Burnt Orange Report

A Lost Plan of Taxation

By Karl-Thomas Musselman

Latinos for Texas reminds us of the fact that Rep. Eddie Rodriguez of Southeastern Austin has his bills filed even in this special session relating to a State Personal Income Tax. This has of course be a "we don't say those words" issue for years in Texas, to the point where no one would dare file legislation or say the word to any press source.

This is one step, a small one, to getting the Legislature to consider more progressive means of taxation to solve the states problems. Currently, the only thing that either chamber can decide to debate is whether to jack up Texas's Sales Tax to near 10% making it the highest in the nation most likely, or how broadly to expand taxes on franchises or business partnerships, all in an effort to lower property taxes, and somewhere in that mix have it relate to Education Reform (which isn't the issue of the two driving the debate around the interlinked HB2 and HB3).

A short summary of what Eddie is offerings...

The legislation would abolish the Maintenance & Operation portion of property taxes for all homeowners and remove the possibility of it being reinstated. It also calls for a state-wide vote on the implementation of a low-rate State Personal Income Tax.

A Personal Exemption of $3,200.00 is allowed for every filer and for each dependent declared by that filer. This is the only exemption provided.

On all remaining income the rate of the tax is:
1 % on the 1st $25,000.00
2% on the 2nd $25,000.00
3.5% on the 3rd $25,000.00
5% on the 4th $25,000.00
6.5% on the next $50,000.00
7.0% on the next $50,000.00
7.5% on additional income (all income above $200,000.00)

In a press release last Thursday, Rep. Rodriguez said, “…the total tax on a family of four, with yearly income of $100,000.00, is less than two percent.” That amount would also be deductible on your federal income taxes

"Samsonite. I was way off!"

By Nathan Nance

You know when they passed the Medicare Reform Bill, mor ethan half of the Republicans would only vote for it because it came in at under $300 billion. A month and half later, it turned out that the Administration had kept the fact that it would actually cost $540 billion under wraps so it would pass.

But they were off by a few hundred billion dollars more. The Post has a story that the Administration's budet shows the cost of the law will be $1.2 trillion over the next 10 years. That's way off from what was originally estimated.

This is fuzzy math at its worst people. These people can't even estimate how much money they are giving away to pharmaceutical companies, how in the hell can we get them to give us straight numbers on Social Security?

At a House Ways and Means Committee hearing, Rep. Rahm Emanuel (D-Ill.) taunted Treasury Secretary John W. Snow about the rhetorical discrepancies.

"If you're looking for a crisis, I would suggest you look at a crisis that was self-made in just last year, because the crisis exists in what's happened to Medicare by weighing it down," Emanuel said. "Those of us who told you it was going to cost twice as much were right."

Bush, questioned by reporters about the new numbers while meeting at the White House today with the Polish president, said that "there's no question that there is a unfunded liability inherent in Medicare" that the administration and Congress will "have to deal with over time."

I don't think Bush is cognizant of the fact that he created the budget deficit and the "unfunded liability" he's talking about. This is really scary, through-the-looking-glass-type stuff. I may actually have crossed into an alternate dimension where someone thinks that Bush is actually making sense.

Bush Budget Waste

By Byron LaMasters

Both Vince and I wrote on the study showing that the abstinence education program in Texas actually increased teen sex rates. So, one would think that a sensible budget-cutting president would realize that the program isn't working and either cut the program budget or demand results. Well, not really. What does the Bush administration do? They increase abstinence-based "sex education" by 24%. What a waste...

Rumsfeld doing his part

By Nathan Nance

Guest post by Nate Nance

There is a great article in Slate today about the effects of proposed cuts in DoD spending. Some of us laymen might assume that cutting a billion dollars from spending this year would save us a billion dollars from the budget, but you'd be wrong. As with everything else involved in Pentagon budgets, it is more complicated than that.

This is a pretty good explanation of what happens in Pentagon outlay spending and how much money we might actually shave off the deficit in the next fiscal year.

The important thing is that the administration is at least realizing people care about large structural deficits. Though they are paying lip service to cutting the fat, I'm predicting now that actual spending will increase at Defense the next fiscal year after adding in supplemental appropriations for Iraq and Afghanistan, which could total $90 billion, but for some reason are not factored in when writing the budget or determining what the year's budget deficit might be. I guess the guys at OMB didn't take Honors English in college or something.

This is a guest post from Nathan Nance Nance. He can be reached at nate_nance@yahoo.com.

Oh so witty

By Nathan Nance

Guest post by Nate Nance

When it comes to budget busting deficits, George W. Bush is king. He has spent so much money in authorizing spendings bill after spending bill and tax cuts for the wealthiest every year that we now have structural deficits for the forseeable future.

So it's actually kinda surprising to me that he thinks deficits are a problem. Anyone who has read Price of Loyalty remembers that famous quote from Dick Cheney, "Reagan proved deficits don't matter." Which explains why Reagan raised taxes 6 times between 1983 and 1989. The first Bush had to raise them twice and Bill Clinton had to do it again in 1993 before we got out of those defecits. I guess they matter enough to make Reagan raise taxes.

After his two day economic "summit" he had some interesting things to say about "reasonable tax policy" and spending and the like.

U.S. tax policy is indeed a mess, and there is a lot of complicated math involved in sorting out the budget and appropriating money. But the simple truth is Bush's "fuzzy math" is what got us into this. His tax policy seems to be we need to take in less money and then spend more and everything will be cool. If I did that with my checking account without the Chinese to bail me out, everything would not be cool. We're living on credit from a communist dictatorship so that we can cut taxes for the top 1% with smaller cuts in income taxes for those below that line. I've yet to actually see any real evidence that cutting taxes for the wealthy actually leads to real economy growth through investment.

If you want to cut taxes (I hate paying taxes, too), cut them for middle class people who will spend the money. The first thing middle class people do when they get money is spend it, which will get us to another discussion on Social Security and retirement at a later date. But middle class people are the driving force of the American economy. They took those $300 checks and bought new cars and new homes and kept this country afloat through the 2001 recession.

The only other economic model I can think of that works are New Deal-type government investments. Large public works projects where the federal government is the chief contractor and puts money directly into local economies by hiring workers and buying materials from that area. But that is more of a labor thing and our economy is more technlogy and information-centric these days. I can't imagine a computer-programmer who just lost his job to outsourcing jumping at the chance to build a big dam or something.

But now we get to the real nitty gritty. Somewhere along the line, we are going to have to raise taxes. If we keep borrowing money, we will eventually have to pay it back, and with deficits that are structural, like the Bush ones, we would be borrowing money to pay back the money we borrowed plus some to cover our expenditures for the fiscal year. After a decade or two, people will realize we don't actually have any money and quit lending it to us. Actually, it's more like having bad credit, they'll still lend it to us, but they will want more interest than the Treasury bonds they are buying yield for the risk in investing in us.

All of this could be avoided if we had people who could balance a damn checkbook working in the White House. Hopefully we get some sane people in charge of economic policy in the next decade and we might begin to turn ourselves around and we could get back in the black by the time Social Security is supposed to collapse and destroy the Western world. Probably by then, the aliens will have taken over and destroyed our planet anyway, so there's no point in worrying about it.

This is a guet post by Nathan Nance. Nate is a sports/news clerk at the waco Tribune-Herald and writer/editor of Common Sense a Texas-based Democrat Web log. He can be reached at nate_nance@yahoo.com

I want some appropriations, too!

By Vince Leibowitz

Guest Post By Vince Leibowitz

By now, we've all witnessed several news cycles full of carping and complaining about the massive H.R. 4818, the Consolidated Appropriations Act or 2005. We've heard about the funding for mariachi music, the weather museum, and the nuts and bolts of the bill.

But, what else, exactly, is in the spending bill? I decided to take a look.

First of all, you'd think it would be easy to find the darn thing. Well, it would have been if I'd remembered the bill's number. So, I checked the "Currently on the Floor" section of the U.S. House site for yesterday and found it.

Then, I set out to look for the "pork," just to see what else there was that wasn't on the national media's radar. I also wanted to see just exactly what else is in a federal appropriations act. After all, given that the bill weighs something like 33 pounds in printed form, it's not like AP can digest all of that in to a graph or anything.

Well, there obviously isn't a section entitled "Pork," so I scrolled down the very, very long page to look for sections that sound like they might include a little pork.

Finally, way on down the list, I selected "Office of Museum and Library Services, Grant Administration." Sure to be some "pork" there, I thought.

Sure enough, $282,827,000 worth of projects that, while do doubt of importance to their individual communities, could surely be considered as "pork," by conservative budget hawks.

Some of my personal favorites included:

+$100,000 shall be awarded to Arab Community Center for Economic and Social Services (ACCESS), Dearborn, Michigan, for exhibits and museum programs +$200,000 shall be awarded to Baylor University, Waco, Texas, for archival activities, exhibits, and education programs for the Mayborn Museum Complex (wait a minute, that's a PRIVATE RELIGIOUS COLLEGE!!) +$500,000 shall be awarded to Bishop Museum in Hawaii for digitization of old Hawaiian language newspapers and other activities to preserve the culture of Native Hawaiians +$150,000 shall be awarded to Italian-American Cultural Center of Iowa in Des Moines, Iowa, for exhibits, multi-media collections, display +$950,000 shall be awarded to Please Touch Museum, Philadelphia, Pennsylvania, to develop educational programs focusing on hands-on learning experiences

But, as expected, all of this is for museums and libraries. So, where's the other juicy stuff? I went back to the top.

"Sec. 4--Statement of Appropriations" included a number of agricultural appropriations to universities and for extension services, but nothing too exciting.

So, I continued along and found $8,000,000 for Burma, $4,000,000 for Tibet, and $5,800,000 for multi-national species conservation.

Further on, I found $10,000,000 for a psychiatric treatment facility in Bethel, Alaska, and an interesting little provision tucked away elsewhere:

Each educational institution that receives Federal funds for a fiscal year shall hold an educational program on the United States Constitution on September 17 of such year for the students served by the educational institution.

I also found an interesting provision changing some banal language concerning our National Tree, the Oak.

Needless to say, I examined the bill for the better part of an hour and couldn't find even some of the most celebrated sections the media's been discussing. I specifically wanted to find the mariachi appropriation just to see what else was with it. The thing is just too darned big there are literally thousands of places to slip in something. Unfortunatly, because of the way the server you access the bill on, some things didn't seem to show up right, which may be why I couldn't find some of the better stuff.

Either way, I was just thinking how lovely it would be to have one's name--or the name of one's favorite charity, favorite blog, or favorite museum--tucked away in the ol' appropriations bill. Maybe if I caught Ralph Hall on a good day I could convince him of the importance of funding a "Texas Political Webloggers Funding Initiative". Let the federal funding flow! Alas, we can dream, ha ha ha.

This made me remember an interview I did with Bill Hollowell, the former State Representative from Van Zandt County back when he was running again in 2000. He got to talking about pork barreling in Texas, and how much he hated it. (It should be noted he also hated teacher pay raises, the Texas Jazz Festival and almost everything else that cost money.) Anyway, I remember he was talking about the Salt Palace in Grand Saline and said: something like: "I never liked all that pork barreling. But, I remember one time [he served through much of the 70s and 80s] they really got that ol' pork barrell a rollin' down there and I just decided to put in an appropriation for the Salt Palace. I figured it was as good as anything else that was getting money." Salt pork, anyone?

Vince Leibowitz is County Chairman of the Democratic Party of Van Zandt County. He is a regular contributor to the Political State Report.

Taxes, Complain, Complain, Complain...

By Karl-Thomas Musselman

Everyone complains about taxes, right? Certainly if you are a Republican or a Business. Then you really get up in arms. But I sense a new theory. The "It's All Just for Show" theory in which you make a big stink about taxes to get people who pay them to vote for Business Interests (which for the sake of fun I will call Republicans in Congress), but in reality you let Businesses just pay, or not pay, whatever they want, regardless of what rate they are.

Proof Positive?

More than 60% of U.S. corporations didn't pay any federal taxes for 1996 through 2000, years when the economy boomed and corporate profits soared, Tuesday's Wall Street Journal reported, citing the investigative arm of Congress.

The disclosures from the General Accounting Office are certain to fuel the debate over corporate tax payments in the presidential campaign. Corporate tax receipts have shrunk markedly as a share of overall federal revenue in recent years, and were particularly depressed when the economy soured. By 2003, they had fallen to just 7.4% of overall federal receipts, the lowest rate since 1983, and the second-lowest rate since 1934, federal budget officials say.

The GAO analysis of Internal Revenue Service data comes as tax avoidance by both U.S. and foreign companies also is drawing increased scrutiny from the IRS and Congress. But more so than similar previous reports, the analysis suggests that dodging taxes, both legally and otherwise, has become deeply rooted in U.S. corporate culture. The analysis found that even more foreign-owned companies doing business in the U.S. -- about 70% of them -- reported that they didn't owe any U.S. federal taxes during the late 1990s.

I wish us normal people could have the same luxury. And by normal people I'm including Republicans that aren't CEOs. So that includes Owen and Mark in the regular people category, unless one of them plans to come to the defense of the Billions not being paid by the likes of Kenny Boy Lay and Company? I mean, if corperations pay their taxes, doesn't that mean the government needs less of ours? Or at least doesn't need to raise them or go further into deficit to pay for the $150 Billion extra that the Medicare Plan accidently will cost.

Just some food for thought as we fill out our tax forms before the 15th.

Perry To Unveil New Tax Plan

By Andrew Dobbs

The product of Pretty Boy Perry's vacations in the caribbean and Italy on your dime will finally be unveiled this week it seems. Perry will be joined by far right anti-tax activist and wingnut radio show host Dan Patrick and Harris County Tax Assessor Paul Bettancourt to unveil an unweildly plan based at least loosely on California's infamous Prop 13. From the Startle-Gram:

The governor's office declined to release any details of the plan, which is to be unveiled in Houston and San Antonio today.

But one top Republican official who has been briefed on the announcement and another familiar with the plan's contents say it calls for restrictions on yearly property appraisals and hard caps on the amount of revenue flowing to taxing entities. Both spoke on condition of anonymity.

Among other things, the officials said the draft plan calls for:

Mandatory disclosure of home sale prices to appraisal review boards, which would then have to take the information into account when calculating the value of a house.

Capping the revenue -- it doesn't say at what amount -- that local taxing entitities receive; the plan would allow for new home and apartment construction to be added to the tax base.

Allowing school districts to make adjustments in the cap to accommodate student enrollment growth and inflation.

Capping yearly home appraisal increases at 3 percent. (For tax purposes, a homestead's value currently may rise by no more than 10 percent a year).

Provisions requring the Texas Legislature to fund any mandates it places on local governments.

A requirement that any move to exceed the property tax cap would require a vote of the people on a pre-scheduled election date.

Perry is proposing to cut property taxes as part of a school finance reform package that could be presented in a special legislative session next month.

The Chronical has more on Governor Goodhair's inspiration for the package:

Bill Allaway, president of the Texas Taxpayers and Research Association, a business group, said he has been told the governor has been looking at two options.

One is the plan enacted in Colorado that prohibits local governments from increasing revenue from property taxes in excess of a certain trigger, such as inflation or population growth, without a vote of taxpayers. It is a way of controlling growth in local government expenditures, he said.

The other, he added, is a plan that Florida has used for several years. It limits increases in appraisals of homesteads to 3 percent or the rate of inflation, whichever is less.

"It has taken a huge amount of property off the tax rolls (in Florida)," he said.

Asked which plan, if any, he thought Perry would propose, Allaway replied, "I think he may be coming down on all of the above."

He said his group doesn't like limiting appraisals only for residential property because it transfers the tax burden to all other taxpayers, including businesses and apartment owners. He said he has mixed emotions about the revenue limits used in the Colorado plan.

Allaway said such limits are similar to Proposition 13, an initiative California voters passed in 1978 that limited property tax growth. Some Californians blame the measure for causing a decline in public education.

Let's be honest, Prop 13 was a disaster for California. The current budget nightmares there can in large part be traced back to the proposition that has tied their hands in terms of revenue. Still, propery taxes are too high for many Texans and there must be some kind of reform. Some of my sources suggest that he might also introduce property tax roll splitting where homestead taxes would go to local governments and business taxes would go to the state. This is a sop to the GOP's suburban constituents at the expense of Democratic urban voters. Urban communities tend to be poorer and thus have a greater need for the services that these taxes pay for but they tend to derive much of their revenue from taxes on business, not homes. So not only will they have greater need, they will have less money to meet these needs and the great spiral into despair begins. Suburban communities, with their enormous property values, will be high on the hog under this plan- which is what the GOP has been looking to do all along.

I won't pretend to have that great an understanding of all these issues- I'm picking a lot of it up as I go along. I do know that our communities are strapped for cash now and telling them that their hands are tied on raising any new revenue will only exacerbate problems. Remember that Rick Perry was rubbing coconut oil on Grover Norquist's hairy back down in the Caribbean earlier this month, the same Norquist that said that he wanted to shrink government small enough to "drown it in the bathtub." Perry's plan will starve the poorest communities of any resources and will ensure tight belts for local governments for the forseeable future. Raising the kind of revenue needed to amply address our health care crisis, our infrastructure crisis, our alarmingly high dropout rate or our increasing costs of public safety will be next to impossible and Texas will be relegated to Mississippi-esque status. We deserve better than that and this plan must be addressed. We'll see how the plan unfolds over the next several days I'm sure.

Phil Gramm's Sales Pitch: "Your loss is our gain!"

By Jim Dallas

I meant to blog on this a while back, but it belongs in the "pure evil" category.

The short version: The Republicans want to save the retirement program they screwed up by putting a price on the head of each teacher in the state of Texas.

The long version: Well, just read about it here...

A plan by former U.S. Sen. Phil Gramm to bail out Texas' teacher pension fund partly through retirees' deaths is criticized by some state pension administrators and officials of educators' unions who want to know how much of the money would go into the retirement program.

The plan, backed by Republican Gov. Rick Perry, is similar to so-called "dead peasant" policies that have created legal and public-relations headaches in the private sector.

Gramm, now vice chairman of UBS Investment Bank in New York, has proposed to Texas officials that the state buy life insurance policies and annuities on thousands of retired teachers and cash in on them to close a $700 million funding gap. The plan was set in motion after a recent meeting between Gramm and Perry at the governor's mansion. Retirees would be told they were being insured, with the money going to the agency.

The Teacher Retirement System of Texas, which provides pensions and health insurance for retirees, is in the red and needs to generate an additional $5.2 billion, through investment gains or increases in employee contributions, to cover all future retirees. Officials said the fund's health care portion has enough money to pay all claims during the current budget period but could face fiscal problems in the future.

At Perry's direction, his budget director, Mike Morrissey, and another aide have met in a series of private sessions with teacher fund administrators, state Insurance Commissioner Jose Montemayor, Securities Commissioner Denise Voigt Crawford and representatives of a retired teachers group.

A proposal briefly offered in the Legislature this year to authorize the state to buy life insurance policies on its retired employees without their knowledge, with the government collecting the death benefits, generated criticism from state employees and Rep. Ken Marchant, R-Coppell, pulled down his bill

Memo to 2006 Democratic Candidates: This is WRONG. This is an ISSUE. USE IT.

Cracking the Books

By Karl-Thomas Musselman

I'm so glad that we have money to fund the irony of the following news articles.

First we have a story today with Bush commenting on the successes in Iraq reconstruction.

As part of efforts to bring security to Iraq, President Bush said on Saturday that his administration was rebuilding the country's schools and providing calculators, pencils and textbooks free of Baathist propaganda to students.

"As part of our coalition's efforts to build a stable and secure Iraq, we are working to rebuild Iraq's schools, to get the teachers back to work and to make sure Iraqi children have the supplies they need," Bush said.

"He said over 1,500 schools have been refurbished so far -- 500 more than expected -- and that the United States has assembled more than 1 million school supply kits, including pencils and calculators and note pads for Iraqi schoolchildren."

This is remarkable considering the cuts nationwide among states in the educational department- including textbooks. From the UPI Textbook Series:

"Textbook purchases will be one of the first victims in anticipated education cutbacks due to widespread state budget woes, insiders say, leaving the $9 billion textbook industry prospects weak in the coming years.

...

California and Texas, two of the country's largest textbook markets, have cut state spending 25 percent and 10 percent, respectively. And when states face slashed education budgets, textbook purchases -- with their accompanying high costs -- often seem an obvious and easy place to cut as states can recycle used textbooks.

According to Mike Griffith, a policy analyst at the non-profit Education Commission of the States, textbook purchases are "a cost you can put off and make up for in later years."

Indeed, textbook orders have been delayed in Kansas, Kentucky, Missouri, Nebraska and Texas, according to a monthly nationwide survey by National Education Association researcher Daniel Kaufman.

Being the liberal I am, I certainly do support the efforts to rebuild Iraqi schools and their educational system. Every child should have the right to an education free of indoctrination.

But just because Bush has to cover himself overseas, it doesn't mean he can do it at the expense of the educational system here at home.

Strayhorn Tries Again

By Byron LaMasters

I'm actually starting to like Comptroller Carol Keeyton Strayhorn this year. She's really been about the only Republican in a statewide office to recognize the need to increase revenue to balance the budget, and to advocate very needed spending especially on health care. She went at it again last week:

Comptroller Carole Keeton Strayhorn urged lawmakers Friday to spend $702.6 million she says is available to ease health-care cuts they approved in the regular session that ended last month.

"We can be leaner, not meaner," Mrs. Strayhorn said at a health-care symposium sponsored by the Vinson & Elkins law firm.

"And we can cut out some of that anxiety," she said, referring to low-income and sick recipients of state health care who soon will be notified they'll lose some or all of their current benefits on Sept. 1.

Mrs. Strayhorn called for lawmakers in their special session to pass legislation to boost Medicaid, the Children's Health Insurance Program and other health services, using newly available federal funds and state money freed up by a transportation bill and Gov. Rick Perry's recent vetoes.

Last month, the comptroller thought for a time that the two-year budget was $185.9 million short, until she and Mr. Perry agreed to cut money she had sought but said was no longer needed.

In calling for swift action, the comptroller resumed a running battle over budget issues.

As she has before, Mrs. Strayhorn questioned budget provisions that allow Mr. Perry and a 10-member legislative panel to decide how to spend savings from the governor's vetoes or other new funds when the Legislature is not in session.

She said Mr. Perry and the Legislative Budget Board – which Lt. Gov. David Dewhurst heads, with House Speaker Tom Craddick as its vice chairman – could legally spend $372.3 million left from the state-relief part of President Bush's latest tax-cut bill. The budget provides for receipt of new federal money, she said.

But Mrs. Strayhorn described as "new dollars" $98.6 million saved by Mr. Perry's vetoes and $231.7 million from driver's license and car inspection fees.

"Appropriating new dollars is the business of the Legislature, and the Legislature is here in town," she said.

However, Mr. Perry and top GOP lawmakers appear in no hurry to heed Mrs. Strayhorn's advice.

"There are no plans to open the call to that issue," Kathy Walt, Mr. Perry's spokeswoman.

"That is why there is budget execution authority, a practice that has been in place for many, many years," Ms. Walt said, referring to the power of the governor and the Legislative Budget Board to move money around within the budget when lawmakers aren't in session.

Sen. Teel Bivins, R-Amarillo, the Senate's chief budget writer, said a budget rider allows Mr. Perry and the board to redistribute money saved by vetoes; another suggests cuts in health and education spending that might be reversed, Mr. Bivins said.

"The full Legislature has already developed a methodology to handle any additional revenue," the senator said.

A Democratic lawmaker applauded Mrs. Strayhorn.

"It's about time we have a leader who understands the true needs of Texans," said Rep. Garnet Coleman, D-Houston. "The Legislature has the power of the purse; it's our responsibility."

Well, I'm glad that she's trying, but its pretty hopeless.

Budget Signed

By Byron LaMasters

The Texas state budget has been signed and certified.

More on this later, watching Dean's announcement speech...

Is Carole Keeton Strayhorn an Idiot?

By Byron LaMasters

If Carole Keeton Rylander-Strayhorn wants to be governor someday, then why does she do things like this that make her look like a fool?

Comptroller Carole Keeton Strayhorn certified the state's $118 billion budget Friday by agreeing to cuts in her own agency that will balance the two-year spending plan.

"We accomplished this additional cut without adversely affecting any vital services. And this cut is coming out of my own agency's appropriation," Strayhorn said one day after shocking state leaders by not approving the budget

[...]

The standoff was resolved when Strayhorn agreed to $212 million in suggested cuts to her agency. The cuts were made through two vetoes by Perry in two bills affecting cash management.

Is it just me, or does this just make Stayhorn look completely stupid? She creates a big fuss by refusing to certify the budget. She makes Perry and Craddick look bad, then the next day she caves by slashing her own budget?? What's the lady thinking? I don't get it. Oh well.

Strayhorn reverses course, Certifies Budget

By Byron LaMasters

Well, woo-wee... the Republican infighting is over and everyone's happy... or so it seems. This just in, from the Dallas Morning News:

Comptroller Carol Keeton Strayhorn certified the state's $117.4 billion budget plan Friday, avoiding a potential constitutional battle with the governor and the attorney general.

This is what Strayhorn said about the budget yesterday. We'll have to see how she manages to save face on this one...

Abbott to sue over state budget

By Byron LaMasters

The Texas Attorney General Greg Abbott is ready to sue to force Comptroller Carole Keeton Strayhorn to certify the budget. From the Houston Chronicle, here:

Attorney General Greg Abbott said today he has a lawsuit ready to be filed seeking to force Comptroller Carole Keeton Strayhorn to certify the two-year state budget, but he's hopeful ongoing negotiations will help avert taking the spending plan to court.

More from the Austin American Statesman.

Want to Balance the Texas Budget?

By Byron LaMasters

Play the Texas Budget game.

Comptroller Strayhorn Rejects Budget

By Byron LaMasters

Whoa, this is interesting:

Comptroller Carole Keeton Strayhorn took the historic step Thursday of rejecting lawmakers’ version of the state budget, saying it would have outspent available revenues by $185.9 million.

“When my staff completed tallying the effects of the 4,000 pieces of legislation” passed in the just-completed legislative session, “the budget did not balance,” Ms. Strayhorn said.

“I would have loved for the Legislature to have adopted a budget that I could certify.”

Ms. Strayhorn’s action makes it likely that Gov. Rick Perry will add the budget to the special session he has called on congressional redistricting for June 30.

[...]

Anticipating the comptroller might find their budget out of whack, lawmakers had added a provision that if she found there was not enough money to carry out their two-year, $117.4 billion spending plan, Mr. Perry and the 10 lawmakers on the Legislative Budget Board could cut spending by the amount needed to make the budget balance.

Ms. Strayhorn dismissed that contingency plan as unconstitutional.

An amendment to the Texas Constitution that voters approved in 1942 makes it clear, she said, that if she rules that an appropriation bill would outspend available revenue, she must return the bill to the house of the Legislature where it originated.

“There is no appropriations bill,” she said. “This bill has not been certified.”

Ms. Strayhorn said it was the first time a comptroller has found a state budget bill to be unbalanced since the 1942 constitutional amendment required her office to check state coffers to make sure they contain enough cash to cover spending measures.

Although predecessors rejected spending bills on a couple of occasions, she said, the measures involved were not the state’s two-year budget bills.

Ms. Strayhorn said the budget sent to her would have been “more than a billion dollars short” if last month’s federal tax-cut bill had not included relief for cash-strapped states.

Even with that money, it fell short, she said.

Ms. Strayhorn said she counted money from measures she found repugnant – such as draining the state’s emergency money in the “rainy day fund” and several one-time maneuvers, even though she believes they amount to “pushing the problem to future taxpayers.”

The Houston Chronicle also reports:

Comptroller Carole Keeton Strayhorn rejected the state's $117.4 billion budget on Thursday, sending the two-year spending plan back to lawmakers to rewrite before the end of the current fiscal year on Aug. 31.

"This is the first time a Legislature has sent the comptroller a budget that is not balanced," Strayhorn said. "I cannot certify this budget because it is $185.9 million short."

The state constitution requires that the Legislature pass a balanced budget and it cannot be sent to the governor's desk to sign into law without the comptroller's OK.

Perry has called a special session to begin June 30 to address Congressional redistricting but had not yet added the budget to his order by early afternoon.

"While the announcement is disappointing, I believe legislators can quickly address her concerns," Perry said in a prepared statement. "I will continue working with the leadership of both chambers and with Comptroller Strayhorn, and I am confident we can address this issue quickly."

Perry spokeswoman Kathy Walt said Strayhorn's action means the governor will not be able to veto any line of the budget, since he does not have a budget to sign.

Well, this certainly isn't good news for Republicans. Stayhorn is becoming an increasing pain in the butt for them. Last month it was the cigarette tax proposal, and this month, she rejects the budget. Heck, I'd even consider voting for her. Ok, maybe not, but if Marty Akins runs again, I'd consider it. Regardless, the point here is that this is the first time that the legislature has utterly, completely failed to balance the budget. It's also the first time that Republicans have had complete control of the process. Interesting. Coupled with the record deficits in the federal budget, can anyone, anyone tell me with a straight face that the Republican Party is the party of fiscal responsibility???

I didn't think so.