State Fiscal Policy
Texas Democrats believe restoring responsible and accountable state budget policy is necessary to establish trust between taxpayers and elected officials in Austin. Earning that trust requires leaders who will put aside partisan agendas to engage in an honest debate and evaluation of the challenges facing Texans today and in the future.
Instead of fiscal responsibility, Governor Perry and the Republicans in charge have pursued a shortsighted political agenda that has created a looming $18 billion state deficit. That deficit is due in large part to a 2006 Perry-Republican plan that comes in $4.5 billion in the red every year, according to the Legislative Budget Board.
Perry’s “structural budget deficit” is a direct result of his “leadership deficit.” With every passing month, the budget shortfall grows while the Governor dawdles, casually referring to it as “a number someone pulled from the sky” that he will deal with “next year.” Meanwhile, hard working Texans who tackle real challenges every day deserve responsible state leaders who will work day and night to solve this finance crisis, get the most out of every tax dollar, and avoid slashing critical state services or enacting any new fees or so-called “revenue enhancements” unless absolutely necessary.
For almost a decade, Texans have paid the price as Perry’s out-of-balance priorities shortchange our quality of life while rewarding his cronies and contributors. The burden of Perry “taxes” falls squarely on the backs of hard working Texans. College students and their parents have been “taxed” with tuition that has doubled on some campuses. Thousands of small businesses have been burdened with new and higher taxes and a wide array of new user fees have been instituted.
Homeowners and small businesses were promised property tax relief, but the Republican version of “tax relief” primarily rewarded multi-national companies, Wall Street investment firms, and favored industries like insurance and oil and gas with big tax breaks at our expense. Fortunately, Democratic legislators defeated Republican efforts to raise the Texas sales tax to the highest in the nation.
Adding insult to injury, we Texans aren’t getting our money’s worth when we pay these “Perry taxes.” Our children’s schools have been shortchanged, forcing hundreds of local school districts to ask voters to approve local property tax increases, lay off teachers, and cut back course offerings. Traffic congestion is taking a toll. Texas has an embarrassingly poor record on children’s health insurance and teen pregnancy. Scandal and abuse plague state agencies charged with protecting and rehabilitating children.
Yet Perry has rewarded businesses with connections to his contributors, cronies and special interests with hundreds of millions in grants from his “Texas Enterprise Fund.” And he has fought efforts to require an independent audit of the Fund, despite evidence many of the grant recipients have not created jobs and economic benefits required by their contracts. And if that isn’t enough, special interest tax breaks for companies like Valero threaten to take billions off the property rolls, which could shift an even greater local and school tax burden to homeowners and small businesses.
Dishonesty and hypocrisy in the budget process have also cost Texans dearly. Texans pay over $500 million in fees on electric bills that are dedicated to assisting elderly, disabled and low-income families without heat and air conditioning, but Republicans diverted that money to pay for other things. Billions in park fees, hunting and fishing licenses, environmental permits, and 911 telephone fees are also being used for other purposes.
Hypocrisy also carries a big price tag. At the same time Perry railed against Washington to attract votes from secessionists and tea partiers, he and his fellow Republicans used as much as $22 billion in federal stimulus funding to balance the state budget. Yet Perry picked one stimulus program to “oppose” for political purposes, refusing additional federal Unemployment Insurance Funds, a move called “insane” by a Republican State Senator. The price: the state had to issue costly bonds and raise taxes on small businesses to make up the difference.
Texans deserve better. Texas Democrats support policies to restore responsible state fiscal policy, including:
- Reform the Republican “margins tax” policy to provide fairness to all economic sectors, especially small businesses.
- Structure property tax relief to benefit all homeowners fairly;
- Extend the benefits of property tax relief to renters when landlords receive the full benefit of those reductions;
- Claim our federal tax dollars before they are sent to other states by securing available federal funds to help alleviate the budget deficit and provide economic benefits and job opportunities here in Texas;
- Enact a constitutional amendment to prevent extending the sales tax to food and medicine and oppose efforts to impose a national sales tax.
- Require state government to spend taxes and fees for the specific purposes for which they were collected.
- Adopt strict guidelines to require that procurement contracts with private entities and programs that provide tax-funded incentives to business must target, when possible, small businesses, and prohibit giving such awards to companies that export jobs or utilize tax loopholes to avoid state or federal taxes.
- Require an independent audit of the Governor’s Texas Enterprise Fund and enact and enforce regulations to prevent the continued use of the Fund as a corporate slush fund that rewards businesses owned by political cronies and contributors, despite their failure to meet hiring targets and other program requirements.
Democrats support these changes because taxpayers deserve responsible management of hard earned dollars that should be spent wisely to help Texans secure a prosperous future.