AUSTIN, Texas — The Texas Legislature will face a budget shortfall of at least $11 billion when it meets to write the next state budget in 2011, a key state official said Monday.
The shortfall is the projected difference between available revenue and the cost of maintaining services at their current levels in the next two-year budget. The shortfall is mainly a result of lower-than-expected sales tax receipts.
John O’Brien, director of the Legislative Budget Board, told a committee of House budget writers that the estimate is conservative and could grow to as much as $15 billion.
The available revenue also will have to be used to cover any holes in the current budget, including a Health and Human Services Commission shortfall of more than $1.3 billion caused by a recession-induced surge in Medicare enrollment.
State agencies have submitted proposals to cut their current-year budgets by 5 percent. But those savings will only amount to about $1.7 billion, O’Brien said.
John Heleman, the state’s chief revenue estimator, said sales tax returns are beginning to rebound after months of double-digit declines. February sales taxes declined 8.8 percent compared to February of 2009, he said.
“It’s certainly still down from last year, however, it’s down less than 10 percent,” Heleman said. “One month certainly doesn’t make a trend, but it’s encouraging to see we’ve now begun to move in the right direction.”
The state’s Rainy Day Fund is expected to have a balance of about $8.2 billion.
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