Is the State's Budget Lower Because of Falling Oil Prices?

Feb 28, 2017

The Texas Legislature is in full swing. And, while lawmakers typically wait until the waning weeks of the session to get anything done, we're answering some of your questions about what goes on under the granite dome for our TXDecides project.

Today's question: 

I heard this session's lower budget estimate is because of falling oil prices. Is that true? How is this number determined?

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Transcript

Jimmy Maas: This is KUT. I'm Jimmy Maas. Throughout the legislative session, we are taking listener questions on how things are going at the State Capitol. Here's a listener question. I heard the session's lower budget estimate is because of falling oil prices. Is that true? And how is this number determined?

Ben Philpott: So, it's partially true. The way the number is determined is you just simply look at your receipts coming in from the oil industry and, you know, that let you know if the state's getting as much revenue as they got in the previous time. But it's partially true. Yes, oil prices are down. Yes, that is affecting how much money the state has to spend. But a larger chunk – about $5 billion that the state would have had to spend – is cut this time because the money is being diverted away from general revenue and sent over to pay for transportation issues. This is a constitutional amendment that we passed a couple of years ago, and it says we're going to skim off the top of some of these revenues that are coming into the state and we're going to set aside a certain percentage for transportation, for the Department of Transportation to do roads and bridges and other infrastructure projects. This time around that's about $5 billion. So, we don't have as much money as we did in the last budget cycle, except that we actually did have another $5 billion that would have meant, you know, not worrying about cuts in some different agencies this time around, but that money was diverted because of the constitutional amendment, and it's going to be spent on roads only.

JM: Had it not been there for roads, the Department of Transportation would be asking for some more money as well?

BP:Yes, because that agency has over multiple years been shown to have been underfunded and needed more money to catch up in, of course, one of the fastest growing states in the country.

JM: All right, thanks Ben. That's KUT Senior Editor Ben Philpott. 

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