The 83rd Texas Legislative Session Begins on January 8th

There's no doubt about it. Federal dollars pay for a lot of things in Texas. This year's state budget included $33 billion in federal money. Overall federal spending in Texas totaled more than $220 billion in 2010. Eva DeLuna Castro is a budget analyst with the Austin-based Center for Public Policy Priorities.

"These dollars in the state budget, only one out of seven dollars comes through the state budget. The other money is paying for things like military spending or Social Security or Medicare. So, $33 billion just in 2012 is bigger than any other way of paying for things in the state budget. The sales tax is the next largest. That generates about $24 billion a year."

Suffice it to say, a cut in federal dollars would be felt here in Texas, mostly in funding for housing, environmental programs, law enforcement and nutrition, programs we typically don't pay for with state dollars.

"It's almost like Texas is a little bit of a spaceship that might be flying a little too close to the Sun. And the Sun being the federal government."

Rob Eissler is a Republican State Representative from The Woodlands.

"The gravitational pull is tough. You know, with the Feds, instead of providing money, start to turn into a vacuum, it would have ramifications that would be pretty ominous."

Eissler says Texas is lucky to have lawmakers who are generally fiscally conservative. He says a cut in federal dollars would hurt, but wouldn't cause the state economy to grind to a halt.

"There may be certain nudges in the budget to cover some things that have to be covered. So it comes down to Texas has been more attuned to needs, they've been more willing to fund the needs rather than the wants."

But Democratic State Representative Garnet Coleman of Houston says the state has already cut funding in too many areas and the fiscal cliff would be an excuse to cut even more, especially in education.

"This would only give more fodder to the governor and others to cut funding for education. The governor is talking about not putting back the $4 billion that was cut in the last biennium. That's a lot of money in public education."

Eva DeLuna Castro, the budget analyst from Austin, says even if negotiations fail in Washington, we'll more likely go down a fiscal ramp in Texas, not off a cliff.

"Everything just doesn't happen on January 1st or December 31st. It's a gradual loss in money. The school districts, they know that they wouldn't lose this money until the school year that starts next fall, so they might have time to prepare for it. But the chances are that they would just figure out who doesn't have a job anymore. It doesn't all happen right away."

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