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For the next governor of Texas, one task will overshadow all the others on the to-do list: closing a state budget shortfall that some projections put as high as $15 billion. During the second Republican gubernatorial debate Jan. 29, candidates were asked to detail what programs they would cut or taxes they would raise to balance the budget. Debra Medina, who is in the three-way race for the GOP nomination with Gov. Rick Perry and U.S. Sen. Kay Bailey Hutchison, took the opportunity to criticize the incumbent’s fiscal record. You know, it’s unfortunate that the governor’s not taking his own fiscal advice, Medina said. The 'Fiscal Notes' just released by the (state) comptroller last week shows in the executive department in the first fiscal quarter of this year, we’ve seen a 13.5 percent increase in spending, double-digit spending out of the executive branch in the state of Texas, when everyone here has been tightening their belts for a year. Has Perry become a heavy-spending governor? We wondered whether Medina's statement was on the money. The Fiscal Notes that Medina cited is a newsletter produced by the state comptroller’s office. For the first quarter of fiscal 2010 — that’s September through November 2009 — it reported that expenditures went up 13.5 percent for the executive segment of general government compared with spending by that segment in the same quarter the previous year. But what falls under the executive category? We put that question to the state comptroller’s office, which answered with a list of 25 agencies categorized as executive and administrative. That's not to say that the governor is directly responsible for all of those. In Texas, executive powers are spread among elected officials, including the governor, the attorney general and the comptroller. At least five agencies on the list are the responsibility of either the attorney general’s office or the comptroller’s office. Most of the other so-called executive agencies are commissions, offices or departments led by administrators appointed by the governor or whose governing boards include gubernatorial appointees. The governor's office is directly responsible for only three line items on the comptroller's list, including the Office of State-Federal Relations. Now, let’s look at the money. The 13.5 percent jump in spending that Medina referenced reflects a $196.5 million net increase for all the agencies. (The net part is important because some of the agencies saw their expeditures decline in the first quarter.) By far the largest spending jump ($87.3 million) occurred in the Texas Department of Housing and Community Affairs, whose board is made up of gubernatorial appointees. However, almost all those dollars came from the federal government, not the state. They were spent on recovery costs related to Hurricane Rita, which hit in 2005; on utility payments for low-income people; and on a homelessness prevention program and other initiatives that were part of the federal stimulus package approved by Congress last year. The attorney general’s office is No. 2 on the published spending list. Most of its $36 million increase — about $32 million — was attributable to higher collections of child-support payments. The comptroller’s office also accounts for a significant chunk of the spending increase, about $36.8 million. All told, these free-standing agencies — Housing and Community Affairs, the attorney general’s office and the comptroller’s office — account for about 80 percent of the net increase in first-quarter expenditures cited by Medina. So where does spending controlled by the governor fit in? Of the three entities on the list that are directly tied to his office, two spent less during the first quarter compared to the year before. The third line item, Governor -- Fiscal, showed a $15 million net increase in the quarter. According to Perry’s office, a small portion, about $800,000, was federal stimulus money. The biggest expenditure of state funds, $10 million, consisted of disaster relief related to hurricane damage. The rest went to the governor’s economic development initiatives, the Emerging Technology Fund and the Texas Enterprise Fund, as well as incentives to attract film projects. Summing up: The governor's office was directly responsible for about $14 million in increased state spending, or 7 percent of the $196 million spending increase that caught Medina's attention. One caution: Virtually every agency official and government watcher we spoke with warned against drawing conclusions about spending or budget trends by solely looking at one quarter of activity, partly because spending can fluctuate based on when various grants and loans are passed through. Finally: Medina is correct that overall spending by agencies in the executive portion of state government went up 13.5 percent in the first quarter. But placing the responsibility at Perry’s feet isn't justified. The largest chunk of the spent money came from the federal government, and the bulk of the remaining executive branch expenditures took place in agencies run by other elected officials. We rate Medina's statement as Half True.
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