Reply With Quote
The arithmetic of TX budget shortfalls is way beyond the TX JimmyRicky-suckng bubbas to calculate. As long as TX HS football isn't touched, the bubbas are OK. Not really a demographic that values education anyway.
Even Worse than Bush?
AlternetHow Rick Perry Created His State's $27 Billion Budget Crisis
Since Perry is running for president on a record of fiscal responsibility, it’s important to understand his 2006 decision that wreaked havoc on his state.
August 24, 2011 |
In his State of the State speech in February, Rick Perry described the $27 billion budget shortfall confronting the Texas Legislature.
“Now, the mainstream media and big government interest groups are doing their best to convince us that we’re facing a budget Armageddon,” Perry said. “Texans don’t believe it and they shouldn’t because it’s not true.”
The $27 billion equaled 15 percent of the $182 billion biennial budget the Legislature had passed two years earlier. If not Armageddon, an apocalyptic loss of revenue in a low-tax state that provides bare-bones public services.
Perry’s statement was even more remarkable because most of the budget shortfall was a consequence of a business-tax bill he pushed through the Legislature in a special session five years earlier.
With Perry running for president on a record of fiscal responsibility (and job creation, discussed later in this article), it’s important to understand the consequences of his 2006 “business margins tax” — and to ask if the governor knew that the tax reform he proposed would undermine the state’s budgets in the years that followed.
First, some background. Texas is one of nine states with no income tax. It relies on property taxes to pay for public services — notably, to pay for public education, which consumes the lion’s share of property taxes.
Because there is no income tax, property taxes are high. In 2006, Perry called a special session to address property taxes. With no income tax, there are no easy fixes. Yet Perry found one. A business-margins tax he said would provide enough revenue to allow for reductions in property taxes.
It was evident at the time that the new tax would not deliver what the governor promised. The state comptroller, Carole Strayhorn, had her staff run the numbers on Perry’s tax-reform proposal.
“In 2007,” she wrote in a letter to Perry, “your plan is $3.4 billion short; in 2009, it is $5.4 billion short; in 2010 it is $4.9 billion short, and in 2011 it is $5 billion short. These are conservative estimates.”
The comptroller warned that “no economic miracle will close the gap your plan creates. Even if every dollar of the current [2006] $8.2 billion surplus was poured into the plan, it would not cover the plan’s cost for more than two years, 2007 and 2008. The gap is going to continue to grow year by year.” The shortfall the bill created could only be closed by tax increases, the comptroller warned, “or massive cuts in essential public services — like public education.”
“It was not only Ms. Strayhorn’s letter,” Houston Democratic Rep. Scott Hochberg told me. “Every official do ent predicting the state’s financial crisis at the time predicted exactly what happened.”
Hochberg, the Legislature’s resident authority on public-education finance, also warned Perry that the tax bill he was promoting would not produce the revenue he promised.
“I asked the governor about this in a small meeting amongst legislators,” Hochberg said. “His answer to me, I remember it as clear as day, was ‘Scott, use your common sense. Don’t you know that when we cut property taxes we will see such an economic boom that you will never even notice the drop in revenue?’”
Perry’s response to the Democratic legislator was candid — and newsworthy. Perry admitted he knew that the tax reform he proposed would result in a “drop in revenue.”
It's incredible that Perry can run on forthe GOP nomination based on his fiscal record when Texas is broke...why doesn't the corporate media call him on this ....oh, that's right, they're too busy blaming the poor...
Last edited by Nbadan; 10-21-2011 at 11:48 PM.
The arithmetic of TX budget shortfalls is way beyond the TX JimmyRicky-suckng bubbas to calculate. As long as TX HS football isn't touched, the bubbas are OK. Not really a demographic that values education anyway.
Anyone here care to back up the "common sense" that taxing businesses more so that people can save a few extra bucks on their property taxes would somehow result in an economic boom? Since I got A's in college, I don't have this "common sense" and usually rely on "educated opinion" instead. Someone help me out.“I asked the governor about this in a small meeting amongst legislators,” Hochberg said. “His answer to me, I remember it as clear as day, was ‘Scott, use your common sense. Don’t you know that when we cut property taxes we will see such an economic boom that you will never even notice the drop in revenue?’”
braggartSince I got A's in college
David Dewhurst knew too..
They banked on a losing bet and now the state pays...“Dewhurst now says that he knew that revenue projections from the revised business franchise tax ‘were inflated’ and told Senate members in closed-door caucus meetings at the time that the business tax would not perform as advertised ‘and that we were going to create a structural funding deficit in state government.’ But Dewhurst said he also believed at the time that ‘we would grow out of it by now.’”
The TexasEnterprise fund is a tax-payer funded Perry slush-fund
All these facts are out in the public record....why isn't the corporate media all over this?the Texas Enterprise Fund, was started in 2003 by drawing $285 million from the state’s Rainy Day Fund. The same Rainy Day Fund the governor this year declared off limits for the public schools.
The Enterprise Fund also withdrew $161 million from the Unemployment Compensation Trust Fund in 2009, at a time when unemployment taxes paid by businesses tripled and only 34 percent of unemployed workers received benefits.
Add to that the total funds appropriated by the Legislature, and you get close to $500 million, all of which has or will be disbursed by the governor.
Perry has been in office for more than 10 years, which has allowed him to use his authority to make political appointments to expand the cons utionally limited powers of his office. He is, in other words, a very strong weak governor.
Every statewide elected office is held by a Republican. And the Republican Party holds a supermajority in both houses of the Legislature. This political hegemony has created a climate that discourages oversight of the Republican governor.
Public Interest Oversight
In the absence of official oversight, a good-government group, Texans for Public Justice (TPJ), did its own audit of the economic development funds and found that in 2009 the number of corporate grant recipients not fulfilling their obligations had increased from 42 percent to 66 percent.
Supply side through tax breaks is what the GOP is paid to do.
It's a ridiculous policy which has never worked....even for the biggest supply sider....Reagan....he ran up debt....
As governments give more and more to continue their rule, debts are going to happen. It's been that way for centuries.
RP had greased skids and a GOP dominant machine in TX. He never even had to try. No such massive GOP POTUS machine exists on the national level.
I'm voting in the GOP primary this year.
Apparently, JimmyRicky now has Repugs in nearly every single elected and appointed state-wide office, giving him much more power than intended by the TX cons ution. He can pretty much do as he pleases, and no sycophants will stand up to him. Sort of a "coup d'etat".
Now the Repugs are trying to continue DeLay's disenfranchising and gerrymander voting districts to entrench Repug power further.
Last edited by boutons_deux; 10-24-2011 at 09:20 AM.
Perry is such a tool but he'll be making big bucks just like Cain with his Palin style speaking gigs.
He might, but I don't see him as being even remotely as charismatic. He comes off as dumb, but unlike Palin, he even comes off as dumb to dumb people.
Supply-side "common sense".
Not sure what smiley can fully encapsulate the sheer stupidity of that statement.
I guess when you don't care about silly things like actual data and efficacy, all sorts of public policy solutions become possible.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
