Analysis of House Budget Divides Lawmakers

Lawmakers offered dueling interpretations Thursday of a Legislative Budget Board analysis predicting that the state could lose hundreds of thousands of jobs if the House's budget bill is passed.

That legislation proposes cutting all state funding by 12.3 percent in the next biennium and reducing state general revenue spending by about $5 billion. 

The LBB report showed a potential loss of 271,746 jobs in 2012 and 335,244 in 2013. State Rep. Mike Villarreal, D-San Antonio — one of seven Democrats who voted Wednesday against sending the legislation, House Bill 1, to the full chamber — requested the analysis.

In a statement, Villarreal said, "The voters did not elect us to eliminate hundreds of thousands of jobs. We have to be smarter than this. We can't grow the Texas economy with a budget that destroys jobs, hurts neighborhood schools, and makes college more expensive. If Republicans were willing to fix the $10 billion budget hole they created in 2006 and tap the Rainy Day Fund, we could save these jobs and save our schools."

House and Senate leadership said Thursday that the study failed to include the effects that a tax increase might have on the state.

"The LBB report clearly shows that job creation is tied to the size of the economy, not the budget," Lt. Gov. David Dewhurst said in a statement. "What it does not calculate, however, are the dramatic job losses Texas would suffer if the Legislature raised taxes just as our economy is starting to rebound. You cannot expect to grow the economy and create jobs by growing bigger government."

House Speaker Joe Straus also took issue with the anlaysis. He said a fiscally conservative approach to the budget will help Texans in the long term. 

"Jobs are created when government is efficient and responsible and allows the private sector to flourish," Straus said in a statement. "I question the validity of the assumption that requiring government to live within its means will lead to a downturn in the economy — in fact, the opposite is true. The best way to jump-start growth is for the Legislature to keep taxes low and regulations reasonable to provide the opportunity for business to grow and thrive in Texas." 

Dewhurst and Straus pointed to a paragraph in the LBB report that said the job loss figures don't necessarily mean those positions will be eliminated from the current labor pool. The report says the figures also reflect jobs that might have been created if funding and revenue remained at current levels. "Since available revenue for the 2012-13 biennium is predicted to fall well below that amount, in large part due to the national economic recession, many of these job losses can be attributed to the steep downturn of the Texas economy during the past several years," the report says. 

HB 1 is scheduled for a vote on the House floor April 1.