state's financial landscape over the next 10 years, Combs said.
Rising health care costs and continued population growth will cause Medicare spending to take up an ever-increasing percentage of the budget over the next 10 years. The program currently makes up 20.2 percent of the budget. By 2023, projections show, it will comprise 34.9 percent, shrinking the available funding for public education and other state-funded services, Combs said.
Population growth has also driven statewide public school enrollment, which increased 20.9 percent between 2000 and 2010. Spending outpaced that growth, however, growing by 76 percent in the same 10-year period. The number of school administrators has also grown more quickly than the number of students and teachers, Combs said.
"Schools vary hugely in their response to their population," she said. "They vary hugely in how they manage their budgets. But this is a problem."
Combs also pointed out the debt of cities, school districts and other local governments in Texas outpaces that of other states by a large margin. Of the country's 10 largest states, Texas had the second-highest level of per-capita local debt in 2009, with $7,983.
Local governments can save millions of dollars, however, by consolidating facilities for multiple local government agencies and departments and ordering large amounts of supplies at a time to reap volume discounts, Combs said.
"We're going to have to be much more innovative, inventive and collaborative on some of these, what I'd call back-office expenses: how you hire, how you do your HR, how you do accounting, how you do procurement," she said.
The Texas Legislature narrowly passed a balanced budget during last year's legislative session. Combs' office projected a $15 to $27 billion deficit at the beginning of the session, but the Legislature was able to balance the budget by cutting $4 billion from public education and $2 billion from Medicaid.
The gap was further closed using $3.2 billion from the Rainy Day Fund and one-time accounting tricks such as delayed payments, early tax collections and diverting dedicated funds to fill budget cracks.
The next legislative session, Combs said, will start with $3.4 billion in motor vehicle sales tax, $4.3 billion in revenue from the business margins tax and a $900 million transfer into the Health and Human Services budget for Medicaid spending. Legislators will also start the session with $8.1 billion in the state's Rainy Day Fund, which will be bolstered by Combs in November through a $1.9 billion transfer.
With six lawsuits against the state regarding school finance still pending, it is difficult to ascertain how exactly the Legislature will fund public schools next biennium. Combs said she expects a ruling that the Legislature's system is unconstitutional sometime in January, which will either go to the Supreme Court or appeals courts.
"I do not believe that you will have a definitive answer, next session, for school finance," she said.
The best way of absorbing the cost of new health care regulations related to the Affordable Care Act, Combs said, is the kind of interstate health care compact proposed in a bill by the Texas Legislature last session.
"If you don't do the proposed enrollment of 6.4 billion [by expanding Medicaid coverage], you'll still do 5.3," she said. "That's a lot of folks. That's a lot of costs, and what you have mandates from the feds on what you have to cover, that is a lot of money."
The Allen stop was the 39th town hall stop on a multi-city tour by Combs, who also stopped in Rowlett later Thursday for a similar meeting.
"What I'm really trying to say to people is there are pressures coming from Washington and there are expenses here in Texas, and as you look at pressures coming from Washington, I want you to have information as a citizen, as a resident, to empower yourself," she said. "Can you help organize your spending at the public service level in a way that is very effective?"
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