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Friday, January 11, 2013

Texas Budget Surplus Estimated At $8.8 Billion- A Shining Example Of How Conservative Policies Work

By Susan Duclos

The fact that a few days ago Texas announced it saw a budget surplus of $8.8 billion under the conservative leadership of Governor Rick Perry and the implementation of conservative economic policies,  should have received some attention, but other than a couple very brief mentions in the mainstream media, not many people saw the news or delved too deeply into the meaning of it.

Remember how conservatives continue to say that we don't need to raise taxes, we need new tax payers. In other words, if you put people to work, there are more paying into the tax system and therefore revenues go up without any hikes in rates.

Reuters reports:

The Texas Legislature will have 12.4 percent more revenue to spend in the next two budget years thanks to higher-than-expected tax collections boosted by economic growth, state Comptroller Susan Combs projected on Monday.

"Texas experienced a very strong rebound from a severe recession," said Combs, who issued her biennial revenue estimate a day before the Texas Legislature convenes.

Texas has a two-year budget cycle and lawmakers will craft a 2014-2015 budget during the session, which ends May 27.

Combs forecast revenue of $101.4 billion - which the comptroller says is 12.4 percent greater than corresponding funds available for the current budget cycle - including $8.8 billion expected to remain at the end of the 2012-2013 budget cycle.

The state's general revenue collections are projected to be $96.2 billion, $3.6 billion of which would be set aside for the state's rainy-day fund.

Combs estimated that the rainy-day fund will have $8.1 billion at the end of the current budget cycle and $11.8 billion at the end of the 2014-2015 cycle.

What makes Texas different from states like New York, California and other states that are running massive deficits?

Perry explains at the 11th annual policy orientation sponsored by the influential Texas Public Policy Foundation: (Via Rick Perry's website- speech)

The work done by TPPF is extremely important to our state's ongoing and future success, and you have my appreciation for that.
Two years ago, I spoke to you all under wildly different circumstances, with a revenue estimate in hand that was causing total panic in certain circles.
The job we had to do two years ago was to calm everyone down, assure them the sky was not, in fact, falling, and that the best thing we could do for everybody was figure out how to live within our means and go from there.
That's exactly what we did, we sat down and budgeted, just like any family or business owner, prioritized our wants and needs, and tightened our belts a notch or two.
As a result, we enter this biennium with a thriving economy, a healthy revenue estimate, and an opportunity to set our fiscal house in order and rededicate our state to the same conservative fiscal policies that have served us so well over the past decade.
In fact, the job we have now may be even more difficult than two years ago.
Our job now is to remind people that this good news does not mean we'll be free to spend any amount on anything we want.
We have to make sure everyone understands that if we stray from the path we've crafted for ourselves, other states like Florida and Louisiana are eager to step up and take their shot at the nation's job-creation crown.
When I spoke to the legislature on Tuesday, I made it clear that we have to continue keeping our spending under control.
I also told them that the best thing we can do for our economy, for employers, employees, and our state, is to provide some tax relief.
The last two years tell us that people do the most good when they keep more of their own money, so they can start new businesses, invest in new equipment, hire new employees, and blaze new trails.
Time and again, we've seen that the best use of the people's money is to give it back to them in some form or fashion.

I think that's an important discussion to have.
In fact, I'd like to advance the discussion beyond the Dome, and I invite everyone to go to my website,, and share with us your own thoughts on what's the best way to provide tax relief to Texas.
Now, this being the Internet, some of the ideas will be better than others, but this represents a chance to hear some fresh ideas, and jumpstart a very important conversation on taxes.
Of course, tax relief isn't the only thing we need to address this session.
We need to discuss and find ways to improve our state's infrastructure, in water, energy and transportation.
Texans are an innovative bunch, and I'm sure we can figure out ways to ensure our needs in these critical areas are met, for now and stretching into the future.
We'll also need to figure out the best ways to educate our workforce, to reassure employers that they will continue to be able to find the best people for the job right here in the Lone Star State.
Whether that means passing some higher education reforms to place a greater emphasis on affordability and graduation rate, or streamlining and accelerating the process for people to earn technical certifications.
Combined with infrastructure improvements, these steps are vital if Texas is going to continue to be the nation's epicenter for job creation in the years to come.
And, again, we can have the best workforce, the best infrastructure, but if the economic climate is restrictive to the point that businesses feel they can't succeed here, it just won't matter.
You all here know just how successful we've been at fostering the kind of climate that attracts businesses seeking to expand or relocate.
For the last several months, I've been promoting a series of ideas I call the Texas Budget Compact, a collection of common-sense steps our legislature should take to ensure we continue adhering to the bedrock principles that have gotten us where we are today.
If you haven't heard them yet, they are, practice truth-in-budgeting, support a stricter constitutional limit on spending, make the small business tax exemption permanent, preserve our strong Rainy Day Fund, and cut wasteful and redundant government programs and agencies.
The compact has been designed to keep government honest, as small as possible, and as efficient as it can be in providing essential services like educating our children and caring for those who truly need the help.
By sticking to that formula, we can build an even stronger economy, and help create more, and better, jobs.

I've also called for the legislature to reform our laws to make it harder for people to abuse our public assistance and unemployment insurance systems, by authorizing drug screenings for those programs.
And, of course, we also need to better protect our most vulnerable citizens, the unborn, by expanding the ban on abortion to any baby that can feel the pain of the procedure, and putting in place common-sense oversights on clinics and physicians involved.
With your support and continued input, our conservative principles will continue to guide us over the course of the next 138 days, and set our state's direction for years to come.
Given what we've accomplished so far, I'm very encouraged at our prospects for success.
May God bless you, and, through you, may He continue to bless the great state of Texas.
 New York's unemployment rate dropped to 7.9 percent in November from 8.3 percent a month earlier, while Texas' fell four-tenths of a percentage point to 6.2 percent over the same period, according to the U.S. Bureau of Labor Statistics. (Source- Statesman)

 Instead of punishing success, Texas is known to be business friendly, encouraging companies to relocate to the state to prosper, which in turn has created more jobs and lowered unemployment, hence more revenue collections for the state.

In July 2012, Texas was once again named by CNBC as the top U.S. State for business.

Texas is a shining example of how conservative policies of lower taxes, less regulations, cuts in spending to live within it's means,  and incentives for success, work to create a growing economy with the ability to create a surplus rather than a deficit.

Which brings us to the reason that the mainstream media barely touched on the $8.8 billion budget surplus in Texas.

Texas economic policies are the exact opposite of what Barack Obama is implementing across the country, higher taxes punishing success, massive regulations,  and out-of-control spending.

Which is why Texas is seeing what has been called a "miraculous" recovery, yet the nation is seeing the "feeblest" and "weakest" recovery since the Great Depression. (Source AP, via Yahoo News)