[Jack.Kerr]

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State’s structural deficit $10 billion, official says

By Kate Alexander | Monday, January 31, 2011, 11:13 AM
Texas will have a persistent $10 billion hole in its budget for years to come unless legislators address it this session, the state’s chief revenue estimator told senators Monday morning.

Pressed by Democratic senators on the Finance Committee, John Heleman said the state will have a $10 billion structural deficit in future budgets largely because the business tax has underperformed and the 2006 property tax swap has cost more than expected.

The revised business tax was supposed to bring in $6 billion per year. Instead, it it is generating $4 billion.

The cost of the property tax relief is also running about $1 billion per year above expectations.

“That gap is not closing up,” said Heleman, chief revenue estimator for Comptroller Susan Combs.

Republican state leaders have attributed the state’s budget woes to the recesssion and have dismissed calls to raise taxes to deal with the current budget shortfall, estimated at $15 billion to $27 billion, saying they can cut their way out of that hole.

But the structural deficit would mean legislators would have to come back in 2013 and beyond to deal with at least another $10 billion hole.

Earlier, Finance Chairman Steve Ogden, R-Bryan, said his committee would tackle the toughest issues first: health and human services and education. The committee will meet Monday through Thursday and will continue past 6 p.m., if necessary, to avoid Friday hearings.