"Deaf, dumb, and blind"
Wed September 15, 2010 4:58 pm

Here's what I really would like to know about Rick Perry: Does he really believe what he said (to the Chronicle's Peggy Fikac) about the reason for the looming budget crunch? ("You have to be deaf, dumb and blind not to understand that we have a major financial crisis on our hands ... thanks mostly to an administration and a Congress that has been out of control in their spending.") Or does he just think that he can get away with saying any old thing? The problem with blaming Congress, of course, is that Perry accepted $12 billion in stimulus funds in 2009 from that same out-of-control Congress. That money was very useful to him. It allowed him to brag about Texas's sound fiscal condition as he entered a bitter Republican primary race against Kay Bailey Hutchison. It allowed him to to avoid headlines about a fiscal crisis and budget cuts for Texas schools, public hospitals, and health care providers, including doctors. Instead, those budget cuts will come this year, after the election, instead of before it.

Don't get me wrong. Perry did the right thing. Had he not taken the money, we would have hit the fiscal wall two years ago. Like all politicians, Perry wants to have his cake and eat it too. He wants to criticize Congress for its spending, but he also wants to be able to say that Texas is better off than any other state. The $12 billion in stimulus money gave him that opportunity.

What Perry doesn't want to talk about is the real reason why Texas has a budget crisis. I wrote about the fiscal future of the state in the last section of my story about cutting $18 billion from the budget in the October issue of Texas Monthly:

"The cuts," [I wrote, anticipating the decisions that will have to be made in the 2011 legislative session] "may balance the budget, but they will cost us dearly. The state's ability to educate its schoolchildren, to take care of its needy families, to build the roads that make commerce flow, has been severely curtailed. If this were a onetime occurence, Texans could look to the future with considerable optimism. But it isn't, and we can't. Because of decisions that the state's leaders made several years ago, budget crises will be a permanent part of state government. In 2006 the Legislature cut school property taxes by one-third, reaping great political benefits in the process, but its attempt to raise new revenue (to make up for the property tax cuts) fell far short of projections. This underperformance has created what state finance experts describe as a structural deficit, an ongoing inability to generate enough revenue to pay for the current level of state services. Governor Perry and other state leaders, have evidenced no concern about the structural deficit. Indeed, they promptly made it worse by reducing the revenue from the flawed business tax, notwithstanding the structural deficit and the additional shortfall they were creating. Their fiscal policy is (1) never raise taxes and (2) pray for a boom. The structural deficit is the elephant in the living room of state government, and it may squash us all.

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