State looking at possible $10.7 billion surplus

The letter was sent to all state agency board and commission chairs, state agency heads and executive directors, appellate court justices and judges, chancellors and presidents of institutions of higher education and presidents and directors of health-related institutions.

The only increase to be allowed in the baseline budget, according to the letter, is money to satisfy the 2 percent/$50 employee pay raise approved for 2009, "amounts necessary to maintain funding for the Foundation School Program, satisfy debt service requirements for existing bond authorizations, maintain caseloads for federal entitlement services, satisfy employer contribution requirements for state pension systems and maintain adult prison populations." There was no "wiggle room" left for increased revenues to help offset the costs of providing additional state services that might be brought about by population increases. Budget-writers, however, will be allowed to submit needs for other purposes through exceptional item requests.

While many other states are facing the possibility of drastic budget cuts because of the sagging economy, Texas has fared better. Increasing oil and gas prices have resulted in increased employment in Texas, and sales tax revenues continue to grow. Although the state comptroller has estimated a surplus of $10.7 billion, the official number will not be made public until just prior to the start of the legislative session next January.