Good morning,

Unfulfilled promises and bad spending habits are hurting Texans’ futures.

Here is today's Texas Minute.

– Brandon Waltens

Monday, August 2, 2021

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Because of irresponsible spending practices by elected officials, Texas is facing major debt obligations.

But wait? Isn't Texas supposed to have a balanced budget?

Sheila Weinberg, founder and CEO of Truth in Accounting [[link removed]], finds Texas keeps two sets of budget books; one says the state has $13 billion in savings, and the other says the state has more than $100 billion in debt.

Combining the information from the two budget books, Texans owe a grand total of $97 billion. While the Legislature is required by the state constitution to pass balanced budgets, those don't take into account the entirety of future debt obligations, like pensions for state employees.

When looking at the data, Weinberg says Texas officials haven’t been putting aside enough money to keep promises they’ve made to state employees.

“What the state Legislature, and governors, have chosen to do in Texas is to balance their budgets by not paying even the minimum payments for their pension and retiree healthcare plans. Right now, they’re paying those benefits out of past contributions. But the state only has, for their employment retirement plan, 66 cents set aside for every dollar that they have promised.” –Sheila Weinberg

For example, as of 2019, Weinberg said the Teachers Retirement System has only set aside 75 cents for every dollar promised. It's a problem that is getting worse with time. In 2009 [[link removed]], Unfunded Pension Benefits (UPB) in Texas stood at more than $24 billion, while Unfunded Retiree Health Care Benefits (URHCB) were at more than $41 billion. In 2019 [[link removed]], UPB exploded to more than $67 billion, and URHCB was close to $72 billion.

This has affected Texas’ balance sheet. As of 2019 [[link removed]], the state needs more than $96 billion to pay its bills, compared with needing more than $51 billion in 2009. What does this mean for the future of Texas?

“Just look toward Illinois. Their bond rating is so low, they’re paying high interest on the money that they have to borrow,” said Weinberg. “They don’t pay their vendors on time. For example... at one point in time, the state police almost ran out of ammunition because the vendor was not getting paid for six to 18 months.”

Meanwhile on the other end of the spectrum, Utah has earned an award from *Truth In Accounting for how they budget. Their state's budget director says it's because "we only promise the services and the benefits that we can afford."

For Texans not wanting their state to be in the same situation as Illinois, Weinberg advises pulling up and reading TIA’s Financial State of Texas [[link removed]] report. Then ask your state representative and state senator, “Please explain to me how we have a balanced budget requirement, but the state debt continues to increase?” 🔒 Donate to Texas Scorecard 🔒 [[link removed]] Today in History

On August 2, 1776, members of the Second Continental Congress began attaching their signatures to the Declaration of Independence.

Quote-Unquote

"Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

– Ronald Reagan​

Your Federal & State Lawmakers

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U.S. Senator [[link removed]]

John Cornyn - R

(202) 224-2934

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Ted Cruz - R

(202) 224-5922

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Greg Abbott - R

(512) 463-2000

Lt. Governor [[link removed]]

Dan Patrick - R

(512) 463-0001

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Produced by Michael Quinn Sullivan and Brandon Waltens, the Texas Minute is a quick look at the news and info of the day we find interesting, and hope you do as well. It is delivered weekday mornings (though we'll take the occasional break for holidays and whatnot).

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