November 29, 2010
State Sen. Kirk Watson has set out to inject a little sunshine into Texas’ often opaque budgeting process.
The Austin Democrat, fresh off re-election to a second term, recently laid out an “honesty agenda” that would crack open the state’s budget and finances for all to see and set a course for future budget stability.
And Watson sees no better time than now, when Texas is staring at a gaping budget shortfall of more than $24 billion, for legislators of all political stripes to embrace his reforms.
His suggestions include:
• Requiring the Legislative Budget Board, a group of leaders from both legislative chambers, to receive regular updates on the state’s fiscal position in meetings open to the public.
• Suspending the collection of any dedicated tax or fee if it is not being spent for its intended purpose.
• Creating a special commission to create a plan for fixing the state’s long-term budget imbalances.
Watson sat down with the American-Statesman last week to discuss his budget reform package. Here is an edited account:
What prompted the ‘honesty agenda’?
I was somebody who paid pretty good attention to what goes on at the Legislature, but in my first legislative session, I was very surprised by how the budget process functioned. It may be the old mayor in me, but the openness and transparency that goes on in putting together a city budget is significantly greater than what you see at the state.
Why push these reforms now?
It’s becoming harder and harder to balance the budget in a sustainable way. As a result of that, it is becoming more difficult for Texas to invest in things that are patently good for Texans and for our economic growth in this state. This may be the last chance we have to start making the kinds of fundamental changes that will help us make investments for the good of Texans.
You call for more budget and finance information to be made available to the public when the Legislature is not in session. Legislative leaders and the state comptroller are in regular communication about the state’s revenue outlook during that period.
If the key decision makers have that information, why is it important for the public to be privy to it, too?
The leadership is talking to each other. But they ought to be talking to the public.
It is also important that the legislators who are not part of the leadership but are elected to be a voice for voters know what is going on so they can serve as advocates.
If nothing else, it would force more information to be talked about. I think government does a better job when the public is aware of what is going on.
The November election was, to some extent, a referendum on fiscal and economic issues. Are the election results not an indication that Texans are happy with the fiscal stewardship of the state?
The last election cycle proved that we need greater transparency. That is one of the reasons I wanted us to have the numbers out there (referring to a letter he sent to Comptroller Susan Combs in September calling for an updated revenue estimate).
I think that Texans believe they’re getting something that they’re not getting.
I’m not sure Texans are aware that they pay taxes and fees to their state that are supposed to go for specific purposes and then that money is not appropriated for those purposes.
A decade ago, there was a little bit over a billion dollars of general revenue dedicated for a purpose. But at the end of this decade there will be more than $3.5 billion. That’s a lot of broken promises to people in this state.
If you were to eliminate that $3.5 billion of dedicated revenue, that would significantly reduce available revenue. It would harm the same areas that you say require investments, such as education and public safety. How do you balance the need for process reform and the need for available revenue?
The scar tissue of some bad practices has built up and is so dense that it is not the kind of thing that you can responsibly do away with overnight. It is going to require a weaning off of these practices to avoid really significant crisis.
It has to happen in order to be honest with Texans, but we have to do it in a smart way.
By calling your reforms an ‘honesty agenda,’ are you not implying that decisions in the past and the leaders behind those decisions have been dishonest?
Habits get built up; things start looking normal.
One of the things that, session after session, people from both parties look at and say we need to stop doing is diverting motor fuels money from purposes other than building road projects.
Before the last session, Gov. Rick Perry, Lt. Gov. David Dewhurst and then-Speaker Tom Craddick committed to implementing a plan to end that diversion. There is no such plan.
These less than open and candid approaches to raising revenue and spending it, they start feeling normal after a while. Promises get made that supposedly are going to satisfy that, and then the promises get broken. We ought to just agree that we’re going to be honest about this and approach it in an honest way.
Budget honesty alone isn’t going to balance the budget. Do you have other suggestions for how to approach the budget shortfall?
There are only three ways to balance the budget, and that’s why the honesty agenda has to be in place: cuts, cash and the kitty.
There will be significant cuts. Cash — people say right now that cash is off the table. The kitty, of course, is a reference to the rainy day fund.
Absent reforms in the way we go about our budgeting so that we get ourselves off of this path, I’m not going to vote for just blanket cuts that could have such a negative impact on people’s lives.
I’m not going to vote for any changes in the taxes or fees, where you increase somebody’s taxes or you increase somebody’s fees, until there are reforms, in part because I can’t promise my constituents that the money raised will go for the purpose they believe it is going to go for.
And I won’t vote to spend our savings account, the rainy day fund, if all it is going to do is mask over structural problems in our budget.
If your reforms were adopted, would you support a budget filled with, as you put it, ‘bad option after bad option’?
A lot of cuts may need to be done in order to balance this budget, but they are just bad options because of the impact they have on people’s daily lives.
Some people are talking about doing away with certain types of tax exemptions and things like that, and I don’t consider those to be good options, particularly in a tough economic time when people are struggling.
Ultimately, the budget has to be balanced. But I’m not going to vote for any of it unless there is reform that gets on a path that will keep us from having to be dealing with bad option after bad option, legislative session after legislative session. If we think 2011 is bad, just wait until 2013.
Among your recommendations is to appoint a special commission of business leaders and others to develop a plan to address the state’s long-term budget imbalances. But will the recommendations of a blue-ribbon panel matter if there is not the political will to make the tough decisions?
I’ll rely upon the public, the voters, to recognize that we need to make sure that we have people with the political will to do what is in the best interest of the state. It comes down to those of us who have the responsibility to act in a responsible way.
We know that we’re behind on roadways for the future, we know that there is a state water plan that isn’t funded, we know that we have a lot of these needs. Let’s have a serious discussion about how we meet those needs.
There is not a better time to do that than when you have the clarity of purpose of the kind of budget shortfall we’re looking at.
Is this the beginning of a platform for pursuit of higher office?
I was just re-elected to the Texas Senate, and I love being a Texas senator. This is something I’ve been working on since I became a senator.
What sort of chances do you give your reform package?
I’m very positive about it, and here’s why: These are basic reforms. These are necessary reforms. And they aren’t partisan.
What I’m offering is something that you’re going to see an opportunity for agreement on, because I think the fundamental principles of being honest in the way that revenue is collected in the state and honest in the way that revenue is spent is something that we all can agree on.