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Eltife: Revenues might be up, but lawmakers face fallout from past session

By Glenn Evans
Nov. 27, 2012 at 11 p.m.

Expensive challenges on Texas' doorstep require more sober decisions and less lip-service conservatism, the state senator from Northeast Texas told Longview Rotarians on Tuesday.

Unexpected sales tax and other revenue of at least $3 billion won't dig the state budget out of its $8 billion hole, Sen. Kevin Eltife, R-Tyler, said during a lunchtime lecture at The Summit Club.

That deficit is the real face of the budget lawmakers balanced in 2011 with accounting maneuvers. It provides the backdrop for a 2013 session in which water and transportation infrastructure, education funding and a flagging pension plan take center stage.

"Yes, our revenues are up," said Eltife, who will enter his third term when the 83rd Legislative Session convenes on Jan. 8. "But remember, we short-funded Medicaid by $5 billion. And remember, we used $3 billion from future revenues. So, there's $8 billion when we go back in. We may be up $3 (billion) or $4 billion, but we've still got to deal with $8 billion we under-funded in the last biennium."

The legislature in 2011 did balance its two-year budget, but only by funding Medicaid for 18 months instead of 24; and by pushing off some bills to the coming biennium. That's the $8 billion Eltife decried and that then-freshman Rep. David Simpson, R-Longview, scolded his colleagues about during a 'personal privilege' speech the last day of that session.

Eltife in 2011 recommended balancing the budget by identifying new revenue, including raising the gasoline tax that's been unchanged for a decade. He also drew tea party ire by advocating use of the so-called Rainy Day Fund, a multi-billion dollar account created by a surplus in fees paid by oil and gas producers.

"If it wasn't rainy last session, I don't know what in the world we have a Rainy Day Fund for," he said. "When you cut to (say you) cut - education and higher education - and you don't fund the infrastructure and go in debt, it's not conservative."

Funding for public education was cut by more than $4 billion. But that was only the latest salvo into a school finance formula already doomed under structural flaws created by even earlier legislatures.

"I call it the trifecta disaster," Eltife said, turning firstly to legislation that was supposed to cut school property taxes by one third. "Mine didn't go down, I don't know about yours," he said.

Lawmakers also placed an artificial cap on the portion of the school tax rate that funds daily operations.

"I thought the Republican Party believed in local control," he said, adding thirdly that a business franchise tax that was supposed to make up the savings homeowners were expecting turned out instead to produce a $2 billion-a-year hole.

"We're not about smart things, we're not about fixing problems," he said.

The senator did not see a more promising outlook regarding the state's highway or future water needs.

The legislature for eight years has steered the Texas Department of Transportation from paying as it undertakes projects, borrowing to build highways. TxDOT now is $12 billion in debt, requiring $300 million a year from the general fund, Eltife said.

"The state of Texas has gotten further and further in debt so the politicians can come home and say they haven't raised taxes," he said.

Add water woes to coming challenges, this one underlined by the record drought that was intensifying as lawmakers went home in 2011. A population that ballooned sufficiently since 2000 to earn four new congressional seats - Florida growth was next, getting two new seats - left the state's water infrastructure needs as critical as they are expensive.

"We've had a (50-year) water plan," Eltife said. "But you know what? We've got to pay for it, and we've refused to come up with a revenue stream to pay for water infrastructure in the state of Texas."

In addition to upping the gasoline tax, the senator indicated he would welcome discussion about other consumption taxes. Despite his business professional audience, Eltife noted previous efforts to put a sales tax on professional services and auto repairs.

But he indicated the largely GOP audience won't much like the alternatives he sees.

"We'd better work smarter in the state of Texas," Eltife said. "We had better start solving problems. And if the Republicans don't start solving problems, you're not going to like the next guy."



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