Cooking The Books?

Over the last year everyone involved in the legislative budget process has jumped on the end-the-gimmicks bandwagon — rhetorically, at least. But when the Texas House takes up the state budget on Thursday, they may end up endorsing a whole new way of cooking the books. Or, at a minimum, distorting the budget picture.

It appears budget writers are taking several billion dollars worth of revenue off the books — making the budget artificially lower than it is. Most notable are receipts associated with higher education and their affiliated hospitals. Those income dollars have for years been counted in the budget.

According to a footnote appearing on page 6 in the Legislative Budget Board’s summary of the “Methods of Financing” in both the Senate and House versions of the budget: “All Funds and Other Funds amounts exclude an estimated $6.1 billion in patient income from the appropriations to health-related institutions of higher education.”

Yes, $6.1 billion is a BIG number. Think of it like this: we’re talking about 3 percent of the biennial budget revenues.

Is this some sort of legitimate re-stating of revenues going forward?

Let’s be clear: this isn’t like the gimmicks of old, where dollars dedicated for one purpose were clearly being diverted to something else. No, it appears to be what it says, ‘excluding’ billions of dollars from the books. Poof. Gone. Not there. [Insert your favorite Enron joke here.]

Some might be tempted to call it a cooking — or, at least, a serious sautéing — of the books. Or maybe it’s just a new way to do budget math. Maybe that line-item should never have been included in the first place.

If nothing else, this exclusion raises transparency questions in a session where everyone from the conservative governor to the moderate speaker to rank-and-file liberal legislators all pledged an end to smokescreens and gimmicks.

Rather than a footnote in a budget document, this kind of revenue recalculation action — involving so many dollars — deserves careful review by lawmakers.

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Michael is president and CEO of Empower Texans. A graduate of Texas A&M, former newspaper reporter, one-time Capitol Hill staffer, think tank vice president, and an Eagle Scout, Sullivan is married with three children. He divides his time between the Metroplex, the rest of Texas, and Austin.

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