         if (isNaN(newHeight))
             newHeight = getPreferredBoundsHeight();
         
-        // re-add the top and bottom offsets.  (measuredTextSize.y - tightTextHeight) gives us
-        // the sum of top and bottom offsets
-        if (useTightTextBounds && (measuredTextSize.y > tightTextHeight))
-            newHeight += (measuredTextSize.y - tightTextHeight);
+        if (useTightTextBounds)
+        {
+            if (newHeight > 0)
+            {
+                var bottomOffset:Number = measuredTextSize.y - tightTextTopOffset - tightTextHeight;
+                
+                // when clipping, allow gutter to be outside of height
+                // use 2x gutter (actual gutter is not part of tight text height)
+                // when newHeight==1, actual visible height==3 (1px + 1x gutter)
+                if (newHeight < tightTextHeight)
+                    bottomOffset = StyleableTextField.TEXT_HEIGHT_PADDING;
+                
+                // re-add the top and bottom offsets.  (measuredTextSize.y - tightTextHeight) gives us
+                // the sum of top and bottom offsets
+                newHeight += (tightTextTopOffset + bottomOffset);
+            }
+        }
         
         this.height = newHeight;
     }

    //----------------------------------
    //  Text alignment helpers
    //----------------------------------
    /**
     *  @private
     *  The height of the first line of text to the baseline of the bottom line
     *  of text.  Handles both single line and multiline text.
     */
    private function get tightTextHeight() :Number
    {
        commitStyles();
        

    /**
     * @private
     */
    public function setLayoutBoundsPosition(x:Number, y:Number, postLayoutTransform:Boolean=true):void
    {
        if (useTightTextBounds)
        {
            // offset the positions by the left gutters and the top offset
            this.x = x - StyleableTextField.TEXT_WIDTH_PADDING/2;
            this.y = y - tightTextTopOffset;
        }
        else
        {
