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.