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IPFS News Link • Government Debt & Financing

Meredith Whitney Nailed It: Texas Has $27 Billion 2 Year Budget Deficit

Bad news on the state of muni finances. The Texas budget is expected to run a $27 billion two-year budget shortfall according to just-released state estimates. That's worse than the $25 billion that Paul Krugman cited last week when he gleefully noted that a GOP bastion was facing deficit problems. (Conservative pundit Kevin Williamson responded by saying that "insiders" were estimating a mere $11-$15 billion shortfall. Obviously those insiders were optimistic.) In the first year, the state is expected to collect $72.2 billion versus expenditures of $87 billion. Texas may still be in a better shape than states like Illinois, but this is a severe gap, and cuts to healthcare or education or higher taxes are coming.