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October 24, 2001     (512) 463-0300

Senate Finance Committee Hears
Sobering Revenue Estimates

The Senate Finance Committee found itself looking at a state budget deficit that could be anywhere from three to five billion dollars by the time the Legislature meets again. That's what James LeBas from the Comptroller's Office told the members at their first meeting of the 77th Interim today, Wednesday, October 24, 2001.

LeBas reported that even before the events of September 11, the state's economy had been slowing and that the terrorist attacks have discouraged people from buying the items that pump sales tax revenues into the state's coffers.

Senator Gonzalo Barrientos of Austin questioned the report saying "I want to be shown that we're not funding these items due to the economy and nothing else." These very conservative revenue estimates mean that many items approved by the 77th Legislature which were contingent on money being available could not be funded.

Keeping track of revenues is part of Charge #1, surveying and assessing Texas' current tax system. But the committee has much more work during this interim. Each of the six charges will be examined by a subcommittee. And while Charge #1 may show revenues falling, the other six may show expenditures rising.

Charge #2 orders the committee to examine rising medical costs and their impact on the state budget. Stephanie Coates of the Legislative Budget Board told the senators that for fiscal year 2002-2003 those expenditures are well over two billion dollars. Health and Human Services Commissioner Don Gilbert said that the state can help control Medicaid costs by closely watching reimbursement rates. But regarding the difficulty the state has in keeping doctors in low income areas he said, "We've got to have more money to pay physicians, especially high volume physicians in those areas along the border."

Charge #3 tells the committee to examine health and human service agency case loads, and examine what the cost per client is. Commissioner Gilbert said that they are always looking for easier ways to get services to people who are entitled to them.

Charge #4 relates to Senate Bill 813 and the Spaceport Trust Fund. The goal is to keep up with the status of the project over the next two years. Daniel Estrada of the Legislative Budget Board told the committee that the fund is designed to help the Texas Aerospace Commission establish a spacecraft launching facility here in Texas. Currently, two South Texas sites are working on the project and a third is being proposed for Pecos County, near Fort Stockton.

Charge #5 would have the committee review the Crime Victims Compensation Fund and how its monies are expended. Stephanie Coates from the Legislative Budget Board told the committee that $264 million has been appropriated for this budget to be spread among several agencies. Texas courts collect court costs from convicted offenders which also go into the fund. Total revenues available for 2002-2003 are $435 million.

Charge #6 calls for the committee to evaluate the infrastructure, capacity and funding of trauma care in Texas. Regina Martin of the Legislative Budget Board reported that $13.4 million was appropriated by the Legislature for the current budget. Senator Eddie Lucio of Brownsville asked about a lack of neurosurgeons in the Rio Grande Valley hospitals, causing some patients to have to go elsewhere for treatment. Martin said any shortage could be due to either a shortage of funds or concerns about liability. Chairman Ellis suggested that the committee may need to meet outside of Austin to address these issues.

The committee recessed subject to the call of the chair. The time and place of the next meeting will be announced at a later date.

You can access the archived video webcast from the Finance Committee's web page.

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