Colorado budget alert: Beware Texans talking fiscal responsibility and big gov’t takeovers
Last year outspoken Republican Texas Governor Rick Perry boasted about his state’s conservative approach to economics and its lean budget. He derided the budget messes faced by other states and blasted Democratic-controlled Washington, telling Tea Party crowds that lawmakers had abandoned the Founding Fathers’ vision of limited government. He said President Obama’s Washington was strangling Americans with taxing and spending. Tea Partiers waved signs criticizing Obama’s $780 billion economic stimulus package. Perry later told reporters that Texans were getting so fed up that they might consider seceding from the Union. Then news came that, hidden under budgetary lipstick and rouge, Texas faced a major $18 billion budget shortfall– as much as 20 percent of the state’s next two-year budget. Today came news from the National Conference of State Legislatures that Perry’s Texas took more federal stimulus money than any other state in the country. In fact, Texas plugged 97 percent of its budget shortfall last year with Obama stimulus cash.
The Wall Street Journal:
“There is no way that they will be able to come up with $18 billion in cuts,” said Eva DeLuna Castro, a senior budget analyst at the Center for Public Policy Priorities, a nonprofit that advocates for low-income Texans. “They would have to shut down our prison system.”
Conservatives say that while cutting enough to balance the budget will be hard, it can be done, and that the governor is the right man to do it. “He has worked hard to encourage the legislature to keep spending within the revenue available,” said Talmadge Heflin, director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a conservative think tank that backs limited government.
Most states have addressed or still face gaps in their budgets totaling $196 billion for fiscal year 2010, while tax revenue declined in the final quarter of 2009 in 39 of the states for which data is available.
The governor’s cost-cutting zeal is being questioned after the Associated Press reported he had spent some $600,000 of taxpayer dollars over the past couple of years to rent and maintain a luxurious home while the official governor’s mansion was repaired after a fire.
The state’s Democratic Party responded to the report with a YouTube video that flashes images of the governor’s rental home—complete with wood paneling, a chandelier and a heated pool—and plays the theme music from the television show “Lifestyles of the Rich and Famous.”
Colorado lawmakers are presently wrestling with a $1.2 billion budget shortfall. The last two years, lawmakers and former Governor Bill Ritter made historic cuts to the state budget. This year’s crop of lawmakers and Governor John Hickenlooper are sure to match that slashing.
Yet policy analysts here have said that just making cuts isn’t the answer, that it’s only one side of the equation. Lawmakers either have to look to generate more revenue or government services, already cut to the bone, will simply fall away. That’s an outcome some hard-core fiscal conservatives suggest would be best, permanently lowering tax rates and minimizing government in favor of the private sector.
Texas offers a cautionary tale. As the Journal reports, Texas has one of the lowest tax burdens in the nation. It doesn’t even levy income tax. In the recession, however, sales-tax revenue dipped, cutting off the prime source of income for government, making Perry’s Lone Star state, in effect, an ungrateful and misbehaving ward of the Obama Administration.