Jobs and the Economy
Jobs and the Economy
Going to hell in a slower handbasket is no longer an option
Our current governor has told us – over and over again – that he deserves re-election because our Texas economy is in such good shape. But is this true? If the national recession (or depression) has not hit us as hard as the rest of the nation, is it because of or in spite of the politicians holding Texas office?
To those of you who answered “in spite of,” give yourself a gold star. During his decade-long reign, our governor has squandered much of the product of our hard work in order to satisfy his business associates. We cannot stand idly by as these interests broker our future, or we will be left with a California-style mess to clean up after our governor has “moseyed on down the road” to Washington, D.C. or whatever his next engagement turns out to be.
That our Texas economy is in better condition than many other states is no reason for celebration. Such comparisons mean little to those out of a job or struggling to keep their small business running or to keep their home.
And we may not even be able to make the claim of comparative well-being for long. Here are some examples of what is happening.
Our state official project a budget shortfall of 18 billion dollars! Of course, we all know that if they are predicting red ink of $18,000,000,000 (yes, that’s billions with a “B”), the true figure will likely be much, much worse.
The federal Labor Department reports that initial jobless claims in Texas for the week ending March 27th showed the largest increase in the country. Our April 2010 unemployment rate of 8.3% -- the highest this century -- is nothing to brag about and likely to go much higher. Our state unemployment fund is empty.
Sales tax revenues are $1,000,000,000 behind projections – yes, that “B” word again. According to a Rasmussen poll in April, a whopping 46% of Texans think that our economy is getting worse, up from 35% as recently as January.
Our governor tells us that he is responsible for thousands of jobs (it is unclear whether he is talking about saved or created jobs). Again, this is deceptive, as over the last two years, there has only been an increase in government jobs. It is easy to look like a financial genius using other people’s money, especially taxpayer money.
Texas has had a good economy due to the industrious and savvy Texas people and our relatively low tax and regulatory burden. In other words, our prosperity is tied to what our government has not done to us, not what our government has done for us.
If we do not get our financial house in order, what is happening to California and other states will happen to us -- and not that far in the future. Our tax burden -- ruinous property taxes on our homes and businesses and the franchise tax which acts as a personal income tax on many small businesses -- is poisoning the business climate in Texas. The increase in franchise taxes under Rick Perry’s tenure is a real job killer.
Cronyism is not free markets
No one should confuse Rick Perry’s cronyism with a reverence for the free market. His Enterprise Fund of taxpayer money is little more than a slush fund to line the pockets of the politically well-connected.
His proposed Trans-Texas Corridor is nothing more than a land grab using the power of eminent domain to build toll roads Texans do not want which would be owned and controlled by private, even foreign, powers.
And the Texas Film Commission has reportedly in the process of subsidizing some really bad films.
We can’t afford it!
When the economy is hurting, that is the very time that individuals and business are in the greatest need of tax relief. We simply cannot afford these high taxes anymore.
My plan is to eliminate the school property tax and replace it with -- nothing. And to repeal the franchise tax. The economic boom this would create as individuals and businesses relocate to our tax haven from tax hellholes would be wonderful to behold.
But that is just part of the equation. Texas must cut spending. And not just a little -- a lot. During these hard times, cuts in spending must be especially large to align with reduced tax collections as well as the drastic tax relief that we need.
Whatever the merits of various sacred cows in Texas government may have been in the past, the simple fact is that WE CAN’T AFFORD IT! We’re broke, or soon will be.
The tepid response of our elected officials to this looming budget crisis is to ask state agencies to identify 10% in possible cuts, which as expected produced an avalanche of protests that their programs couldn’t possibly be touched. But even a 10% reduction in spending is chicken feed. We have to cut and cut deep, using not a scalpel but a machete.
Just two items – education and Medicaid – make up over 50% of our budget. 50% on just two items!!! My plan is to reduce spending on education to the minimum required by our Texas constitution and commensurate with a traditional education as was provided in years past -- dedicated to student education as opposed to babysitting or indoctrination.
And my plan for state spending on Medicaid is to eliminate it. Medicaid was bankrupting us before the recent federal health care legislation, but Obamacare has increased the cost of Medicaid to far beyond what we could ever hope to afford. We have no alternative but to eliminate it.
The silver lining
The silver lining in this dark cloud is that we must critically examine every state expenditure and prioritize what we spend money on – just like so many families are having to do. I am confident that we will find many things that should never have been done at all, while others should be done in a very different way and at lower cost. In the end, we will be the better for it, with a vastly leaner state government and more prosperous and business-friendly environment.
So, let’s get started.