Texas Legislative Session Issue Update: Texas Budget

July 7, 2011

Dear Friend:

This legislative session, as we faced the worst economy in 75 years, Texas passed a responsible balanced budget – one which did not raise taxes and cut 8.1% in total spending. Last November Texans sent a clear message that they wanted to see less spending of their hard-earned taxpayer dollars and I believe this budget is a reflection of that wish.

To balance the budget with no new taxes, some tough cuts had to be made to many state agencies. The natural resources budget was cut by 25%, general government operations were cut by 19%, the judiciary by 13%, and the legislature by 9%.

Education is by far still Texas’ number one priority; in fact, 43.3% of the entire state budget is dedicated to public education (1.9% larger than last biennium). The 5.6% “cut” to education is actually just a reduction in the growth of the education budget, rather than a true cut. Only in government is lowering a projected increase in funding considered a budget cut.

This session, I received pressure from several unions to vote to drain the Economic Stabilization Fund (Rainy Day Fund). Many threatened that if I didn’t support this action, teachers would lose their jobs. However, the size of the Rainy Day Fund relative to the size of the entire state budget is less than 4% and I’m not comfortable having anything less than that. Families know that as a general rule you should keep at least 10% in reserve funds for emergencies. In fact, collectively, the school districts in Texas have $7.5 billion in their own reserve funds. Most of the school districts in Parker and Wise counties have more in their reserve funds, as a percentage of their entire budget, than Texas does. For example, Northwest ISD’s reserve fund is 18.22% of their entire budget, and Aledo ISD’s is 26.7%.

We did vote to spend $3.2 billion from the Rainy Day Fund to address the shortfall from the previous budget cycle, and $80 million to pay for the wildfires in Texas. Additionally, as we approach hurricane season, we need to ensure that we have reserve funds to address any possible catastrophes that could easily cost the state $1 billion or more.

I’m pleased that we were able to pass a budget that reigned in state spending, did not raise any new taxes on hard working Texans, and preserved a prudent balance in our Rainy Day Fund. These policies will help to ensure that Texas continues to be the most prosperous state in the nation.

Thank you for the opportunity to serve you in the Texas Legislature.

Thank you,

Phil King
State Representative