How bad will the state budget deficit be? Too soon to tell

By now is all over the news. State officials are projecting that the shortfall the Texas Legislature is expecting for the next biennium could be as high as $18 billion.

Could it be higher? Well, you’d be the judge. Back in September when Texas House Speaker Joe Straus first mentioned the likelihood of a deficit, the estimated amount was $12 billion. Then, two months ago, at a House Appropriations Committee hearing, the figure went up to $15 billion.

This is in spite of Gov. Rick Perry, Lt. Gov. David Dewhurst and Straus recommending to all state agencies in January to cut their budgets by 5 percent.

But on the bright side, the state’s Rainy Day Fund, now estimated at $7.6 billion, is expected to grow to $8.2 billion by the end of the year. In addition, sales tax collections had a modest increase in April compared to the same month last year. Moreover, the unemployment rate has remained steady at 8.2 percent for several months, a sign that at least the state is not losing as many jobs as last year when the recession reportedly hit bottom.

So, with eight months to go before the 82nd Legislature convenes anything goes. Bur regardless of the final revenue projection State Comptroller Susan Combs makes on Jan. 10, the day before the legislative session starts, there is no doubt that the Legislature will face a shortfall.

Moreover, as Straus suggested to the Appropriations Committee this morning, no matter how much the shortfall is, don’t raise taxes.

In all, the big question mark for now is whether the projected shortfall will hurt less, as much, or, worse than the $10 billion deficit the lawmakers faced in 2003 when all kinds of services and programs were drastically cut to offset the loss of revenue.

Only time will tell.