The recession isn’t the only culprit

You may have noticed that Gov. Rick Perry – always eager to divert attention from his own failures has declared an “emergency” for state legislation that would call on Congress to pass a balanced budget amendment to the U.S. Constitution. Now, if only he could figure out a way to cure a very real emergency. That, of course, would be the $27 billion budget hole that must be filled before Texas can meet its own constitutional requirement for a balanced state budget.

By “cure,” I mean crafting a balanced, realistic solution that wouldn’t add tens of thousands of school teachers and state employees to the unemployment roles, close untold numbers of public schools, price thousands of young people out of college, sink Texas’ bottomoftheladder health care standards even lower and wreck the state’s economy. Those would be some of the results of the budget proposal laid out in the House earlier this week to meet Perry’s orders to write a new state budget without raising taxes or spending any of the Rainy Day Fund.

Senate budgetwriters are expected to present their startingpoint budget plan next week, and it won’t be much better. The potential misery may just be reconfigured.

In all his posturing over “belttightening,” the governor would just as soon everyone forgets that a big chunk of Texas’ revenue shortfall is the direct result of his and the legislative leadership’s mismanagement. As one of my colleagues noted, executives in the corporate world normally are fired for such problems. The Texas political world, however, is obviously different.

I am talking about Perry’s electionyear scheme to cut school property taxes, which he convinced the Legislature to enact in 2006. In return for onethird reductions in school maintenance taxes and strict limits on future local increases, the Legislature passed a package of state tax increases – notably an increase in cigarette taxes and a new business margins tax – to allegedly make up the difference.

But there was no increase in public education funding. And, the new business tax – partly by design and partly because of the recession – has never raised enough revenue to close the funding gap left by the property tax reductions. That socalled “structural deficit” now accounts for more than $9 billion of the state’s $27 billion revenue shortfall.

To his credit, Senate Finance Chairman Steve Ogden served notice on the opening day of the legislative session that the business tax must be fixed. Whether that means being fixed to the tune of $9 billion is unlikely. Perry, so far, has danced around reporters’ questions of whether he would support any changes in the tax. And, any attempt to revise the tax to raise significant amounts of revenue will surely be greeted with howls from many business people, including some who claim to be strong supporters of education.

Time will tell how this plays out, but it is highly unlikely that Perry will declare a cleanup of his own mismanagement an “emergency.”


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