By Tom Pauken

Every month the Texas Comptroller’s office releases the latest sales tax collection figures. December sales tax collections in Texas were down 11.6 percent compared to the same period last year. This follows ten straight months of declines in sales tax revenue statewide since February 2009. Sales tax revenues are not only an important indicator of the health of Texas’ energy, retail and construction industries, but also are an important source of revenue for state and local governments in Texas. They provide $44 billion, or 57 percent, of state tax revenue and about a quarter of the overall funding of state government.

With much of the federal stimulus dollars going to increased government spending, a part of that has trickled down to state and local governments. In 2009, federal funds comprised a little more than 30 percent of our state government’s budget. In this fiscal year, this is expected to rise to 41.9 percent, then fall back to 29.9 percent when $12.1 billion in federal stimulus funds are removed in 2011.

Fortunately, Texas has been fiscally prudent in recent years, unlike other large states which went on spending sprees during the boom years and now face massive budget deficits. Gov. Perry and Texas’ legislative leaders worked together in the 2009 session of the Texas Legislature to pass a balanced budget while setting aside money for a “rainy day fund” just in case the national economy worsened.

And, it turned out that we needed that rainy day fund as Texas feels the effects of the worst national recession since the Great Depression. Just two months into our 2010 fiscal year, Texas is more than $1 billion behind Comptroller Susan Combs’ original budget estimate. If this trend continues, there will not be sufficient funds set aside in the rainy day fund to make ends meet in 2011. That’s why Gov. Perry and our state legislative leaders are asking agency heads to come up with plans to cut five percent of their budgets in order to make sure the state budget is balanced in 2011.

Texas Workforce Commission 512-463-8942. http://www.texasworkforce.org, Equal Opportunity Employer, Relay Texas 1-800-735-2989 (TDD) or 1-800-735-2988 (Voice).

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