UT, state agencies brace for further cuts

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State leaders ordered in a letter to state agencies Tuesday to make another 2.5 percent reduction in spending for the current budget period as sales tax revenues continue to underperform initial budget projections.

The cut means that UT will have to reduce its budget by an additional $7.5 million for the current budgeting period, which ends in September, said Kevin Hegarty, the University’s chief financial officer.

“We don’t know where [we’re going to cut], we haven’t had a chance to discuss it,” Hegarty said. “Obviously, any reductions we make, we’d want to be thoughtful, but that doesn’t make it any easier, having already cut 5 percent.”

He said the UT Budget Council would be getting together “soon” to discuss the latest budget cut request from state leaders.

This budget cut would come on top of the $15 million reduction that Gov. Rick Perry, Lt. Gov. David Dewhurst and Texas House Speaker Joe Straus ordered early this year. Those cuts will be followed by an additional 10-percent cut to UT’s budget for the 2012-2013 budgeting cycle.

In all, UT’s budget is projected to be $52 million smaller than it was when the legislators passed the current budget in 2009 — before legislators offer any additional cuts as they attempt to close an estimated $25 billion budget shortfall.

The letter from Perry, Dewhurst and Straus comes three weeks after the House speaker and lieutenant governor announced at a Legislative Budget Board meeting that they would seek the extra spending cuts but weren’t ready to announce the details.

“Texas’ economy remains strong and as we lead the nation in recovery from the economic downturn, we will continue to ensure that Texans’ tax dollars are spent prudently,” Perry said in a statement released Monday. “Identifying these savings builds on our ongoing call to keep government spending in check so that we can balance our state budget without raising taxes and continue to attract businesses that create jobs for Texans.”

Leading Democrats say there is no way to balance the budget with just cuts alone because the budget deficit makes up almost 30 percent of state-controlled spending.

“What’s being said in Austin by the newly elected members is that they [want to balance the budget] strictly by cuts, I don’t think they know what they’re talking about,” said Sen. John Whitmire, D-Houston, chairman of the Texas Senate Criminal Justice Committee.

Whitmire said Texas wouldn’t be able to provide the basic services — such as environmental protection, road maintenance, public or higher education or public safety — with such cuts to the budget deficit and said the state must look at ways to increase revenue.

He made the remarks about the overall budget crisis last week in the context of discussion about what cutbacks to public safety might mean for the adult correction system.

“Higher education has already raised their tuition beyond any reasonable amount. The negative impact of tuition increases is being felt and they’d be required to raise tuition again,” Whitmire said. “When we go through the reality check, then everyone will sober up and realize that we’ve got a real trainwreck on our hands.”