Outbreak leaves Texas with $ 1B deficit as virus still rages

AUSTIN — The coronavirus pandemic has created a nearly $1 billion deficit in the Texas state budget as the nation’s energy hub remains hampered by a slow recovery and a half-million fewer jobs than a year ago.

The forecast Monday by state officials is brighter than bleak projections last summer that warned of a spending deficit four times the size. Still, the shortfall could result in cuts.

“Unfortunately, the economic damage done by the pandemic has created a hole that it will take some time to climb out of,” Republican Comptroller Glenn Hegar said.

The GOP-controlled Legislature is scheduled to return to work Tuesday for the first time in two years, at a time when the spread of the virus has never been worse in the state. More than 13,000 patients with COVID19 are hospitalized and the seven-day rolling average for daily new cases in Texas is more than 23,000.

At least two Democratic lawmakers announced they would not attend Tuesday’s opening ceremonies due to the record high of infections, including Rep. Michelle Beckley, who described the gathering at the Capitol as a “superspreader” event.

Republican Gov. Greg Abbott, who has come under sharp criticism from within his party over a statewide mask mandate and virus restrictions, has kept some limits on bars and restaurant capacity in place but ruled out more lockdowns.

Texas has billions of dollars in reserves and the projected $1 billion shortfall is a fraction of the state budget, making it likely manageable for lawmakers over the five-month session. Many other states have also slashed their budgets due to the impact of the virus on the U.S. economy.

California made deep spending cuts last year, but last week Gov. Gavin Newsom, a Democrat, revealed the most expensive budget in the state’s history as wealthy people’s incomes have soared.

Hegar said Texas’ hospitality sector has been hardest-hit but said a rebound in oil prices and production substantially improved the state’s economic outlook from just a few months ago.

Many economists say that once coronavirus vaccines are more widely distributed, a broader recovery should take hold in the second half of the year.

Because the Texas Legislature meets only every other year — and only for 140 days — the virus and budget deficits are just some of the issues that have stacked up waiting for lawmakers since 2019. One includes calls for policing reforms in Texas following the death of George Floyd, who was raised in Houston, and widespread protests last summer over racial injustice.

It will also be the first time that Texas lawmakers have met since the August 2019 shooting at a Walmart in the border city of El Paso that killed 23 people.