Enterprise

Tight state budget will challenge Phelan, lawmakers


House Speaker Dade Phelan and his fellow lawmakers got some good news Monday from the state comptroller, but that’s in relative terms. Glenn Hegar said the revenue estimate for the two-year state budget cycle is only 0.4% less than his estimate in 2019 for the last session of the Legislature. In dollar amounts, the House and Senate face a budget deficit of about $1 billion instead of the $4.6 billion deficit that Hegar was forecasting just a few months ago.

With all the ravages of the coronavirus on Texas and its effect on our economy, that’s not too bad. Drastic cuts in state spending will not be required, even if larger increases for education or health care aren’t possible either. Basically, the state budget for the next biennium will be about the same as it was for the current two-year cycle.

Texans should be grateful for that news. Many other states are in much worse shape. Our relative fiscal health is a tribute to our resilient state economy. In fact, many people and businesses have moved to Texas from high-tax states in recent years, helping our bottom line and detracting from theirs.

But it’s also no secret that Texas has some of the lowest state spending on the poor and needy in the nation. Texas is one of only 14 states that has not expanded Medicaid under Obamacare because Republican lawmakers feel that would be an endorsement of Obamacare. That partisan decision deprives the state of $10 billion per year in increased federal support for Medicaid, meaning that many low-income residents don’t get the health care they need.

At a minimum the Legislature should not reduce its below-average level of social spending. If there are modest, targeted ways to spend a little more on these pressing needs, the House and Senate must consider them. The same goes for public education — no retreat and whatever increases are possible to help more students and teachers.

Even though the Legislature has almost the same amount of money to work with as it did two years ago — about $112.5 billion — it still faces a challenging session. The small amount of inflation and factors such as salary increases for state employees mean that the state budget needs to increase slightly each biennium just to provide the same level of services.

Another piece of good news is that the state and national economy are widely expected to rebound this summer or fall when coronavirus vaccines have beaten back this pandemic. Businesses should be allowed to fully reopen and many of the unemployed would be called back to work. But lawmakers can’t count on that, and they have to work with the revenue estimate the comptroller has given them. Tax increases of any kind are unlikely since neither lawmakers nor voters want them.

The governor and lieutenant governor have been in this position before, but this will be the first time Speaker Phelan leads the House of Representative through a session. We believe he can do this, but it will be a dramatic test of his leadership. He will have to manage a lot of competing interests help bring a solid state budget to the governor at the end of the session in May.

With all the turmoil in Washington right now, Texans must not be distracted from what is happening in their state capital. The next five months will demand the complete focus of every member of the House and Senate. The decisions they make will affect their constituents for the next two-year budget cycle and beyond. Hard work and thoughtful votes must follow.



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