Willisms
Navigation
Buy WILLisms

XML Feed
rss-icon.gif Feedburner RSS
WILLisms.com on Twitter






Featured Entries

The Babe Theory Of Political Movements.
Mar. 21, 2005 11:50 AM

Iran's Sham Election In Houston.
June 20, 2005 5:36 AM

Yes, Kanye, Bush Does Care.
Oct. 31, 2005 12:41 AM

Health Care vs. Wealth Care.
Nov. 23, 2005 3:28 PM

Americans Voting With Their Feet.
Nov. 30, 2005 1:33 PM

Idea Majorities Do Matter.
May 12, 2006 6:15 PM

Twilight Zone Economics.
Oct. 17, 2006 12:30 AM

The "Shrinking" Middle Class.
Dec. 13, 2006 1:01 PM

From Ashes, GOP Opportunities.
Dec. 18, 2006 6:37 PM

Battle Between Entitlements & Pork.
Dec. 21, 2006 12:31 PM

Let Economic Freedom Reign.
Dec. 22, 2006 10:22 PM

Biggest Health Care Moment In Decades.
July 25, 2007 4:32 PM

Unions Antithetical to Liberty.
May 28, 2008 11:12 PM

Right To Work States Rock.
June 9, 2008 12:25 PM



Donate





Links









Search



Archives

January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005
April 2005
March 2005
February 2005
January 2005
December 2004




Social Security Reform Thursday.
January 29, 2008

Caption Contest Archive
Jan. 21, 2009

The Carnival Of Classiness.
Mar. 14, 2006

Quotational Therapy: Obama.
Apr. 4, 2008

Mainstream Melee: Wolfowitz.
May 19, 2007

Pundit Roundtable: Leaks.
July 9, 2006

A WILLisms.com(ic), by Ken McCracken
July 14, 2006




Credits

Powered by Movable Type 3.17
Site Design by Sekimori




WILLisms.com January 2009 Book of the Month (certified classy):











The WILLisms.com Gift Shop: Support This Site

giftshopbanner.gif











This Week's Carnival of Revolutions: carnivalbutton.gif



Carnival Home Base: homebase.gif

























Willisms

« Trivia Tidbit of the Day: Part 917 -- Low Taxes Attract People, Jobs. | WILLisms.com | Is Hillary Clinton Talking About The Middle East, Or The United States? »

Trivia Tidbit of the Day: Part 918 -- Texas' Budget.

The Texas Model-

Texas Comptroller Susan Combs estimated today that the state's general revenue would be about 72 billion dollars over the next two years. Liberals-- ironically-- are practically giddy right now, because they believe Texas needs to spend a hundred billion over the next two years, and they think the gap proves that Texas is a failure and all of that. Paul Krugman, in particular, has been rubbing his moustache, Snidely Whiplash-style, over the notion that Texas is proving that conservative fiscal policy is a failure. The ultra-liberal CCCP or CPPP or whatever they are called says we need $99 billion over the next two years, therefore there's a 26 point something billion dollar shortfall.

Hold your horses, folks.

As Kevin D. Williamson notes, Texas is not at all broke, and the "shortfall" is just part of what keeps Texas from having actual deficits and debt:

Texas doesn’t do shortfalls. Texas starts from scratch: Every year is basically Year Zero when it comes to the state budget — there is no assumption that next year’s funding will match or exceed this year’s, and the state’s constitution explicitly forbids any legislature to tie the hands of a subsequent legislature, financially or otherwise. When necessary, Texas implements zero-baseline budgets, in order to keep the state living within its means, even if Paul Krugman thinks it beastly.

As I posited earlier today on Twitter:

A good shortfall every now & again is cleansing. Government needs significant downsizing every few years, especially after years of economic boom.

and

The brilliance of Texas: we actually stop growing our government when revenues stall. And CPPP can't dictate perpetually higher spending.

Texas will have "shortfalls" every now and then, based on official revenue estimates and liberal spending wish list estimates, but we're never going to have actual deficits. Eight years ago, Texas faced a 10+ billion dollar "shortfall," but ended up with a huge surplus and a booming economy thereafter in reality.

Here are a few figures to explain what's going on here:

texasspendingtotals.gif

If you look at just government spending without recognizing that Texas has added millions of people and otherwise boomed over the past decade, it has exploded. If you adjust for population growth plus inflation, it's still grown, but at a much more reasonable pace. This graphic above counts state revenues plus federal revenues. Yes, Texas receives gobs of money from the federal government, but we're still-- ultimately-- a donor state, especially in highway funding. Many of these federal dollars are simply paying for federal mandates and state-administered federal programs, like Medicaid.

Texas government has grown over the years, albeit at a reasonable pace, even when adjusted for economic and human growth in our state.

Shouldn't the goal be, though, to hold government's growth to at or below population plus inflation growth? It's an easy thing to talk about, hypothetically, but even conservative legislatures rarely do it.

In Texas, though, a "shortfall" combined with our Constitutional requirement to balance the budget, means that we can actually make cuts. Real cuts. Because we have to. And that's a good thing. That's how it's designed to work.

So let's look at that 72 billion in context. It's somewhere between what we spent in the 2006-2007 biennium and the 2008-2009 biennium:

texasgeneralrevenuespending.gif

It should also be noted that Texas still has a Rainy Day Fund of around $9 billion, but as Williamson notes, we can probably leave it untouched as we trim government:

Texas’s low-B.S. approach has had some salubrious effects, as I’ve documented here and here. It also left Texas with surpluses that allowed the state to put about $10 billion in its rainy-day fund, which could come in handy now that the economy seems to be clouding up a little. Could, but probably won’t: Republicans plan to introduce a budget that comes in within current revenue without touching the rainy-day fund. Get your head around that: There’s a multibillion-dollar pot of cash sitting there in front of politicians who must be just slavering inside at the thought of it, and they aren’t going to touch it — even though they have a pretty good excuse. Imagine a Congress that could do that.

In 141 days, Texas will have made cuts, and I am sure there will be innumerable editorials written about how this is the apocalypse and Texas will fall into the Gulf of Mexico due to these cuts. The children will suffer and the poor will all die of starvation out in the cold. The budget is already to the bone, they will say. Businesses will leave our state and go to California and Michigan. All of that.

But what will happen in reality is that the budget will be trimmed, Texas will have a balanced budget, and the trend line will show that government is still far larger than it was a decade ago, and maybe even a significantly larger than it was a decade ago after adjusting for inflation and population growth.

And the sky will still be in place, unfallen. Texas won't have a deficit. Texas won't borrow its way out of this. Texas will continue attracting businesses and jobs and people faster than any other state. And we'll all live happily ever after.

So take a deep breath. Reach zen, even, if that's your thing. Yes, there is work to be done. Yes, liberals will try to exploit the "deficit" for political gain. You can tune them out without guilt, knowing what you're seeing is not a bug, it's a feature, of the fiscally-responsible, highly successful Texas budget process.

UPDATE: Talmadge Heflin at the Texas Public Policy Foundation says it is simply "false" to say there's a 27 billion dollar shortfall.

ANOTHER UPDATE: More from TPPF on how absurd this "deficit" hysteria really is.



-------------------------------------

Previous Trivia Tidbit: Low Tax States More Successful, Even In Recession.

rss-icon.gif twitter-icon.gif facebook-icon.gif

Posted by Will Franklin · 10 January 2011 01:50 PM

Comments