Texas is fortunate to be one of seven states that do not tax individual income. This legislative session, Texas lawmakers are struggling to address a state-budget deficit estimated between $15 billion and $27 billion over the next two years. The Governor and Republican leaders in the state are advocating sharp spending cuts as a solution to the problem but are facing heavy criticism from the media and special interest groups for their proposed cuts.
During the campaign of 2010, Republican leaders pledged not to raise taxes, and to cut wasteful spending in order to close the shortfall. Legislators and conservative activists are also reluctant to touch the state’s $9.4 billion “Rainy Day Fund”, one of the largest in the nation. To date, the Governor, along with leaders in the House and Senate have agreed to use $3 billion dollars from the fund to balance last year’s budget, but the Governor has pledged not to use any more “Rainy Day” funds to close the 2012-2013 deficit.
So far, the proposed budget contains significant cuts, but it is manageable, says Talmadge Heflin, director of the Center for Fiscal Policy at the Texas Public Policy Foundation. He points out that schools have largely been spared in the past, and can cut personnel outside of the classroom. In addition, colleges and universities within the state system have other sources of revenue, such as tuition and fees.
There is one proposal being heavily promoted in Texas this year as a new source of revenue without a tax increase–casino gambling. The legislature is overwhelmingly Republican, and opposition by conservatives has been staunch. Still, given the budget shortfall, gambling advocates’ chances may be the best in years and at least two bills legalizing gambling have already been filed. TCAN opposes these proposals on the grounds that gambling revenue is unreliable and new revenue just means new opportunities for more government spending. Finally, there are moral and societal cost concerns. Suzi Paynter, director of the Baptist Christian Life Commission, says slot machines are bad for Texas families. It’s hard not to agree.
On March 14, 2011, in reaction to protests at the Capitol from education special interests, Texas Citizen Action Network President and CEO Jim Cardle said, “This budget crisis calls for every Texan to make a commitment today to help us prioritize every dollar that our state government is spending. Now is the time for a top to bottom review, so we can cut wasteful spending. An example of this out of control spending within education is the fact that Texas schools employ one non-teacher for every teacher. It has even been reported that some school superintendents in Texas make north of $340,000 a year in base salary.”
“Texas has a spending problem, not a revenue problem.”
RELEVANT NEWS & USEFUL LINKS
- Indivisible Conservatism
- Sen. Shapiro: “There will be no new taxes in this budget, in my view.”
- Why Rainy Day Funds Can’t Always be Used on Rainy Days
- The Big (in the) Red One
- Senator Van de Putte “Challenges My Colleagues to Dig Deep” on Budget Shortfall
- Texas Can Show Nation How to Manage Government Through Tough Economic Times
- Running on Empty
- Texas at a Crossroads: Tough Questions, Fiscal Wisdom & Non-Essential Services