Combs: Can’t close $4.3 b deficit with cuts alone

Austin American-Statesman 3/3/11
Combs: Can’t close $4.3 b deficit with cuts alone

Comptroller Susan Combs lent her voice to the calls for using some of the state’s rainy day fund to help close the $4.3 billion deficit in the current budget.

“I don’t know how you get to $4.3 (billion) with cuts. I really don’t know how you do it,” Combs said during testimony to the House Appropriations Committee Thursday morning.

Agencies have already trimmed their 2010-11 budgets, which will leave a $3 billion hole left to close once those cuts are codified by the Legislature. Combs said she is skeptical that enough could be found in agency coffers in the remaining six months of the fiscal year to cover the rest of the deficit.

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In running her own small business, Combs said she never emptied her bank account because she never knew when the next drought would come. “You are talking about economic drought,” Combs said.

Texas Politics blog Houston Chronicle 3/3/11

Combs weighs in on rainy-day fund; Pitts has more revenue options


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That deficit - due to lower-than-forecast tax revenues -- is part of a shortfall through the next two years estimated at $15 billion to more than $27 billion. The larger shortfall number includes the money needed to continue current services to a growing population through the next two years.

Pitts also has a plan for whittling down the shortfall through the next two-year budget period. They include tax collection changes that he said could yield $3 billion, and a measure to defer payments that would yield another $2.4 billion.

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Looking at the $4.3 billion deficit in the current budget period, Combs agreed that the options include reducing appropriations this fiscal year, delaying spending; or appropriating "some other available resource such as the rainy day fund," or some combination.

Combs said that as a business owner, she's never emptied her banking account. But she also said, "I don't know how you get to $4.3 (billion) with cuts."

(snip)

If the state defers a payment, she said, "you have to unwind it at some point." The biggest deferral is a $1.8 billion to schools, with some smaller ones possible.

Huffington Post 3/3/11

Bill Gates On States' Accounting: 'The Guys At Enron Never Would Have Done This'

LONG BEACH, Calif. -- During a second appearance onstage at the annual TED conference, Bill Gates spoke out against worsening state budget deficits caused by accounting "tricks" he said would make Enron's former executives blush.

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The former Microsoft chief executive, now the co-chair of the Bill & Melinda Gates Foundation, said youth and education programs stand to lose the most as a result of the gaping holes in state budgets.

"It really is the young versus the old to some degree. If you don't solve what you're doing in health care, you're going to be deinvesting in the young," Gates said. "With the kind of cuts we're talking about, it will be far, far harder to get these incentives for excellence or to move over to use technology in the new way."

Remedying state budget crises will take better accounting, better tools, and more respect for leaders who step up to address these problems, Gates argued. "We need to reward politicians," he said. "Whenever they say there are these long-term problems, we can't say, 'Oh, you're the messenger with bad news? We just shot you.'"