by Kate Alexander

Texas' cuts-only approach to its budget shortfall won't solve the state's long-term fiscal problems, according to Standard & Poor's, a major bond rating agency.

"We believe that a balanced approach that includes both revenue enhancements and expenditure cuts has a higher potential of success in preserving the state's long-term structural budget balance than a strategy that relies solely on expenditure cutbacks," wrote S&P credit analyst Horacio Aldrete-Sanchez in a report released last week.

Though S&P is not likely to join the Texas Forward coalition, the analyst's language mirrors that of the education groups, health and human service advocates and faith leaders that have decried the deep budget cuts.

Aldrete-Sanchez also emphasized that the state's budget hole is not a one-time problem that will go away as the economy improves.

"In our view, the state's budget imbalance is likely to reappear or persist beyond the upcoming biennium unless other sources of revenue or additional budgetary flexibility are identified to fill this growing funding gap," the analysis continues.

But new revenue is still not being publicly discussed as Texas seeks to close a budget shortfall topping $15 billion to $27 billion, depending upon who is doing the counting.

Filed Under : Tax Increases, Spending Cuts