On April 7th, the House took up the budget for the 2018-2019 biennium. With over four hundred amendments filed for consideration, the hearing on the floor of the House went past midnight into the early hours of the next morning. Despite having over 14 hours to debate the budget, we were barely able to scratch the surface of the issues our state faces in spending, investment, and planning. I'd like to take some time to lay out what I saw in the process, let you know why I voted as I did on the budget, and how I'd like to see our process work in the future.
I've spent the better part of my career working with budgets as a uniformed acquisitions officer within the department of defense, not only managing multi-billion dollar projects, but helping craft the overall defense depart budget. In that time, I've seen many methods of budgeting, each with its own strengths and weaknesses. Across all of those methods, one principle proves itself out time and time again, if those asking for money are not forced to give a detailed explanation of what they are going to use it for, line by line, there will always be prioritization issues.
The strategy-based system we currently use in Texas allows large sums of money to be appropriated to an agency under the broadest of descriptions. Those agencies don't have to defend their request at a deep level to those making the decisions, they simply request their budget for the next two years based on what they spent in the previous two years. This allows for unnecessary spending, pork projects, and a general lack of the oversight necessary to keep a multi-billion dollar budget within responsible parameters.
The budget hawk in me was very disappointed that I wasn't able to deep dive into the reports from every agency, university, and political subdivision to examine just how they spent all of the money taken from taxpayers. I sat down with members of the Legislative Budget Board, employees of the government agency which reviews the full budgets of agencies and can see all of the details, and was surprised at how little detail they were able to provide me. If The Pentagon can operate a $598.5 Billion per year budget with a relatively small team of accountants and still provide a sufficient level of detail, then Texas, with a large pool of people working on our budget numbers, can certainly do better than our current standard for our $106 Billion per year budget.
In the defense department we have a very well-defined budgeting process. We start by defining our requirements, the objectives we must achieve. Once we identify all of the requirements we validate them, checking for redundancies and places where we can find more efficiency now that all of our objectives are known. Finally, we prioritize, deciding which of the priorities are of the utmost importance and funding those first.
Prioritization always involves risk. We have limited resources to accomplish an unlimited number of possible objectives. Some of them simply can't be funded fully, if they are funded at all. Budgeting is about making those hard choices, deciding where you are willing to assume risk. When those of us in the legislature, tasked with making the final decision on the budget, can’t see those details, can't go over the priorities line by line, then how can we know that our priorities are in the right place? How can we know that we are taking the right risks?
As for the budget overall, I have my reservations, but in the end I voted yes for one simple reason; I don't like when people play games with the budget. Both the House and Senate are dealing with limited revenue and massive demands, and both budgets spent more than they took in. The difference was that the House chose to do what any responsible family would do, and took the money to pay the bills from the state's savings account, the Economic Stabilization Fund, also known as the "Rainy Day Fund".
While this isn’t a very popular notion, it is at least transparent, unlike the version of the budget passed by the Senate, which delayed payments on mandatory investments in infrastructure until the next biennium, a budget trick I saw way too many times in Washington to ever be comfortable with it here. What's more, placing our infrastructure at risk to hide the need for a savings withdrawal may actually end up hurting our credit rating more than the withdrawal. Neither option was ideal, but I chose to vote for the one closest to my principles of budgeting.
If we want to move Texas forward, it will take getting past these kinds of games, and getting toward a real vision, with long term planning and honest, responsible, solid numbers.