The Decision

In early 2009, President Barack Obama, in efforts to stimulate the economy and prevent major budget cuts and/or tax increases, spent almost $1 trillion and sent a large amount of the federal money to state governments.  However, Texas had an upper hand to other states.  The Texas Legislature, with a two-thirds vote, could tap into a multibillion-dollar rainy day fund.  

Due to conflicting ideas, the dispute between U.S. Rep. Lloyd Doggett, D-Austin, and Gov. Rick Perry began, regarding the appropriate way to spend the money.  With the stimulus money available, the Texas Legislature, prepared to reduce education spending to balance the budget, was able to maintain and increase the education budget.  In addition, Perry feels the government should not attach strings to money it send to states that require the state to increase taxes or change its funding priorities.  Doggett had a different idea, he planned on increasing overall education spending by $3.25 billion, although not required by law, which would need the Legislature to tap the rainy day fund.  

In response to Doggett, John O’Brian, executive director of the Legislative Budget Board, informed legislators of two things: first, without a tax structure able to maintain that level of spending, it was not fiscally sound budget policy to use one-time federal funds to increase the base budget, and two, Doggett’s plan would create a structural deficit that would soon require tax increases and/or major budget cuts. 

The Legislature ended up passing a budget that did not contain cuts, raise taxes, or tap the rainy day fund.  Soon after, in summer of 2010, Congress passed another funding bill dedicated for education.  In an attempt to ensure that additional money would increase education spending instead of make up for shortfall; Doggett attached an amendment to the bill.  The amendment denied Texas its $821 million portion of the funds unless the governor assured the Department of Education Texas would continue with a level of spending equivalent to the current spending for three years. 

Furthermore, Texas spent the 2009 stimulus money in a responsible way, just like the other states.   Texas put the money to make up for the reduction of tax revenue caused by the recession.  If Texas had gone with Doggett’s plan, there would be a $3.25 billion less in the fund and the state deficit would be an additional $3.25 billion.   Although Dogget’s plan is wrong, he continues to repeal his amendment and release the money to Texas.

In the end, the outcome of the matter will be in one of three ways: Congress may repeal the restriction, the Texas Legislators may pass a new budget that gives Doggett what he wants, or Texas will not receive the $831 million that it should get.  Whether the state tax dollars should be spent on education, health care, prisons or any funds is a state decision and Doggett is wrong for trying to force Texas to spend down its reserves, Texas should have the final decision.