Friday, January 8, 2010
By ROBERT T. GARRETT
The Dallas Morning News
Texas comptroller says lagging sales tax receipts no cause for panic
AUSTIN — Four months into its new two year budget, Texas already is nearly $1 billion behind its expected pace of sale tax collections, according to new figures released today.
There’s no need for panic, though, said Comptroller Susan Combs.
“It is expected the double-digit declines in tax collections seen over the last half-year will first moderate with collections returning to growth during the first or second quarter of 2010,” she said.
Still, while Combs a year ago forecast essentially flat sales taxes receipts in the budget year that started Sept. 1, they’ve decreased by 12.9 percent in the first four months.
To meet Combs’ biennial revenue estimates, Texas needs to collect nearly $44 billion from its revenue workhorse, the 6 ¼-percent state sales tax. It produces 57 percent of state tax revenue and about a quarter of overall funds, including federal money.
But just one-sixth of the way into the new two year budget, it has collected only $6.3 billion.
Last year, collections from September through December were nearly $7.3 billion.
The state is expected to have $8.2 billion in its rainy day fund by the cycle’s close on Aug. 31, 2011. But a 2006 tax swap isn’t paying for school property tax cuts, creating a “structural deficit” that has officials nervous.
They are closely watching sales tax receipts and, as a precaution, soon may order agencies to submit suggestions for trimming spending.
For several weeks, the state’s GOP leaders have discussed the possibility they’ll ask for ideas on what to cut.
On Friday, though, U.S. Kay Bailey Hutchison called for immediate cuts.
Said Hutchison, who has challenged Gov. Rick Perry in the March 2 primary for governor: “We cannot afford to wait. Governor Perry should have already done this.”
She added that it’s “imperative that state agencies start doing all they can now” because “experts predict that the state will face a multi-billion dollar budget shortfall” in next year’s session.
Perry spokesman Mark Miner replied that in 2003 the governor and lawmakers, facing a $10 billion shortfall, “cut spending and successfully balanced the budget without raising taxes. If Senator Hutchison and her colleagues in Washington would focus on cutting federal spending, America wouldn’t be in its current financial mess.”
Aides to Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus, R-San Antonio, appeared close to agreement on a draft letter asking for spending-cut options.
“We have been working with the lieutenant governor and speaker on a letter for several weeks,” said Perry press secretary Allison Castle.
Since Republicans took command of the Legislature in 2002, Perry, Dewhurst and former Speaker Tom Craddick co-authored such letters in both bad times and good – such as in 2006, when they were pooling money for a school finance overhaul that included the tax swap.
Usually, the goal for reductions is set at a percentage of agencies’ total spending, though prisons and basic funding of public schools are among exempted programs.