State Agencies Ordered to Propose Budget Cuts

State agencies looking for money in next year's budget won't find any — at least not at first. State legislative leaders ordered them to cut 10 percent from their current budgets when writing their spending proposals for the next two-year budget.

No programs or services are being cut right now. Instead, agencies preparing their budget requests in anticipation of the legislative session that begins in January are being asked to show what they would do with less money. Lawmakers cut the state budget during their 2011 session and some program advocates and agencies were hoping that, with increases in sales tax and other state revenues, some of those cuts could be restored in 2013.

But the Legislative Budget Board — headed by House Speaker Joe Straus and Lt. Gov. David Dewhurst — asked the agencies to assume they'll have 10 percent less to spend in the next budget than they have now.

"Unlike Washington where spending increases are automatic, Texas has maintained a balanced budget by forcing government to look for savings first — ensuring taxpayers' hard-earned money is put to its highest and best use," Dewhurst said in a statement, leaving open the possibility that this starting position isn't final.

Straus framed it as a planning exercise.

"These instructions offer important guidance as we plan for the next biennium," Straus said in a news release. "While our revenue growth has been healthy this year, we must plan conservatively, which is why we have asked agencies to hold the line on spending. By identifying possible spending reductions in the next biennium, agencies can prioritize their most critical functions and programs. These instructions will also leave us prepared for a slowdown in revenues as the national economy struggles to recover. I look forward to working with state agencies as they identify efficiencies and plan responsibly for our state's future."

In what has become a standard biennial exercise, the legislative leaders and the governor asked the agencies to show what cuts would look like in the next budget — without actually cutting any programs or services.

In a memo from the LBB and the Governor's Budget Office, agencies learned that they're not allowed to request more general revenue money — state funds, as opposed to federal and other funds — than they spent in 2012 and budgeted in 2013. The agencies were also asked to submit proposals showing what they would do if they had to cut 10 percent from those current budgets.

As is usually the case, several areas were exempted, including some of the most expensive programs in state government: the Foundation School Program; money for debt payments; Medicaid entitlement programs; the Children's Health Insurance Program; foster care; adoption subsidies; permanency care assistance; and the state's contributions to state pension and employee group benefit plans.

Notably, prison and other criminal justice and state police and security programs were not excluded from the budget cuts.