Governor Calls on State Agencies to Find Additional Budget Savings

By Raul Torres, State Representative

A couple of weeks ago, Governor Rick Perry and the Legislative Budget Board (LBB) directed state agencies to identify an additional 10 percent savings (in five percent increments) in general revenue-related funding when reviewing their appropriations requests for the 2014-2015 biennial budget.

This directive is similar in scope to the one provided by the Governor prior to the last legislative session.  This starting point will help guide the Legislature when creating and passing the State’s budget next legislation session, which begins in January, 2013.  Appropriations requests by the agencies must be submitted to the Governor’s Office and LBB by the end of August.

The Governor is to be applauded for making this request because it will encourage additional efficiency and fiscal accountability in all state agencies. This projected savings from this action could be used to offset the two projected budget shortfalls that the next Legislature must resolve of which the total amount could be as much as $12 billion.

The first budget shortfall will take place at the beginning of the next session and is related to the 2012-2013 budget. The reason for this shortfall is because the Texas Legislature purposely underfunded the expected increase in HHS spending. This amount is estimated to be $4-$6 billion. In addition, the Legislature borrowed $2.2 billion from the 2014-2015 education budget and another $1-$2 billion from future revenues to complete the funding for HB 1 last session. You add this with the anticipated $1-$2 billion the Margins Tax usually under performs and what we have is a big financial problem.

Bottom line is that all this borrowing from the new budget needs to be paid back or the Comptroller will reduce the money available for spending in the 2014-2015 budget.  The second budget shortfall has to do with 2014-2015 budget which some people estimate could be short another $6-$10 billion.  As you can easily see the next Texas legislative session could be as difficult as the 82nd session.

As part of his Texas Budget Compact, Governor Perry has provided the following outline in order to ensure the State remains committed to responsible governing:

  • Practice truth in budgeting
  • Support a Constitutional limit of spending to the growth of population and inflation
  • Oppose any new taxes or tax increases and make the small business tax exemption permanent
  • Preserve a strong Rainy Day Fund and
  • Cut unnecessary / duplicative government programs and agencies.

Given the current economic trends and our growing State population, our State government must continue to act responsibly when spending taxpayer dollars if it expects to remain a strong economic power.

For the past three years everywhere I travel hard working Texans are asking their state leaders to find common sense solutions to our state’s many financial challenges and that is exactly what we did last session.

Last session I successfully passed a bill, with the help of Senator Mike Jackson, that is designed to eliminate wasteful government spending. I referred to this bill as our Lean Six Sigma legislation. Why is this bill so important to Texas? For two very important reasons.

First, because we need the money.  According to financial experts this program has the capacity to reduce government spending by an estimated $15-$20 billion every two years while at the same time improving state services and this additional revenue could be used to balance future budget shortfalls.

Second, this cost savings could be used to fund the increase demand for more funding in both education and HHS services.

We careful with politicians who are great at complaining and blaming others for the problems we have as a society, but fail to provide common sense solutions to fix them.

To view the letter to state agencies, please visit The Governor’s Letter.  To view the LBB’s instructions to state agencies, please visit The LBB’s Letter.

I end with this quote, “Effective leadership is not about making speeches or being liked; real leadership is defined by results.” What kind of leader do you want in 2012?

you can learn more about Rep. Raul Torres by visiting his website

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