Monday, April 18, 2011

Budget Update

There are six weeks left in the Regular Session. The House has passed a biennium budget spending $77.6 billion in General Revenue. House Appropriations Chairman Jim Pitts has said that he believes he sees another $4.3 to $4.5 billion in non-tax revenue the House would spend. For example, you have the $830 million in education funding coming to Texas now that the Doggett amendment has been removed. Additionally, the House Appropriations Committee voted out today several fiscal bills that would generate the following revenue for the biennium: $1.8 billion in payment deferrals; $1 billion in tax speedups; and $200 million from accelerating forfeiture of unclaimed property to the state.

Assume the House budget ultimately increases by $4.5 billion to $82.1 billion. The question is what number will it take to make a deal with the Senate in the Regular Session?

Senate Finance is scheduled to vote out its version of the budget on Thursday and take it to the Senate floor next week. I don't know the amount of the budget, but I believe that it will be in the $85 to $87 billion range. The real gap between the Senate and House when the budget gets to conference during the first week of May is likely to be $3 to $5 billion. At this point, it is anybody's guess whether that gap can be bridged by May 30.