State Budget Requests:

Agencies told not to exceed last year’s budget, prepare for other possible cuts

State budget problems haven’t gone away. News from the State Comptroller’s office this week noted 26 consecutive months of increasing sales tax revenues. And, Texas franchise tax receipts of $4.3 billion through May have already surpassed predictions of just $4 billion for all of 2012. Yet state agency officials were reminded earlier this week that budget constraints will once again be a big part of the upcoming 83rd Texas Legislature, which convenes in January 2013.

With the next legislative session on the horizon, agency officials are preparing their 2014-2015 legislative appropriations requests (LARs) that will become part of a budget roadmap for members of the Texas Legislature. And, even with a stronger-than-predicted growth in state revenue, the Legislative Budget Board (LBB) issued a memo to the heads of state agencies, commissions, institutions and agencies of higher education and appellate courts and justices instructing them that with few exceptions, they are not to increase their basic budget requests over last year’s amount.

“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,” said House Speaker Joe Straus.

There was even more squirming when the LBB asked for a supplemental request that would show how agency officials would, if necessary, reduce their baseline request by an additional 10 percent relating to General Revenue and General Revenue-Dedicated funds.

The LBB memo also alerted agency officials that they should be painfully aware that “agencies may be asked to reduce their fiscal year 2013 budgets should state fiscal conditions warrant it.”

There was not much good news in the LBB edict.

Agency officials are just hopeful that the 83rd legislative session will not reap the $14 billion in cuts made in state funding last session. Those cuts left public schools laying-off teachers and employees, institutions of higher education increasing tuition rates even higher and state agencies in many cases having to do even more with fewer resources – human and financial.

The only good news going into the budget-writing session is that the kind of cuts made last session are not likely to be necessary. Or at least that’s what Sen. Steve Ogden (chair of the Senate Finance Committee) says. Ogden, who is not seeking re-election, told the Bryan-College Station Eagle that state revenues in Texas are growing. “The Texas economy was the last in the recession and the first out,” he said, even predicting the state will have a “small, but not insignificant” budget surplus.

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