DALLAS The Texas comptroller this week recommended hundreds of proposals to save the state taxpayers $2.1 billion in the upcoming two-year budget period and $4.6 billion in the next five years.
In his third performance review of Texas, Comptroller John Sharp outlined more than 350 proposals that would result in direct savings, including $444 million in the next biennium from imposing a hiring freeze and trimming the state's payroll by about 11,000 positions.
Sharp also recommended 44 cost-cutting moves for which benefits cannot be calculated for the next budget period, which begins Sept. 1, 1995. Among them: .Revoking $500 million in authorized but unissued debt for the doomed Superconducting Super Collider project, and abolishing the Texas treasurer's office.
"Our aim is to halt the runaway growth of the state bureaucracy, which has ballooned at twice the rate of the private sector in the past five years," Sharp said. "The fat in state government isn't just sitting on the surface. It's marbled down through the structure of public policy."
While Sharp says he has already saved Texas taxpayers $6.2 billion since the early 1990s by the adoption of cost-cutting measures he recommended in two earlier reports, he said more permanent changes need to be made.
"Now it's time for a permanent lifestyle change to strengthen both the muscle and the heart of Texas state government," he said.
Among Sharp's recommendations: A cap on all state employment except for prison workers; a reduction in the state's contributions to retirement plans for teachers and state employees; and consolidation Of administrative functions of state Licensing boards and other state agencies.
In the report, Sharp also reiterated the idea of abolishing the state Treasury and shifting key duties to the state comptroller's office, including investment of the state portfolio and administration of the unclaimed property division.
The proposal mirrors the suggestion made by Texas Treasurer Martha Whitehead who won reelection earlier this month on a platform of abolishing her office to save Texas taxpayers about $7 million a year.
The Treasury proposal as well as some of Sharp's other recommendations need to be approved by the state legislature and by the voters. "I would be extremely. amazed if the voters would be opposed to this," Sharp spokesman Kelly Fero said.
Fero also said he expects approval of Sharp's recommendation to revoke $567.5 million in authorized but unissued bonds.
Under Sharp's proposal, $250 million in GOs and $250 million in revenue bonds or half the total $1 billion in bonds that were authorized for the Superconducting Super Collider project would be removed from state books.
The $500 million of bonds were never issued because Congress last year killed the giant physics project under construction near Dallas, and the state no longer needed the proceeds to pay for its share of the super collider.
To revoke the authorization, the state legislature would have to approve both the general obligation and revenue bonds, and the voters would have to approve the removal of the general obligation debt.
Sharp also has recommended that $67.5 million revenue bonds that would have been used for a state capitol renovation project be revoked because the issue has been declared illegal by the state attorney general's office. In addition, the renovation has already been financed by general state revenue.
Sharp's office maintains that lowering the state's potential debt could eventually raise Texas' bond. rating and lower interest costs.
Rating agency analysts said, however, that wiping authorized but unissued debt off the books won't affect the state's bond rating. Standard & Poor's Corp. and Moody's Investor's Service give an AA rating to the state's general obligation bonds while Fitch Investors Service assigns an AA-plus.
"It would clean up their books to take it off, but every analyst has realized they aren't going to issue the super collider bonds," said Claire Cohen, vice chairman of Fitch Investors Service.
Cohen said, however, that other moves toward consolidation of state agencies would be an improvement.
Said Hyman Grossman, a managing director at Standard & Poor's, said "Bonds authorized but unissued don't bother us. That does not keep the rating down."
Instead, Grossman said, growth in Texas has placed a tremendous burden on schools and the health care system, and prison construction is piling up state debt.
Moody's Managing Director George Leung said: "Certainly, revoking the debt seems to be sensible," although it will not affect ratings.
Leung said he was more concerned about Texas' high per capita spending for prisons -- now the nation's highest, exceeding California.
