TX Faces $5 Billion Deficit as Republicans Gain Control of State Legislature

AUSTIN (AP) — Republicans are set to control both houses of the Legislature for the first time in 130 years, just as the state sinks into a massive money mess.

The budget figures to be the overriding issue during the upcoming legislative session.

After a decade of running surpluses, state government faces a budget shortfall of at least $5 billion for the next two years, according to the comptroller.

The shortfall — the amount of extra money needed to keep state services at current levels — could go even higher, Comptroller Carole Keeton Rylander says.

Cuts in spending may be in the offing because Republican legislative leaders and GOP Gov. Rick Perry say they don't want to impose new taxes.

"We've got some real challenges in front of us," said Lt. Gov.-elect David Dewhurst, who will preside over the Senate. "Arguably this next session is going to be one of the most competitive sessions, toughest sessions, in the last 12 years."

Lawmakers are seeking to reform insurance industry oversight in the wake of skyrocketing homeowners' premiums. Perry has said he will declare insurance an "emergency" issue, meaning legislators can pass insurance bills in the first 60 days of the session.

There is also a tort-reform movement afoot, in response to soaring medical malpractice insurance rates that have forced some doctors out of business. Insurers blame rising premiums on the cost of defending against malpractice lawsuits.

One Republican senator has filed a bill that would limit noneconomic damages, which juries sometimes award to cover plaintiffs' pain and suffering.

Plaintiffs' lawyers are "going to fight it until the last dog dies," said Jack McGehee, president of the Texas Trial Lawyers Association.

Legislators are also looking to overhaul the state's system of financing public education. School districts across the state are pushing to change or abolish the so-called Robin Hood system, under which money from affluent districts is sent to poor ones.

One of every four school districts in the state has hit a legal limit on its property-tax rate, at $1.50 for every $100 in property value.

But it's a mystery where lawmakers would get money under a different school-finance system.

Presumptive new House speaker Tom Craddick, R-Midland, said the issue is so thorny it could require a special legislative session after the regular, 140-day session ends.

"School-finance reform is something that has to be tackled," Craddick said. "We've got to do something with it."

Craddick, who toiled for years as one of the few Republicans in the House, is riding the wave of the GOP's takeover of state government.

Republicans already held all statewide offices. Now they dominate the House too, with 88 Republicans elected to the 150-member chamber in November.

In the Senate, Republicans increased their advantage to 19-12 in the recent election.

Just as they had no hope of electing one of their own as speaker, few Democrats expect to make big strides on their pet issues. Many simply are looking to play defense.

"I'm going to work very, very strong to have no cuts for children," said Rep. Dora Olivo, D-Rosenberg. "That's going to be an important issue for us, whether it's health care, whether it's child care, whether it's education issues."

The Mexican American Legislative Caucus, made up mostly of Democrats, will work on those issues, she said.

Large chunks of the current $114 billion biennial budget are dedicated to areas that can't easily be cut, including education and children's health care.

Even in places where cuts might be made, lawmakers face tough choices. For instance, do they abandon a $1.24 billion teacher health insurance program that the 2001 Legislature passed with much fanfare?

In public remarks in December, Perry and the new legislative leaders hinted at the cutbacks to come as they stressed improving the efficiency of state government.

"The issue is spending," Perry said. "The hard-earned tax dollars sent to Austin by taxpayers must be invested wisely, not viewed as some blank checkbook."

It remains to be seen what reforms if any and how deep the GOP can accomplish in TX. It takes 21/31 state senators to conduct much of the business of the state, and the GOP has 19 senators, one or two of whom vote mostly Democrat.

After a decade of running surpluses, state government faces a budget shortfall of at least $5 billion for the next two years, according to the comptroller.

How can this be? Texas had/has a Republican governor

The election was in Nov. and someone just woke up this morning and realized the decades long surplus is gone and there's a deficit to boot?

No, in the campaign, Democrat gubernatorial candidate A.R. "Tony" Sanchez, Jr., predicted that the TX deficit would reach $10 billion. It was Comptroller Carole K. Rylander (R) who set the figure at $5 billion over two years, or $2.5 billion in 2003 alone. Perry said spending will be cut with no tax hikes to make up for the shortfall. I still think some "user fees" will be raised.

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