Gov. Perry Signs State Budget That Reduces GR by $1.6 Billion

Press Release

Gov. Perry Signs State Budget That Reduces GR by $1.6 Billion

Governor Eliminates $288.9 Million in Spending Through Line-Item Veto

Gov. Rick Perry today signed Senate Bill 1 into law, providing a balanced budget that spends $1.6 billion less in general revenue than the previous biennium. The budget funds key priorities from higher education and job creation to border security. The governor also used his line-item veto power to reduce the two-year budget by $97.2 million in general revenue and $288.9 million from all funding sources.

"The Legislature has done a commendable job in reducing the general revenue appropriation to live within the Comptroller's revenue estimate issued in January, cutting general revenue spending by $1.6 billion," Gov. Perry said. "It is particularly noteworthy lawmakers balanced the budget without using the state's Rainy Day Fund and provided a tax cut to 40,000 small businesses."

The budget signed by Gov. Perry decreases general revenue spending by $1.6 billion, or 1.9 percent, compared to the current biennium, while still maintaining funding for key areas such as economic development, education and public safety. This decrease in spending has only occurred once since World War II.

This 2010-11 budget continues several key investments, including water infrastructure and border security, which are essential to the growth and security of the state; and funding for the Texas Enterprise Fund and the Emerging Technology Fund, which allow the state to maintain a competitive business climate, invest in new technologies and attract world class researchers to the state's institutions of higher education. The budget also makes a significant increase in funding for financial aid for higher education as well as the Skills Development Fund, which are critical to helping more Texans realize the dream of a college education, and ensuring the state has an educated and trained workforce to compete in the global marketplace.

Additionally, the Legislature left the state's Rainy Day Fund untouched; the fund is projected to grow to $9 billion by the end of the 2010-11 biennium. Lawmakers also took steps to reduce diversions from the State Highway Fund, providing an additional $378 million for road construction and maintenance, and expanded highway and debt service payment line items in the Texas Department of Transportation budget for greater transparency.

Gov. Perry reiterated that agencies and organizations receiving funding in the budget from the American Recovery and Reinvestment Act should not expect to see these funds renewed by the state in the next biennium, and should use the funds only for one time expenditures. The governor also expressed concern regarding the lack of transparency of certain appropriations.

The governor remains committed to truth-in-budgeting as an important part of the state's commitment to transparency. Although the Legislature took steps to reduce diversions in the budget, the governor emphasized the need to continue to reduce and eliminate additional diversions in future budgets to ensure that Texas taxpayer dollars are spent wisely.

The budget for FY 2010-11 takes effect September 1, 2009.

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