Rhetoric and the Increasing Texas Budget
Chairman of the Senate Finance Committee Senator Tommy Williams has been plugging the “good conservative budget … we can all be proud of” that the Texas legislature passed and Governor Perry left largely intact. Senator Williams claims with this budget, “we are living within our means while funding our priorities.”
Is this really the case?
In his January budget proposal, one of the three priorities identified by Governor Perry was to fund “essential water and transportation infrastructure.” He also laid out 5 principles for the “Texas Budget Compact”, one of which was to preserve a strong Rainy Day Fund. The Governor concluded saying “abiding by the Compact will not be easy, especially at a time when substantial revenue growth may cause some to want to spend that much more.”
The Governor must have a crystal ball. The temptation to spend was too strong for our legislators, many of whom are self-professed “conservatives”. With Republican majorities in both houses, a chance was lost to reverse the slide of the state into funding all kinds of activities that are contrary to the conservative principle of limited government.
The legislative spending spree included an almost 200 percent increase in funding for the crony capitalist Film and Music Marketing Program ($95 million), $57 million for the Emerging Technology Fund, and $120 million for the Texas Enterprise Fund. And despite attempts by conservative legislators to cut their funding, money was still appropriated for the Clean School Buses Program, the Alternative Fueling Facilities Program, the Texas Natural Gas Vehicle Grant Program and others. Various state agency executives’ salaries were also increased as much as 40 percent, including the Texas Health and Human Services Commission, the Director of the Department of Criminal Justice, and the Director of the Library and Archives Commission.
The Governor had originally asked for $1.8 billion in tax cuts, but the legislature only provided for $1.4 billion - $327 million of which is only temporary, leaving the real cut at about $1.1 billion. Funding of core functions of government, like water and transportation that Governor Perry had proclaimed “essential priorities,” took a back seat to government-sponsored mental health programs, Medicaid, family planning, and all of the various crony capitalist funds previously mentioned. At the end, the legislature decided to do little for transportation and fund water only by looting $2 billion from the Rainy Day Fund, violating the Governor’s Compact to preserve a strong Rainy Day Fund.
When we put together our personal budgets, we prioritize; with essentials (like food, housing and transportation) being funded ahead of all the nice-to-haves. This budget did it exactly backwards. Instead of providing funding for the water and transportation priorities first, these essentials were left to last and, because there were no funds left, the critical need to provide funding for water was used to justify a raid on the Rainy Day Fund. What is “conservative” about a budgetary methodology which is comparable to blowing your money on beer and fancy restaurants, and then having to tap into your savings to pay rent?
The Wall Street Journal’s editorial last weekend criticized the Texas budget, suggesting Texas had gone the way of California (whose legislature this week approved a budget $10 billion lower than Texas’). Senator Williams was quick to condemn the Journal’s conclusions, claiming in his newsletter that the paper used “fuzzy math promoted by one Texas group to sully our rock solid Texas budget.” Senator Williams expressed outrage that the Wall Street Journal “accused Texas of a whopping 26 percent spending increase.” He said “Nothing could be further from the truth.” He proceeded to explain that even though the budget increased from $84 billion in the 82nd session to $106 billion in the 83rd session (a $22 billion increase, or, 26 percent), not all of it counted as an increase, because part was spent on “hard-to-oppose expenses,” and $6.5 billion of it paid the bills not funded by the 82nd session’s budget, like Medicaid and education, which of course many legislators took credit for as “trimming state government spending” when running for re-election in 2012.
In his newsletter, Senator Williams accused the “group” that was promoting the “fuzzy math” of doing so simply to “keep their followers fired up for fund-raising reasons.” We are not sure which “group” the Senator was referring to, but there are many groups criticizing the budget based on the reasons stated above. The list includes the Texas Public Policy Foundation, Americans for Prosperity, Americans for Tax Reform, the American Legislative Exchange Committee, Young Conservatives of Texas, the National Taxpayers Union, the Institute for Policy Innovation and us, the Texas Patriots PAC, among others.
Fortunately, drawing money out of the Rainy Day Fund for water projects will require a constitutional amendment, meaning voters will have the opportunity to vote against it this November. And Governor Perry has added transportation to the special session agenda, so there is a possibility that this core function will be better funded before the 83rd session ends, although this may mean another raid on the Rainy Day Fund. But Texans should not be fooled by rhetoric describing this budget as a “good conservative budget”. It is many things, but it certainly is not that.