Texas speaker says state must consider creative cost savings like 4-day work weeks

Straus says state must get creative with budget

AUSTIN, Texas — Republican Speaker Joe Straus told House budget writers Tuesday that they’ll have to handle a state shortfall of at least $11 billion without new taxes, but he raised the possibility of unpaid furloughs and four-day workweeks for state workers.

“Increasing taxes would restrain economic growth and hinder our ability to create jobs,” Straus said at a meeting of the House Appropriations Committee. “Come next session, I’m confident that we can make thoughtful, responsible decisions to balance our budget, but this will require tough choices, significant cuts in some areas and perhaps totally new thinking in others.”

Lt. Gov. David Dewhurst, who presides over the Senate, also is opposed to tax increases.

Texas’ current budget is over $182 billion in state and federal dollars. The biggest chunks of spending are on education and health care.

The budget shortfall, which officials said Tuesday could be as high as $18 billion, is largely a result of the national recession. It’s the projected difference between available revenue, mostly from lower-than-expected sales taxes, and the cost of maintaining services at their current levels. The state’s Rainy Day Fund is expected to have a balance of about $8.2 billion.

“Because so much of our general revenue budget goes to personnel, I hope that you will find creative ways to contain personnel costs and limit payroll growth,” Straus told the committee. “You might consider the impact of freezing higher-level salaries or limiting new hires to only those essential to the public safety and welfare of our citizens.”

He said Texas must look at what other states are doing to handle their budget shortfalls, including unpaid furloughs and four-day workweeks.

Straus also mentioned imposing moratorium on all new programs and services that require state money and a prohibition on issuing state bonds because of the ongoing cost associated with debt.

“I’m not advocating for any one of these choices, in particular, but I do know that every cost savings idea must be on the table.”

Later during the meeting, committee Chairman Jim Pitts, R-Waxahachie, said legalized gambling would be a possible option.

“I just tell it like it is,” he said. “It will be helping us in the future and with what we’ve heard today we will continually be needing revenue in the state of Texas.”

Straus said the federal health care overhaul will only exacerbate the state’s budgetary woes.

“Over the next few years, Texans will face higher federal income taxes and other increases in federal levies, including for Social Security and Medicare as result of the federal health care reforms,” Straus said. “Our work on the budget will begin in an environment of uncertainty as the federal government grapples with spending and tax measures to reduce the federal debt. This makes it even more imperative that the state of Texas cover its budget shortfall without a tax increase.”

State agencies have submitted proposals to cut their current-year budgets by 5 percent at the behest of Gov. Rick Perry, Dewhurst and Straus. But those savings will only amount to about $1.7 billion, officials have said.

“The 5 percent that we requested was just the beginning,” Straus said. “It was absolutely necessary but not nearly sufficient.”