Evan Smith: A big-picture question to begin: What’s the state of state government?
Susan Combs: It’s actually pretty good. Of course, there has been some anxiety about funding. But take the Agriculture Department: We were asked to cut 15 percent and we cut 18 percent, and I don’t think anybody who works for me has any reason to feel anxious. And we didn’t incur new taxes, though I certainly proposed and raised fees. We raised something like $1.5 million in fees for things like pesticide licenses. I did that because the fees hadn’t been raised in five, ten, fifteen years. I don’t view those as taxes; they’re really cost-recovery items for services rendered.
ES: The cynic in me is dying to point out that “cost-recovery items” is an Orwellian euphemism. The reality is that if you say “I’m not raising taxes” but then you raise fees, there’s no material difference to the average person.
SC: I disagree. If you don’t want us to provide the service, fine. But if we’re going to provide it and, by golly, we’re losing our shirt on it, then I don’t think it’s unfair to say, “Hey, let us recover our costs.” That said, higher fees really weren’t what saved the 18 percent of our budget. It was that we just flat decided to restrict things. For example, why should we check eggs when the feds are doing it? Why duplicate?
ES: Are you opposed to new taxes? Because in a number of states with governors as conservative as ours, raising taxes has been the inevitable outcome.
SC: Is it raising taxes, or is it finding new taxees? Let’s say we always taxed homeowners on the basis of the value of their property. That’s a class of taxpayers. Is it raising taxes to shift that burden, with the result being the same net revenue? If the Legislature trades out property taxes for some other form of revenue, it’s a new tax, and it’s a raised tax, but I don’t call that raising taxes.
ES: Do you oppose an increase in the cigarette tax?
SC: No, that would be fine. Nor, by the way, would I be opposed to a sales tax on food sold in vending machines in schools. Billy can go to a 7-Eleven and buy a soft drink and must pay sales tax, but Billy goes to school, buys a soft drink, and pays no sales tax. I don’t see any reason for the discrepancy in vending machines not being taxed if the exact same product is taxed at a 7-Eleven.
ES: Okay, so I’m sitting here as a Republican contributor to a future statewide race in which Susan Combs is running. Another Republican who’s also running says to me, “Well, that Susan Combs is willing to raise sales taxes, cigarette taxes . . .”
SC: And lower taxes somewhere else. I don’t consider myself in support of higher taxes. I do believe that if our state population surges, you have to have more money in the system because you’ve just got more humans to take care of. But when I was in the Legislature, one of the reasons we all were very, very apprehensive about an income tax was that we didn’t trust state government: “Whoops, we’ve got a whole new revenue stream. Let’s go use it.” The appetite to spend is really hard to curb. Our appetite to consume at the state level is hard to manage.
ES: If the issue is “We don’t want to have too much money because then we’ll spend it,” what of the argument that we don’t have enough money to meet our present needs?
SC: That’s true in some areas. In health care, for example. We have so many overweight kids and so many overweight adults; our health-care system is going to be in a world of hurt financially if we don’t do prevention. To me, prevention is the smartest single thing we can do about health-care costs long-term.
ES: Where’s that money going to come from?
SC: Well, I’m going to make the argument that if you don’t do it, you’re going to be really, really sorry. The Department of Health has come out with some data about the cost of obesity to the state of Texas based on the present population of kids. And I’m saying, you know, an ounce of prevention is worth a pound of cure.
ES: But somebody’s got to pay for the ounce.
SC: I think we’re going to have to pay for the ounce or we will be dead broke. It’s that serious.
ES: I assume you’re not looking to tax topless dancers to pay for health care?
SC: If it’s something that the state thinks is important, you need a long-term revenue stream, something that will be reliable to the extent that anything is. It’s hard to imagine that sin taxes are long-term. And, at the very least, you have a public-relations problem. It could be argued that you’re saying, “Gee, I hope these businesses keep going.”
ES: Were you surprised at how the special session on school finance came together—or came apart?
SC: No, because there was never a consensus, and there still isn’t. You really have four players: the governor, the lieutenant governor, the Speaker, and the education community. And the fourth player, whom this is all about, has never been ecstatic about any of the proposals put before them. The numbers that came out did not meet their needs, though there’s room for dispute over what their needs are; I don’t know that the fourth player presented a case that was audible or persuasive. In any case, I hear that they believe their best bet may be to wait and see what the courts do.
ES: You’ve announced, two years before the next election, that you’d like to be the state’s comptroller of public accounts. So let me put you on the spot: With your budgeting hat on, what should we do to solve