Wednesday, April 06, 2011

Zero-Based Budgeting Finds Savings for Texas State Budget

House Bill 1 passed the Texas State House of Representatives late Sunday night. Before the bill was adopted, Appropriations Chairman Jim Pitts said, "Today we take up House Bill 1, the state budget for 2012-2013. This budget does not raise taxes. It does not rely on any spending and any new tax revenue to pay for programs or services. This budget does not spend any federal stimulus money. This budget does not spend any of the Rainy Day Fund on any ongoing programs or services in the next biennium. Finally, this budget does not grow government."

The vote on HB 1 was mostly along party lines. Two Republicans and all of the Democrats voted against adoption. Now the bill goes to the State Senate. For the numbers - the House bill uses a budget of $164.5 billion, which is $23 billion(12.3%),less than the current budget. This was accomplished by implementing the utilization of zero-based budgeting. This is a fundamental reform brought by this legislature. Zero-based budgeting forces each agency to start at zero and not a current appropriation levels. Each agency has to take a hard look at their budget and justify needs. This is where the needed savings were found to balance budget.

We can expect the budget coming out of the state senate to be 5 or 6 billion dollars more,it is estimated. Then the finished product will go to conference and the final budget will be hashed out. The goal for fiscal conservatives is to have the final budget to look more like that which was adopted by the state House of Representatives. Senators expect a vote on April 18th for moving their bill out of committee.

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