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Expected surplus won't lessen 2013 budget fight

Published on NewsOK Modified: January 1, 2013 at 11:11 am •  Published: January 1, 2013

AUSTIN, Texas (AP) — Shortfall and sacrifice: that's how the Texas Legislature two years ago defended gutting $5.4 billion from public education, laying off thousands of public workers with slashed spending and stripping Medicaid to the bone.

The new budget s-word this time around? Surplus.

But when lawmakers next week begin the 83rd legislative session with a potentially record amount of unspent revenue — more than $8 billion, according to many observers — that money won't last long or go far.

Nor has Texas' far rosier economic picture put budget-writers in the mood to spend more or reverse historic cuts. The battle in 2013 will be over how much bigger — not smaller — the budget will get.

"The basic needs look like they can be taken care of," said Dale Craymer, president of the Texas Taxpayers and Research Association and former state official who has worked in the budget offices of both the governor and comptroller. "It's just going to be a fight for the icing."

The Texas economy is humming. Unemployment is at a four-year low of 6.2 percent, sales tax receipts are skyrocketing and money is pouring in to state coffers behind a new energy boom, fueled by oil gushing in West Texas and a fracking frenzy from North Texas to San Antonio. Even the Rainy Day Fund, the state's emergency piggybank, has replenished most of the $3.2 billion borrowed during the last session after much hand-wringing by reluctant conservatives.

Contrast that with 2011. As the country began lurching out of the Great Recession, lawmakers gathered at the Capitol facing a $27 billion shortfall and unemployment at a decade-high peak of 8.2 percent. They left after passing a budget that was $15 billion lighter than the previous one in a state that has thousands of new residents to serve by the day and is among the nation's fastest-growing.

"We're in a very different place than we were two years ago," said John Heleman, the chief revenue estimator for the state comptroller's office.

That may be true, but still in place from two years ago are expensive IOUs the state needs to settle.

Medicaid is the biggest one. Lawmakers must pay a $4.7 billion tab on the state's health program for its poorest residents and the disabled before writing a new budget for 2014-15. They'll write that check in a supplemental spending bill that will also need to pay for the $600-million cost of fighting devastating wildfires of 2011.

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