Federal grants represented 39.4 percent of Texas’ state revenue in 2011

Federal spending cuts build across Texas
Dallas Morning News
Scott Burns
Published: 12 October 2013

Gregory Cody was psyched this summer to negotiate a $1.3 million contract for airfield work at Fort Hood in Killeen.

But last month, he learned the project was canceled because of federal spending cuts.

“We had been waiting and it didn’t get funded,” said Cody, whose Dallas-based GCC Enterprises Inc. provides construction management. “I had some people where that was their project for the year, and now I have to find other work for them.”

Automatic federal spending cuts began March 1 after Congress couldn’t agree on how to cut the federal deficit by $1.5 trillion over 10 years.

The automatic budget cuts will slash budget authority by $109 billion for each year through 2021, but the fiscal cliff deal reached in December reduced the required cuts for the 2013 fiscal year to $85 billion. Cuts have continued into fiscal 2014, which began Oct. 1, because a deal to cut the deficit wasn’t reached.

To make matters worse, a partial federal government shutdown began two weeks ago as Congress bickered over the budget and funding for Obamacare, halting the flow of funds, contracts and information and increasing a sense of anxiety about the nation’s fiscal and economic policies.

“It’s an air of uncertainty with your customers because [the federal government] doesn’t have concrete plans on what their budgets are and what their projects will be,” Cody said. The Pew Charitable Trusts ranks Texas among the five states most vulnerable to spending cuts to federal grants and changes to federal spending on contracts, salaries and wages.

Pew estimates that federal grants represented 39.4 percent of Texas’ state revenue in 2011, based on the latest census data available. Of that, grants subject to automatic spending cuts made up 8 percent of Texas revenue in 2010. (Both percentages were higher than the national average.)
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