DALLAS — Texas’ record budget shortfall is becoming a political issue as Democrats accuse Republican Comptroller Susan Combs of withholding accurate estimates ahead of the November elections.
The state’s revenue estimate for the next biennium could fall as much as $18 billion below the current budget when the Legislature convenes in Austin in January.
But Combs has not updated actual projections in advance of the November election. A spokesman said the office is still analyzing the numbers that must be submitted to the Legislature in January.
Uncertainty over actual revenues prompted Sen. Kirk Watson, D-Austin, to write a letter to Combs seeking a clearer picture of where the state stands in advance of the 2011 session.
“A private business of any size should never fly into a fiscal storm blindly, and neither should Texans or their elected officials,” Watson wrote. “Without a clear picture of the state’s financial condition, we find ourselves in the situation of working on a problem that has not yet been actually defined.”
Bill White, Republican Gov. Rick Perry’s Democratic challenger, agreed that Combs should update revenue estimates on a regular basis.
Perry called the demands for numbers a political stunt and said it was “bizarre” that White would want to know the exact size of the deficit before January.
That is when Combs is required by law to provide estimates for the coming two years. Perry said Combs would produce the numbers “at the appropriate time.”
“Only a professional politician could call knowing the facts on our finances 'bizarre,’ “White responded. “As governor, I will provide monthly public reports on projections for the entire fiscal year.”
Combs recently did reveal to bond analysts that Texas would have a $1.3 billion shortfall at the end of the current fiscal year, but that did not affect the state’s triple-A ratings from Moody’s Investors Service and Fitch Ratings.
Standard & Poor’s rates the state’s general obligation bonds AA-plus. Texas has a healthy rainy-day fund.
Combs’ office also provides monthly reports on sales taxes, the largest source of revenue for the state. During the first 11 months of the fiscal year, sales tax revenues were $1 billion below Combs’ estimates.
In January of odd-numbered years, the comptroller submits an official estimate of state revenues to open the legislative session.
The Texas Legislature meets only in odd-numbered years and produces two-year budgets.
Combs has not updated her revenue estimates this year, though she is allowed to update them at any time.
Like Perry, Combs often touts the state’s sound economic condition compared to other states. Combs does not face a challenger for re-election, but Perry faces what could be one of his stiffest challenges from White, a popular former mayor of Houston.
Perry, who inherited the office when former Gov. George W. Bush ran for president in 2000, is the state’s longest-serving governor.
Though Combs has not specified the size of the shortfall, estimates of an $18 billion gap appear to be a consensus based on the analysis by legislative leaders. Rating analysts have also used that figure in their reports.
“Forecast cash balances narrow considerably through fiscal 2010,” Fitch analysts wrote in a report on a Texas GO bond rating this month. “A structural gap of up to $18 billion is forecast in the next biennium, to be addressed by the next Legislature beginning in January 2011.”
