Texas "Economic Miracle" Is An Abject Failure

The Texas legislature meets today for it biennial legislative session, and as I posted yesterday, it was expected that they would face a budget shortfall of between $21 and $25 billion.   It turns out that those figures were just wishful thinking -- the actual budget shortfall is more than that.

The Texas Comptroller, Susan Combs, gave her official estimates for the upcoming biennium yesterday and the news was not good.   According to Combs, the amount of money needed to maintain state services at its current levels (and remember, this is after three budget cuts have already been put in place) is about $99 billion.   The amount of income the state can expect is $72.2 billion.   That means the actual budget shortfall is projected to be about $26.8 billion (or 27.1% less than the amount needed to maintain the current pared-down level of services).

This certainly has to be disappointing for those touting the trickle down economic policies of the Republican Party.   More than any other state in the Union, Texas has faithfully followed those policies -- having had a very conservative Republican leadership in both the governor's office and the legislature for many years now.  

Texas doesn't have a state minimum wage law, has no state income tax ( and the taxes it does have are very regressive -- the kind of taxes Republicans love), is extremely corporate-friendly (even going so far as to give companies money and tax breaks to come to Texas), restricts government health insurance to only children and the disable (giving it the highest percentage of uninsured people at over 26%), funds its schools at one of the lowest per-pupil rates in the country (with a nearly 30% high school dropout rate), has some of the strongest anti-union laws in place of any state, ranks very low in median income for citizens and pay for state employees, and has deregulated most utilities (causing electric rates to climb to among the highest in the nation).

In short, Texas has followed the Republican game plan to the letter and it has resulted in a citizenry that is hurting and a government facing a financial disaster -- having one of the largest budget deficits in the country.   Texas was supposed to be the "economic miracle" that showcased the Republican policies.   What it really shows is that the Republican policies are the recipe for economic failure.

Governor Perry is trying to put a good face on this economic disaster saying,   "I don't think it's the end of the world.   I don't think it's apocalyptic."   While it is not the "end of the world", it is as big an economic mess as that faced by any state (including California).

The governor has been bad-mouthing the federal government, and saying that it should be following the economic example of Texas.   Now he must swallow his pride and depend on the federal government to help bail Texas out of the economic mess the Republicans have created.   The federal government is offering Texas about $7 billion in stimulus money, and the governor is going to have to accept that money with his hat in hand.

That will still leave more than a $19 billion shortfall that the governor and the Republican legislature must make up.   I don't think they can do it without raising taxes and robbing the state's "rainy day" fund -- both of which the Republicans assured voters they would not do.   It should be interesting to see what they do now, especially since the voters (in a recent poll) said they didn't want education and human services to be cut -- the two largest areas of the state budget.