Size Matters

How big is the state’s budget shortfall? It depends on who’s doing the math.

Start with what it would cost to keep the state running just like it’s running now, only add to that the increased school enrollments, health care rolls and whatnot. Subtract that sum from the amount of money Comptroller Susan Combs predicts will be available to spend over the next two years, and you get a big negative number.

Or, instead, start with the current budget and assume no increases in spending (tell the public schools, for instance, that even though they have more students enrolling, you’re giving them the same amount they got last year because times are tight). Subtract that from Combs’ estimate, and you get a smaller negative number.

Combs won’t present her revenue estimate until January, and legislators don’t have a starting budget yet. But House leaders, including Jim Pitts, R-Waxahachie, the Appropriations Committee chairman, are talking about a shortfall in excess of $20 billion — while Senate leaders, including Steve Ogden, R-Bryan, the Finance Committee chairman, are insisting the gap is less than $15 billion. Gov. Rick Perry is with Ogden, bragging about what a smart guy his old friend is and how good his numbers are.

It matters politically. A big shortfall means the coming legislative session will be all about what’s being cut — what programs and services won’t be offered. A smaller one puts lawmakers in the position of deciding, in hard times, what they can add to current spending. The ending numbers would be the same, more or less, but the positioning is critically different.

The arithmetic of the budget is simple: Take in this much, spend that much, and try to make sure the first number is bigger than the second.

The first number — income — includes federal money, taxes, fees, lottery proceeds and so on and can’t, in the current ideological environment, include anything that could be characterized as new taxes. Some lawmakers have the dexterity to say fees aren’t taxes. In 2003, the Legislature cut funding for higher education while giving state universities the power to set their own tuition. Tuition rose faster than a bottle rocket, but lawmakers who engineered the swap still say they balanced that budget without raising taxes.

Politicians of both parties in Texas have become expert at not-a-tax-increase ways to raise money. Allowing slot machines at racetracks, or full casino gambling, is one. Getting rid of exemptions to current property taxes or sales taxes or business taxes is another, though each seems like a new tax to anyone who was previously exempt.

The state pays part of the cost of public education, with taxpayers in various locales picking up the balance, but cutting the state’s share and letting the locals pay more is under discussion this year. Like the college tuition dodge of eight years ago, it allows a lawmaker to say with a straight face that no taxes were raised — even as it forces school boards around the state to decide whether to raise local property taxes or cut their own spending.

That 2003 Legislature was plenty conservative, but it was pre-Tea Party, which means it didn’t fully share that movement’s loathing for government spending. This time, with an even bigger Republican majority in the House, spending will get a harder look.

At a Capitol forum last week, the head of the conservative Texas Public Policy Foundation, former state Rep. Arlene Wohlgemuth, R-Burleson, described a new hurdle for gambling lobbyists. Their argument to state lawmakers is that gambling would produce $1 billion or more in revenue for the state treasury. But a lot of the new Republicans elected last Tuesday don’t want the state to have access to new money of any kind. It would allow more government spending, and they’re against that.

That’s another reason the budget’s starting place is important. Some see the state’s economic situation in the traditional way: that lawmakers have to find money to keep current programs and services going. The assumption, usually unstated, is that there’s a financial problem but that nothing’s wrong with the government itself.

Sounds like the Tea Party never happened, right? Here’s the post-Tea version: Stop feeding the thing and watch it shrink.

It all depends on where you start.