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Strategies to Overcome the Financial Crisis in Texas Local Government

Feb 23, 2023 | 0 comments

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Feb 23, 2023 | Essays | 0 comments

The occurrence of global finance crisis witnessed previously has its impacted effects being felt years later in major economies especially the highly populated states of the United States with no exemption to Texas government. The financial problems facing the Texas local government are due to various factors within the government and some factors outside the local government. The problems can be categorized into, one, high expenditure rates, two, low revenue collection that do not match the expenditure, three, global financial crisis due to economic meltdown experienced in the entire world, four, the budget practice principals difficulties experienced during implementation.

The above highlighted financial problems have engulfed the local government of Texas and crippled its operations thereby experiences hardships implementing its policies to the citizenry. According to Hendrick (2011) the main financial crisis witnessed in Texas starts with the global financial crisis that happened years back and which major economies are trying to overcome. However, returning to the optimal level of operations has been elusive to Texas government and other states as well. Fiscal and monetary policies have been enacted both by the local government and the national government to try reverse this tendency, but the results have been gradual and will take time. This has impacted Texas government negatively and hence the emergence of the crisis to do with finances.

Heavy expenditure been carried out by this government has exceeded its revenue available. Several policies being implemented by the Texas government ranging from the medical care programs are hugely impacting on the revenue located. This is due to escalating medical costs, and more beneficiaries are being enrolled in the program. Other expenditures eating into the revenues are the pension schemes and the retirees’ healthcare schemes (Nunn 1962).

The collection of revenues by the Texas government rarely meet the set target due to methods of collection seems impaired, and the result comes to low revenue to finance the budget estimates for health, infrastructure, and schools. Kaufman & Benston (1990) stated that several activities eat into the tax base of the Texas government leading to reduced finances to run the operations of the local government. This adds to the financial problems of the local government overtime when such activities are accumulated without finding working solutions.

Another cause factor that leads to financial problems in the local government of Texas is the difficulties in practice principles of the budget estimates. Lack of financial transparency in the budgets present another hurdle for understanding the problems ailing the financial sector. This further complicates the already tricky problems and finding solutions becomes more elusive than earlier anticipated. Things become worse because of the no proper information about grants, and borrowed funds are documented. Tracing these finances not only complicates the situation but also worsens the process of finding the working solutions. Budget estimates need to be prepared in a manner that allows sustainability and stability. According to Rist & Pizzica (2015) ambiguous budget practices develops financial problems, and such practices are witnessed within the Texas government thereby dragging the local government more into the financial mud. Several other issues play a role in the financial problems of Texas but majorly are those discussed above, and finding solutions to these problems will come a long way to removing the local government from the financial crisis.

The uphill task is to find the proper and working strategies that can be applied so as to save the financial crisis of the Texas local government. Such include: first is the surgical structural changes to the tax system to avoid tax evasion to increase the local revenue collection. To avoid missing on important tax deductions, the system should be made broad enough to encompass all sectors.

Information about grants and borrowed funds should be made public and in a manner that is transparent, participatory by the citizenry and open to all. This enables the public to query some of the estimates, as well as the state agency to check and advisory where necessary.

The local government of Texas needs to check on the budget deficit to ensure that it is reduced to the minimal level that is easy to finance. Huge budget deficits tend to have long-term strains on the finances as well as pushes the loans level to unsustainable levels.

Moreover, the state needs to assist the local government in financing its budget through grants, loans, and other means especially when the local government experiences distress in finances. Other expenditure that eats into the budgets such as the pension, healthcare, insurance and old age welfare through legislation and rules should be managed properly, and all information regarding its execution highlighted. Risks analysis is needed into such schemes and mechanisms placed in ordering proper enrolment to success.

Harmonizing the budget of the local government of Texas and the state is necessary to indicate both spending obligations so as to avoid duplications of functions. This encourages the best practices that enable the public to get value for their finances.

These above strategies are mainly what can be used to help Texas government rise above the financial problems it is currently experiencing.


Hendrick, R. M. (2011). Managing the fiscal metropolis: The financial policies, practices, and health of suburban municipalities. Washington, DC: Georgetown University Press.

Kaufman, G. G., & Benston, G. J. (1990). Restructuring the American financial system. Boston: Kluwer Academic Publishers.

Nunn, W. C. (1962). Texas under the carpetbaggers. Austin: University of Texas Press.

Rist, M., & Pizzica, A. J. (2015). Financial ratios for executives: How to assess company strength, fix problems, and make better decisions.

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