Dewhurst says hike in taxes not needed
Posted on 12/13/2002 1:30:17 AM PST by MeekOneGOP
Dewhurst says hike in taxes not needed
He touts ideas to cut expenses, boost efficiency to offset shortfall
12/13/2002
AUSTIN - Lt. Gov.-elect David Dewhurst insisted Thursday that the state can handle its projected $5 billion revenue shortfall next year without a tax increase because there is room to cut expenses and improve efficiency in state programs.
"We're going to have to be creative. We've got to look where we can for nontax revenue," the Republican said, predicting that there will be no tax bills in the 2003 legislative session, which begins in January.
Speaking to members of the Texas Association of Business, Mr. Dewhurst also said he would like lawmakers to start working on the troubled school finance system next year, though it may take a couple of legislative sessions to complete the job.
And he repeated his position on the volatile issue of tax-paid school vouchers, saying legislators have too many other pressing matters to deal with next year.
"I don't see the time available this session to look seriously at vouchers," he said.
As he did in his successful campaign for the state's No. 2 job, Mr. Dewhurst said the budget crunch will top the list of priorities for legislators in 2003.
He offered a few examples of where he thinks the shortfall can be made up, such as tapping some of the earnings of the $17.5 billion Permanent School Fund and making greater use of generic drugs instead of brand drugs in Medicaid and other state health programs.
Also on the list of potential money-saving ideas is a review of eligibility levels for Medicaid and better leveraging of state and county dollars to boost federal Medicaid funding.
"I am looking for efficiency where we can provide some savings to the state and still cover the people that need to be covered," he said.
Mr. Dewhurst also pointed to attrition in state agencies as another possible source of revenue to meet the shortfall.
Regarding the possibility of higher taxes to address the deficit, he noted that all tax bills must originate in the House, which will have a Republican majority for the first time in more than a century.
"If I had to bet, I would bet that the odds are we won't see a tax bill come out of the House," he said.
Although the state comptroller has projected the revenue shortfall at $5 billion for the next two fiscal years, some lawmakers have said the amount may approach $10 billion to $12 billion.
Mr. Dewhurst said there "is no question we have to address school finance" next year.
"I hope we can do it quicker rather than later. I'd rather make progress this session than have to wait until 2005," he said.
However, he later added, "It may be that the ultimate comprehensive solution is incremental" and will have to be accomplished over the next two legislative sessions, in 2003 and 2005.
One of the biggest problems in the system is the large number of school districts that are closing in on or have reached the state's tax rate limit of $1.50 per $100 of valuation for operations. An estimated 408 of the state's 1,040 school districts are at the limit this school year.
Mr. Dewhurst voiced support for a proposal by Senate Education Committee Chairman Teel Bivins, R-Amarillo, to come up with about $1 billion in new state aid to help districts at or near the cap.
There are also long-standing complaints about the share-the-wealth provisions of the funding system that require high-wealth school districts to share their property tax revenues with less-wealthy districts. Mr. Dewhurst has said he wants to eventually do away with the revenue sharing.
Critics of the system have said that the state share of education funding has been slipping in recent years when compared with local property taxes for schools. Public schools in Texas are funded mainly with local property taxes and state aid, with a small amount of federal aid.
E-mail tstutz@dallasnews.com
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