July 9, 2011
Good magicians never reveal their tricks. So it stands to reason that most state lawmakers have little to say about the financial abracadabra they orchestrated during this year’s legislative session.
Instead of addressing the uncomfortable truth about Texas’ tax system, legislators left billions of dollars in dedicated fees and taxes unspent so that they could overspend general revenue and balance the budget. It’s a slick little trick that papers over some structural deficiencies.
But this sleight of hand amounts to kicking a serious problem down the road. And worse, it’s deceptive.
Most Texas lawmakers are loath to raise taxes. But over the years, they’ve sold the public on an assortment of narrowly tailored fees and taxes that are supposed to funnel money to endeavors such as improving trauma centers or reducing electricity costs for the poor and elderly.
Texans assume that the money allocated to these areas is actually spent as promised. When revenues run short, though, the Legislature pulls a tax and switch.
Lawmakers decline to spend the dedicated funds but then pretend to have more general revenue to fill in budget gaps. In other cases, they simply ignore the purpose of the tax and divert some of the money to other agencies.
As a result, those worthy priorities such as trauma centers and electricity discounts for the poor and elderly get short shrift.
Lawmakers have gotten hooked on this under-the-radar maneuver, preferring to quietly move the money around instead of tackling tough questions about why Texas’ tax structure continues to come up short.
This budget cycle, only about 60 percent of $10.5 billion in dedicated funds will be spent on intended causes.
What might have started as a stopgap measure has morphed into a bad budget habit.
State Sen. Kirk Watson, a Democrat from Austin, rightly calls this a breach of promise. And he’s urged his colleagues to reform a budgeting system that he says is built on debt, deception and diversions.
Watson has gotten some traction with his calls for a more honest approach to taxing and spending. Still, the continued hocus pocus underscores the need for a more significant overhaul of the tax structure.
When Texans buy specialty license plates, they believe they’re supporting causes ranging from animal shelters to bicyclist safety programs. And when they buy gas, they expect that the tax will be spent on roads and public schools. Lawmakers are breaking promises as they siphon off money from those and other funds.
The result could be an even deeper financial hole in the future. And then, that budget magic will look more like a budget morass.