Dec. 7 (Bloomberg) -- Texas Governor Rick Perry and two other state leaders directed agencies to curb spending by as much as $750 million over the next nine months, citing “insufficient revenue” to cover costs.
The 2.5 percent reduction is aimed at producing savings of $500 million to $750 million, said Mike Walz, a spokesman for Lieutenant Governor David Dewhurst, who signed a letter to state officials with Perry and House Speaker Joe Straus. State revenue receipts for the year ended Aug. 31 came in $2 billion below estimates, they noted in the letter, which was dated yesterday.
“Reduced spending in the current fiscal year puts state government in a better position to prepare for the budget reductions that will be necessary to balance the budget,” Perry, Dewhurst and Straus, all Republicans, said in the letter.
A 6 percent increase in sales-tax receipts in September and October over year-earlier periods won’t make up enough ground to avoid reduced spending, they said.
Texas has the second-largest state economy behind California, according to the U.S. Commerce Department. It may have a budget deficit of more than $15 billion over the next two years, according to Dewhurst and other officials. The state gained 172,800 non-farm jobs in the last year, the Texas Labor Department said Nov. 19. The 8.1 percent October unemployment rate was the lowest of 2010, it said.
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