Ending the Texas Deficit

You may have heard that the state of Texas has a shortfall in the State budget. The deficit is estimated at $18 Billion. If you hadn’t heard, here is a good summary of the budget deficit and how Texans found out about it. Of course liberals say this proves that Texas’s conservative fiscal policies got them into trouble. Obviously, the cause of the deficit is not conservative policies but the recession. And it will be the conservative policies that save us in the end.

This past week Texas Public Policy Foundation presented their solutions to the House. You can read the actual testimony given to the House Select Committee on Fiscal Stability in this pdf. These ideas are fiscally conservative and also logical. Here are some of the ideas discussed:

  • Adopt a zero-based budgeting process (instead of cutting costs, starting blank and then adding the necessary costs, the most radical of all the suggested ideas and one that has proven to be effective)
  • Eliminate and consolidate unnecessary agencies/programs
  • Prevent tax increases
  • Minimal and predictable regulation
  • Case Study of Texas v. California
  • 10 year economic statistics
  • Adopting a sustainable debt policy
  • Greater government transparency

Other ideas:

  • Greater competition in government contract bidding
  • Allowing the Workforce Commission to issue bonds
  • Taking advantage of the zero-interest loans provided to states with good credit by the federal government

Despite the shortfall in the budget, Texas still has one of the best economies in the nation. Rhetoric on the left tends to accuse Texas of disproving its own taxation choices (no income tax, refusing to raise property taxes and so on). But Texas still has one of the lowest unemployment rates and best real estate markets comparatively. Also this is our first year with a deficit since 2003, having kept a balanced budget the last seven years, not something most states can boast. So while We have a budget shortfall almost as high as California, we have still managed to stay balanced and effective until the recession, and therefore the reduced spending due to the economy forced us to re-evaluate our state spending.

Democrats have used the budget to push the agenda of gubernatorial candidate Bill White. Perry has promised not to raise taxes to cover the shortfall. He has also suggested ten percent cuts across the board. (White reacted to these cuts less than favorably, calling it Soviet Style budget management.) Some of Perry’s criticism goes far all the way back to his refusal stimulus money. This money, the opposition argues, could have stopped the deficit and provided unemployment assistance to Texans. An article by James Quintero, fiscal analyst at the formerly mentioned Texas Public Policy Foundation, on the Americans for Tax Reform website details what extra demands those federal dollars and details some more fiscally responsibly solutions to the deficit.

While the budget deficit in Texas certainly causes concern, this is not a problem we cannot solve. Using the suggested zero-based budgeting procedures, consolidating and eliminating unnecessary expenditures and allows more competition in state contracts we could easily make the cuts that would keep our budget balanced. Any of all of the solutions bullet-pointed above can make the difference. Government needs regular review, duplications, over-spending and unevaluated programs constantly clog the system. A lean, effective government that does not burden its people is the best hope for recovering in our current economy.