1. www.cppp.org The State Budget Surplus: Fact or Fiction The State Budget Surplus: Fact or Fiction Rotary Club of Dallas January 24, 2007 Eva DeLuna Castro, Senior Budget Analyst deluna.castro@cppp.org (512) 320-0228 x 103

2. www.cppp.org

3. Quick Texas Budget Facts Legislative process, not executive (gov.) Biennial, not annual (fiscal year starts in September) Cash basis of accounting, not accrual Availability of General Revenue (GR) is what matters, not All Funds 2006-2007 cycle: $142 billion in total spending, but 34% ($48 billion) is federal funds, and 18% is constitutionally or statutorily earmarked (“Other” or “GR Dedicated”). All-funds spending is about $3,000 per capita, annually; Texas perennially ranks 49th or 50th among the states in spending (same for per-capita state taxes).

4. www.cppp.org How Much Money Will There Be? For 2008 and 2009, the Comptroller estimated that legislators will have $82.5 billion available for general purpose spending (of that, $7 billion is 2006-2007 revenue that won’t be spent by August 2007 — the current budget cycle’s “ending balance”) plus $8.1 billion in the Property Tax Relief Fund and $4.3 billion in the “Rainy Day Fund” (5% of revenue)

5. www.cppp.org How Much Are We Already Spending? For 2006 and 2007, the Comptroller reports $68.2 billion in general purpose spending, but: In addition to that, almost $600 million out of the “Rainy Day Fund” is being spent on child protective services (CPS) reforms And $82.5 B revenue, 08-09 - 68.2 B spent, 06-07 $14.3 billion “surplus”

6. www.cppp.org Why Isn’t That Really a “Surplus”? $14.3 billion Revenue in Excess of 2006-07 Spending Needed for K-12 (full cost of tax cut; enrollment, other HB 1) Higher Ed: formula funding changes for enrollment, costs $4.5 billion $1.7 billion

7. www.cppp.org But Wait ! There’s More Health & Human Services: entitlement caseloads & costs; General Revenue for CPS “Truth in Spending” (GR dedications for parks, System Benefit Fund, etc.) OTHER: Prisons; Business/ Eco. Devel.; Judiciary; General Govt.; Worker Pay/Benefits $3.7 b >$2.5 b $1.9 b left

8. www.cppp.org 2010-2011 Budget: $5.8 Billion Gap Between Tax Cut Cost & Revenue

9. www.cppp.org From Taxpayer’s Point of View

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