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Willisms

« Trivia Tidbit of the Day: Part 920 -- Unions Shrank Again This Year. | WILLisms.com | Trivia Tidbit of the Day: Part 921 -- Congressional Wealth Effect In 2010. »

Trivia Tidbit of the Day: Part 921 -- Even Lean State Governments Can Cut.

Misinformation Running Amok-

Yes, it's true that Texas government spends less per person than any other state. Yes, Texas government is already relatively lean, when you look at left-of-center states.

But Texas is going to be able to trim and cut and slow the future growth of government. And it's not going to be the end of the world.

Take education, the biggest expenditure of Texas state government. Most education funding decisions are conducted at the local level, but the state picks up a giant portion of the tab through a relatively convoluted property tax system.

But-- the children. Won't they all be thrown out into the streets if there are school budget cuts?

No.

And, if you're talking about central Austin, there are several schools where there aren't all that many kids.

Statewide, there's plenty of room to cut:

enrollmentversusexpenditures.gif
In the last decade, total spending rose nearly five times as fast as enrollment (95.3 percent versus 19.7 percent).

Yes, Texas is a fast-growing state, but we're spending a lot more money per student than we did ten years ago, even when adjusting for inflation:

expendituresperpupilversusinflation.gif
Public education can be trimmed. It's not the end of the world. Higher education can, too. And the other big item in the Texas budget-- Medicaid/S-CHIP -- can also be trimmed, slowed, etcetera.

As for the newfound interest of Paul Krugman and other folks in the Texas budget situation, I just really wonder if they'll hang around to their their crow. In 130 days or so, Texas will have a balanced budget, and all the talk of "shortfall" or "deficit" will vaporize. And as for the "Texas covered its shortfall last time with stimulus dollars," Texas was and is a donor state, meaning we send more to Washington than we get back. If there are use-them-or-lose-them stimulus dollars going around, assuming there aren't strings attached (cough, UI) that will force the state to change our programs and/or eventually pay more than we would have otherwise, it would be asinine to not use those funds out of principle.

So when people say that Texas' budget shortfall was conveniently very similar in size to the federal stimulus in 2009, they are getting it exactly wrong. Texas simply balanced its budget with the funds it had on hand. Since Texas basically starts over every two years, and since we have a balanced budget requirement in our state Constitution, spending what what the state has in revenues is just standard operating procedure.

That's how this works. Texas looks at how much money it has to spend, regardless of the source of the money, and it spends no more than that amount. Recently, Texas' expenditures have actually been less than revenues, which is why the state has a $9,000,000,000 Rainy Day Fund "surplus."

As for the absurd notion that Texas relied most heavily on stimulus dollars of all the states, that is just total and complete bunk.

Indeed, Texas is one of just a few states to reject any stimulus dollars whatsoever, Texas accepted the second lowest level of stimulus funds in the nation, per capita, and Texas ranks in the bottom quintile of federal pork flowing into the state.

How is that so hard to understand, and so easy to mangle into some sort of weird argument about hypocrisy or failure?

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

Previous Trivia Tidbit: Unions Lead To Slower Growth.

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Posted by Will Franklin · 25 January 2011 05:58 PM

Comments

Reading around the web, it appears that the state of Texas does have substantial debt. If the budget must be balanced, then why is there debt? I have been unable to find the answer. Perhaps Will Franklin can write about this. Inquiring minds want to know!

Posted by: Dan Morgan at January 29, 2011 12:01 PM

Hey Dan. Cities like Houston, Austin, etc. certainly have a lot of debt. Texas itself has the second lowest debt per capita in the country. Can you point me to any of the things that say Texas has a lot of debt?

One thing Texas and every other state has are hidden unfunded public employee liabilities. Retirement, health care, etc. Texas is one of the healthier states in that regard, but it's still a looming long-term issue that is largely obscured by fuzzy government math.

Posted by: Will Franklin at January 29, 2011 02:36 PM