SocraticGadfly: Did the Texas GOP knowingly cause the budget shortfall?

January 20, 2011

Did the Texas GOP knowingly cause the budget shortfall?

The answer is quite arguably, yes, a majority of the current $27 billion Texas budget shortfall has a deliberate cause.

It all stems from the revisions of the business/franchise tax that came in "under estimates." Frankly, I think when the tax was being revised, the Texas GOP knew it was going to lower revenues, and that's what it wanted.

In any case, it was warned.
To understand how this happened, you have to go back to 2006, when Texas lawmakers passed a massive tax reform plan. The goal was to cut property taxes without costing the state any money. Perry designed a “tax swap” that would reduce property taxes and replace the lost revenue with a new business tax.

There was one major flaw with this plan — it didn’t balance. Property taxes were cut by $14 billion annually. But the new business tax brought in only $9 billion a year in new money. As a result, the tax-swap plan has burned a $5 billion hole in the budget every year since. (In 2007, a booming economy helped mask the problem, and in the 2009 session, lawmakers used $12 billion in federal stimulus money to fill the gap.)
The imbalance was well known. The Texas comptroller’s office warned Perry in 2006 that his plan didn’t pay for itself. The comptroller’s office estimated the plan would result in a five-year deficit of $23 billion. Perry and other legislative leaders ignored those warnings. Some Democrats in Austin suspect that G.O.P. leaders intentionally created this structural deficit as a way tamp down state spending. And some Republican leaders and conservative activist groups have made statements in recent weeks that expressed downright giddiness at the prospect of deep cuts in state spending. Lieut. Gov. David Dewhurst referred to the budget gap in his inaugural speech on Jan. 18 as an “opportunity.”

Whatever the reason for the structural deficit, the bill is now coming due. The 2006 tax swap has resulted in a shortfall of at least $20.9 billion the past two budget cycles, according to an analysis by the Center for Public Policy Priorities, a left-leaning Austin think tank.

Dewhurst's statement (shock me, really) is a bit of proof in the pudding.

An "opportunity" for WHAT? Budget antics like we have now? You're damn skippy.

As CNN puts it, even budget deficits are bigger in Texas. So are the budget lies.

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