Texas often uses the following tactics to balance the budget:
1. Increasing fees on various businesses: Texas can raise revenue by increasing fees on businesses operating within the state. This tactic allows the state to generate additional income without directly impacting individual taxpayers.
2. Borrowing from the Rainy Day Fund: The Rainy Day Fund is a reserve fund set aside for times of economic downturn or emergencies. Texas may borrow from this fund to cover budget shortfalls without having to resort to drastic measures like raising taxes or cutting essential services.
3. Reducing funding for high-cost items such as Medicaid: Texas can balance the budget by cutting funding for expensive programs like Medicaid. By reducing expenditures in certain areas, the state can reallocate resources to address budget deficits.
By employing these tactics, Texas can effectively manage its budget and ensure financial stability without resorting to raising the state income tax or seeking loans from the federal government.
