This week, Comptroller Susan Combs released her biennial revenue estimate.  The estimate attempts to provide the legislature instruction regarding how much state revenue will be available for the next two years. Comptroller Combs estimates that the state will have $72.2 billion to spend in general revenue, approximately $15 billion less than budgeted in the current biennium.  Her prediction includes a $4.3-billion deficit in the current biennium. 
Some groups argue that $99 billion is needed to fund current services for the next two-year budget cycle. If that number is accurate, the shortfall for the upcoming budget would be as high as $27 billion.  Other groups argue that the shortfall is somewhat less.

In any case, what does a state budget deficit mean for cities?  The State of Texas provides virtually no financial assistance to cities.   To the contrary, cities actually generate revenue (in the form of state fees in municipal court, state agency fees, etc.) that is used by the legislature to fund state programs.  During these tough economic times, it is highly likely that the state will look to cities to fund an even larger share of those programs. Stay tuned.

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