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Economy: Texas’ line in the quicksand

Remember the Alamo?

Wanna buy it?

OK, it's not really for sale. At least not yet.

But someone has messed with Texas. And if something isn't done, they really will be turning out the lights in the Lone Star State.

The Times' Evan Halper reported Monday on Texas' $27-billion budget hole. Apparently its low-tax, less-regulation model isn't working any better than California's high-tax, regulation-heavy model.

Seems to me we're running out of models. Communism, anyone?

Texas hid its problems until now with its own version of the two-step: a two-year budget cycle. So, while last year Republicans trumpeted the state's success versus the mess that Democrat-run California had become, in reality the rot had already set in -- something familiar to homeowners in, say, that garden spot, Houston.  

Oh, and despite Republican cries about government spending, it turns out that last year's shortfall was  papered over by -- federal stimulus dollars!

Speaking of the Alamo, legend has it that its doomed commander, William Travis, called together his  men on the eve of the final assault by Mexican troops, drew a line in the sand and challenged those who wanted to stay and fight to step across.

That decision, of course, got all of them killed.

Texas What is it with Texans and sand?  Lt. Gov. David Dewhurst apparently wants to go Travis one better and kill an entire industry. He cited the cost of millions of dollars to put sand on Texas beaches for tourists as an example of wasteful government spending.

Residents of Corpus Christi, step over this line if you want your town to die!

Luckily for Texas (and unlike California), it has $9 billion in oil tax revenue in a rainy day fund.

Unluckily for Texans, someone forgot to define “rainy day” for state lawmakers.  They say it wouldn’t be responsible to spend that money now.  

They’re apparently waiting for a real emergency. Like when the University of Texas needs to buy a better quarterback.

Gov. Rick Perry has a plan, though. He visits California regularly, seeking to lure businesses to Texas. He was here recently, while his state suffered rolling power blackouts. Which California hasn't suffered since Enron went under.

Anyway, Perry tries to sell companies on Texas' business-friendly climate.

Which is about all he has to sell. 

For, as famed Civil War Gen. Philip Sheridan once said:  "If I owned Texas and hell, I would rent out Texas and live in hell."

ALSO:

Big breaks for Big Oil

A state budget reality check

-- Paul Whitefield

Photo: Texas Lt. Gov. David Dewhurst. Credit: Eric Gay / Associated Press

 

Comments () | Archives (16)

The comments to this entry are closed.

Mark

This article is even pettier than how it tries to portray Texas. Yes, Texas has its issues, and yes, they should use some of that rainy day fund, but the benefits of low taxation are just now starting to get rolling. In the last month, 3 separate billion dollar companies have announced relocations to Texas (including two from CA). That is revenue that will show up on their books down the road while evaporating from CAs. It's not pretty for anyone right now, but its only getting worse for us in California. Also, your condescension really does take away from your points.

Rob

Communism? Really, Mr. Whitfield. Why so much despair that you have to knock not only another sovereign state but the economic foundation that propelled America to its greatest heights? Is it criticism or envy that you offer Texans? I believe Texans hold a better hand, here, for future prospects, so it must be the latter. If it is criticism, then save it for the free-wheel spending, corporate restriction, regulation heavy politicians that got California in the hole it's in. Times and articles such as yours beg for some of that Reagan optimism and belief in self-reliant California and America. Reagan-a man, Governor and President you in the Press criticize, but whom we should all now envy.

matt

At the very least, Texas has a rainy day fund. The last time I recall California having one was perhaps 30 years ago.

If the tone were not so nasty, I might be more inclined to believe the numbers cited. The is a hatred present that supposedly exists only with right wingers, which you obviously not.

Can't we have more civility, as our president requested a few weeks ago?

robert

This stuff is silly and mainly based upon ignorance. Texas has not liability for any spending in the next budget, not even for retiree healthcare. Texas expects there to be less money for the next two-year budget and thus will spend less. Why is that so hard to understand?

K mills

This is exactly the kind of article that I would expect from a far left liberal publication like the NY Times....For your information...Texas is just fine. The budget will balanced by cutting back on state spending, and the taxes will not be raised. Texas continues to attract new corporations every day (just two new ones announced over the week end). Texas continues to create new jobs. There are new construction projects all over the place and I even see construction of new residential dwellings. The unemployment rate continues to outstrip the country. Go ahead LATimes, take those exaggerations, half truths, and lies and stretch them a little further. Your readers should look at information that does not say LA Times on the front....otherwise they will live in a world of stupidity with the grand Dragon being the LAT. Shame on You for abondoning your public responsibility to tell the truth.

DB

Mark, if you want to hear condescension listen to Texans, like Governer Perry, when they talk about California.

I grew up in California and I live in Texas now. There are great things about both states and awful things about both states, if that's what you want to dwell on.

There are many, many Texans who hate California with a passion. I'm tired of listening to it. Californians, from what I've seen, don't really care enough about Texas to hate it. They poke a little fun at Texas and that's about it.

Mylo Wagner

"You probably despise me don't you?" Texas to California

"If I thought of you at all, I probably would." California to Texas.

tip of the hat to Casa Blanka

Donald from Hawaii

Mark, the primary result of Texas's low taxation rate is its $27 billion shortfall. Gov. Perry's 2010 campaign for re-election hinged in large part on what great fiscal shape the state was supposed in. That, of course, turned out to be a bunch of bull hooey.

And for all the GOP's demonization of federal stimulus spending, I failed to note any GOP governors, save for one, who turned it down when offered. The one who did reject those federal dollars was Alaska Gov. Sarah Palin, and the GOP-led state legislature quickly overrode her veto and dismissed her objections.

You best realize that we are facing some serious fiscal problems in this country that are structural in nature, and not transitory as you wishfully suggest. The solutions will require every one of us to make some personal sacrifice for the greater good. In that regard, your willful adherence to long-since-discredited supply-side economic policy serves you ill, and in all fairness, really does nothing to advance the public dialogue toward anything approaching a meaningful discussion.

Aaron Figs

Texas might have its downs but who doesn't??
Amarillo Texas s where I reside and I've got to say, our "rainy day fund" doesn't even need to be used.
How about people that aren't from Texas, keep there opinions, and "facts" to themselves.
We are stubborn and I'm not afraid to admit it because we get what we want.
Texas made son!

Moses

It may be pertinent to note that Texas does not tax her residents' income, and relies on other forms of taxation, such as sales tax to generate revenue. As consumption has decreased over the last few years, due to economic conditions, the funds available for the state are projected to be considerably lower than the last biennium, thus the so-called budget "hole" so callously alluded to in the article. Since the budget for the next two years is yet to be made, there exists no actual "hole", merely a lower target number for the legislature to hit, thus necessitating drastic and much needed cuts in government spending and programs. Mentioning Dewhurst's disdain for spending Texans' money on sand is evidence enough of the author's fundamental difference of philosophy that shows the distinction between Texans and Californians. Though many in states where the daily lives of citizens are so intertwined with that of the government worry that the sky is falling any time spending cuts are suggested, many in Texas view this as bitter medicine. It won't be pleasant at first, but we all will be better for it, and thankful we took it.

Pro Libertas, Pro Texana!

Michael

Those in glass houses...oh who am I kidding. Expecting anything better from a far left liberal is stupidity on my part.

You're estimation of a 27 billion shortfall is inaccurate. We're looking more at 11 to 15 billion shortfall, or about 6 billion per year for the next two years. (Our budget is every two years) What no one is talking about is how a very large chunk of that 11 billion (8 billion to be exact) is the result of changes to Medicaid that occurred as a result of Obamacare. That 8 billion is what Texas owes out of pocket, not what the Feds are going to reimburse. It's possible in a few decades to see Medicaid expenses eclipsing state income.

The only problem we have here in Texas is the Federal gov't.

IT

Number of California cities that made Forbes top 20 most miserable places in the US: 8
Number of Texas cities that made Forbes top 20 most miserable places in the US: 0

Stay sunny California!

jack

Texas is the fastest growing state in the USA.
5 million people have moved there since 2000, which is the most (by far) of any state. They've created more jobs last year than all other 49 states, combined.

Evidently, Americans see Texas as the best place to live & do business.
Our unemployment rate is much lower than California's.

We have 3 of the top 9 (and 5 of the top 17) largest cities in America.

Dallas- Fort Worth, the 4th largest metro area in the nation, is also the fastest growing area in the United States, and has more Fortune 500 companies than any other metro area.
Houston has the most in its city limits. Austin is becoming the city of the 21st century, with extremely high population and business growth.
Not to mention low taxes, and low regulations.

There's a reason why major companies are Leaving California and moving to Texas.

California's economy is becoming more and more of a bust, while Texas boasts one of the best in the nation.
Can you move this article from the "opinion" section into the "liberal bias & falsities" section? I know the New York Times has it... it's their entire paper.
I'm a moderate by the way.

If people were moving from Texas to California, rather than the other way around, then maybe you will have a point. I love California, but I would never move there for business opportunities.

Kelly in Houston

I live in Houston and am a social worker in the developmental disabilities service field. I can tell you that our families here in TX with special needs children ENVY the level of service CA provides. I am no expert on CA gov't, however, so I can't really comment on what you all are experiencing in your statehouse.

I CAN comment on what's going on with Texas' budget though! We ARE facing a $27 billion budget shortfall for 2012-13, that figure is based on maintaining current service levels, and allowing for the projected increase in population (not on new money for new programs). First off, let me say that I love my city and it's a great place to live. But those Texans who have their heads in the sand about the already thread-bare social safety net are fooling themselves into thinking that this state is a paradise for all - heck, I don't need community mental health or disability services and I send my kids to private school so what do I care? There are way too many points to make in one post, so I'll just stick to my own area of expertise and y'all can extrapolate that out to the cuts in education, pub utilities, TQEC, etc.

The Dept. of Aging and Disability Services (DADS) falls under Health and Human Services in Texas. For individuals with disabilities, DADS is the agency that provides state support (money) for stuff like home health care, various therapies, case management and residential care (this becomes a pretty big issue when mom and dad get too old to care for their disabled adult child). Disabled adults receive these services through various Medicaid "waiver" programs or through state entitlements. TODAY, the average number of YEARS a person has to wait on the "interest list" for a waiver slot is 8-9 yrs (in Houston, anyway). So, as a parent, you need to be pretty darned informed and on the ball when your kid is still in middle school if you want them to start receiving services when they reach adulthood. The wait times are only one example of how overburdened our disabilty service system ALREADY IS.

I was reading the Guv's official budget tables today, and he is proposing allotting a little over half of what DADS requested for the 2012-13 budget. BTW, DADS (like practically all other state agency) only asked for the amount of $ it would take to cover the increase in population, no new monies were requested. So where do those cuts come from? We don't know, the Guv's budget didn't specify... But honestly I don't see how much "leaner" the system can get! 10% cuts to Medicaid reimbursement rates? Awesome, less doctors and providers will accept Medicaid clients - the vast majority being people with disabilities, er, "pre-existing conditions."

I read a few comments re: the Rainy Day Fund. People like me who recognize the pitfalls in this budget are advocating using the RDF to take some of the pressure off service cuts. But Perry, Dewhurst, and the Republican-dominated Lege has vowed not to touch it... So, what good is a RDF if we can't use it? And when exactly is it raining outside??

Our problem in TX is that we just don't have enough REVENUE coming IN to support our population! We have no income tax, a relatively low sales tax, no increase in gas tax in forever, and - oh yeah - one of the highest property tax rates in the country... The Lege pushed through a property tax cut back in 2006 that was never paid for. And what about casinos? Dens of debauchery! No dice!! Without a politically viable method of increasing revenue, we're left with draconian and short-sighted spending cuts that do nothing but widen the gap between the haves and the have-nots. And we're not just talking about the "poor" here - you know, those free-loading welfare types that loaf around all day feeding off the gov't teet - these cuts affect major swaths of the state's population... middle class and even upper middle class Texans rely on DADS, for example.

So, there is a whole lot of information about Texas social services and how they're affected by the budget process. I've never lived in CA and I am not saying that there are no problems there - I assume there MUST be if the state budget is in crisis. BUT, I am sick to death of my fellow Texans repeating the notion that all is fine and dandy in the state... I suppose it is, as long as you do not attend public schools, need college financial aid, are disabled or have a disabled family member, are old, work a lower-wage job that doesn't provide health insurance for your kids, or are a doctor or hospital getting the crap kicked out of your indigent care costs.

I love our state and my city, Houston, and I want us to thrive! Severely neglecting the most basic needs of our children, elderly, the disabled, and the most vulnerable is not the way to do it.

Kelly in Houston

I live in Houston and am a social worker in the developmental disabilities service field. I can tell you that our families here in TX with special needs children ENVY the level of service CA provides. I am no expert on CA gov't, however, so I can't really comment on what you all are experiencing in your statehouse.

I CAN comment on what's going on with Texas' budget though! We ARE facing a $27 billion budget shortfall for 2012-13, that figure is based on maintaining current service levels, and allowing for the projected increase in population (not on new money for new programs). First off, let me say that I love my city and it's a great place to live. But those Texans who have their heads in the sand about the already thread-bare social safety net are fooling themselves into thinking that this state is a paradise for all - heck, I don't need community mental health or disability services and I send my kids to private school so what do I care? There are way too many points to make in one post, so I'll just stick to my own area of expertise and y'all can extrapolate that out to the cuts in education, pub utilities, TQEC, etc.

The Dept. of Aging and Disability Services (DADS) falls under Health and Human Services in Texas. For individuals with disabilities, DADS is the agency that provides state support (money) for stuff like home health care, various therapies, case management and residential care (this becomes a pretty big issue when mom and dad get too old to care for their disabled adult child). Disabled adults receive these services through various Medicaid "waiver" programs or through state entitlements. TODAY, the average number of YEARS a person has to wait on the "interest list" for a waiver slot is 8-9 yrs (in Houston, anyway). So, as a parent, you need to be pretty darned informed and on the ball when your kid is still in middle school if you want them to start receiving services when they reach adulthood. The wait times are only one example of how overburdened our disabilty service system ALREADY IS.

I was reading the Guv's official budget tables today, and he is proposing allotting a little over half of what DADS requested for the 2012-13 budget. BTW, DADS (like practically all other state agency) only asked for the amount of $ it would take to cover the increase in population, no new monies were requested. So where do those cuts come from? We don't know, the Guv's budget didn't specify... But honestly I don't see how much "leaner" the system can get! 10% cuts to Medicaid reimbursement rates? Awesome, less doctors and providers will accept Medicaid clients - the vast majority being people with disabilities, er, "pre-existing conditions."

I read a few comments re: the Rainy Day Fund. People like me who recognize the pitfalls in this budget are advocating using the RDF to take some of the pressure off service cuts. But Perry, Dewhurst, and the Republican-dominated Lege has vowed not to touch it... So, what good is a RDF if we can't use it? And when exactly is it raining outside??

Our problem in TX is that we just don't have enough REVENUE coming IN to support our population! We have no income tax, a relatively low sales tax, no increase in gas tax in forever, and - oh yeah - one of the highest property tax rates in the country... The Lege pushed through a property tax cut back in 2006 that was never paid for. And what about casinos? Dens of debauchery! No dice!! Without a politically viable method of increasing revenue, we're left with draconian and short-sighted spending cuts that do nothing but widen the gap between the haves and the have-nots. And we're not just talking about the "poor" here - you know, those free-loading welfare types that loaf around all day feeding off the gov't teet - these cuts affect major swaths of the state's population... middle class and even upper middle class Texans rely on DADS, for example.

So, there is a whole lot of information about Texas social services and how they're affected by the budget process. I've never lived in CA and I am not saying that there are no problems there - I assume there MUST be if the state budget is in crisis. BUT, I am sick to death of my fellow Texans repeating the notion that all is fine and dandy in the state... I suppose it is, as long as you do not attend public schools, need college financial aid, are disabled or have a disabled family member, are old, work a lower-wage job that doesn't provide health insurance for your kids, or are a doctor or hospital getting the crap kicked out of your indigent care costs.

I love our state and my city, Houston, and I want us to thrive! Severely neglecting the most basic needs of our children, elderly, the disabled, and the most vulnerable is not the way to do it.

Dave Whitefield

@Aaron Figs

"How about people that aren't from Texas, keep there opinions, and "facts" to themselves.
We are stubborn and I'm not afraid to admit it because we get what we want.
Texas made son!"

Well, son, seems you might not know as much about my brother and his family as you think. So let me elucidate for you.

Turns out, our dad was born and raised in Texas, as were all five of us. Well, to be honest, we were all born there, all had some "raisin' up" there, but also received a pretty liberal education by moving around all over the country when we were growing up.

This was a good while back, but when I was in school in Texas (grades 1, 3, 4 and 6th through sophomore year in high school), Texas was a pretty progressive state. We had great public schools back then. My how things change.

Dad was a lifelong Democrat. Being fortunate enough to have good educations, my siblings and I all turned out the same way.

Mom and dad were both WWII veterans, and were lucky enough to be able retire near dad's boyhood home, and live there until they died. Having visited a number of times after mom and dad retired, I am reminded of one of my mom's favorite sayings about Texas: "... it looks a lot better from a distance..."

I would agree with one element of your post... our dad was one of the most stubborn individuals I've ever run across. He remained a stubborn progressive to the day he died.

As to "getting what you want" I wish you luck with that... sometimes you have to be careful what you wish for. The chickens will come home to roost sooner or later.

Regards, and good luck.


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