The State of Texas is one of the richest states in the United States. It has an estimated annual budget of USD 209 billion. Over the years, Texas has registered a budget surplus worth billions of dollars. According to Schneider (25), most budget surpluses come from the sales of oil tickets since revenue and taxes from oil make the larger parts of revenues being collected by the state. The budget surplus is kept by the state for future utilization (Schneider 12). Surplus means that the expected expenditure is covered by the revenue until certain finances remain. Besides keeping budget surplus for future utilization, the state of Texas could spend the surplus on paying debts and even issuing a refund of sales tickets of oil to encourage investment in the State.Even though sales and use taxes have been criticized by some people that it favors the rich, it is the best taxation method to generate revenue (Marotta 4). The sales and taxes or taxing consumption increases production and decreases spending and therefore, the public would be able to save a lot of their incomes for future use. The sales and use taxes favor the public and it encourages investment because money does not spend by the public will automatically be used to invest within the state (Marotta 12).The projected budget surplus front a real challenge to policymakers and the challenging task is how to utilize the surplus. However, the policymakers should use the budget surplus to pay debts, build infrastructure and also keep some for future utilization if possible. The State government should cut taxes on household items, agricultural products, and food. It is because if the government cut taxes people would be encouraged to spend on food which will obviously improve the living standard of the public and increase tax collection as well. The government can increase spending as well on areas which have not been financed by the projected budget.In case of increasing spending, the argument before the legislatures should be based on the areas which the budget has not covered. The state should increase spending to reduce the amount of surplus. The spending should be increased in areas such as infrastructure by building roads, improving the condition of airports and bridges as well. The state of Texas can also increase spending on insurance coverage by paying for Medicare coverage for the aged and majority of citizens who do not have healthcare coverage.The budget deficit occurs when expenditure is higher than expected income. And when this occurs the government is forced to cut the budget in certain areas. However, the budget cut should affect funding to military, healthcare to allow the government to fund most needy areas which can allow the state government to function without interruption. Without the budget cut, the state would not be able to pay for salaries and pay for emergency services (Ramsey 5). The military and healthcare insurance are being funded by the federal government at the same time and therefore, the budget would not affect a lot but state programs would be affected if the budget is not applied.The Rainy Day Fund can be utilized by the state government when the revenue collected cannot finances all the need projects or programs which are being managed by the state government. The legislature can approve the spending from Rainy Day Fund when normal programs such payment of salaries, emergency services and healthcare of the State government cannot function due to lack of finances. It is also noted that the Texas lawmakers gave up the idea of setting up tuition fee at state universities to give university council autonomy in setting up tuition and general management of universities (Marotta 23). The lawmakers also gave up the idea of regulating tuition fee because it was opposed by several college and universities board which explained the process of increasing fee. The position took by most universities made legislatures to abandon the idea and let the universities to regulate tuition fee. It negatively impacts students because the college increases tuition fee at their own will, and therefore, increases the loan burden students.Works CitedMarotta, David John. “Is a National Sales Tax Really Fair?” https://www.forbes.com/sites/davidmarotta/2013/02/11/is-a-national-sales-tax-really-fair/#77f68c641790 (2013): 2-20.Ramsey, Ross. “Analysis: Expect some clouds in Monday’s Texas budget forecast.”https://www.texastribune.org/2017/01/06/analysis-expect-some-clouds-mondays-texas-budget-f/ (2017): 1-15.Schneider, Andrew. ” Texas Budget Shortfall Could Balloon To Nearly $8 Billion In2019.” https://www.houstonpublicmedia.org/articles/news/2017/08/11/230224/report-texas-budget-shortfall-could-balloon-to-nearly-8-billion-in-2019/ (2017): 2-34.