This is the ninth of a ten-part series on the 2011 State of the State (SOTS) speeches in states with the ten worst projected relative budget deficits for FY 2012. Budget data is from the Center on Budget and Policy Priorities’ (CBPP) recent budget report, and SOTS speech text is from Stateline. CBPP’s data on states’ FY 2012 budget deficits as a percentage of their FY 2011 budget is the benchmark for relative budget deficits.
According to CBPP, Texas faces the fourth worst relative budget deficit in FY 2012, amounting to 31.5 percent of the state’s FY 2011 budget; and the third highest absolute budget deficit in FY 2012, equal to nearly $13.5 billion.
On February 8, 2011 Texas Governor Rick Perry delivered his SOTS address (full text available here) where he touts the Lone Star State’s recent robust economic growth by citing several indicators that reflect the health of Texas’s economy.
(Note: Gov. Perry explores several topics, including: immigration, border enforcement, human trafficking, the Patient Protection and Affordable Care Act and abortion; these topics are beyond the scope of this SOTS series and will not be discussed here.)
Below are the policy highlights from Gov. Perry’s SOTS address:
- Spending Cuts: Gov. Perry mentions that state agencies were asked to find 5 percent savings in the 2010-11 biennium, 10 percent savings in the 2012-13 biennium, and are being asked to find an additional 2.5 percent savings for FY 2011. Gov. Perry and his staff cut their own agency’s budget by $34.6 million this budget cycle, a roughly 11 percent budget cut. Further, he makes clear he has no interest in emptying the state’s Rainy Day Fund to pay for recurring expenses.
- Tax Increases: He expresses his desire to balance the state’s budget without raising taxes to, “set a nice example for the rest of the nation… [And] keep (Texas) moving forward out of these tough economic times.”
- Economic Development: Gov. Perry highlights the State’s Enterprise Fund and Emerging Technology Fund, citing their effectiveness in attracting tens of thousands of jobs and billions of dollars in capital investment to Texas. Gov. Perry emphasizes the flexible permitting program that has created a predictable regulatory environment, thereby supporting economic development and reducing statewide ozone levels by 27% from 2000-2009.
Government Reform: Gov. Perry praises tort reform as a key effort that fostered over 26,000 applications for medical licenses and the expansion of emergency room physicians into 33 counties for the first time. Expanding on this, first he advocates for a “loser pays” component in the state’s legal system, whereby those who sue and lose are required to pay the court costs and legal expenses of those they sued; second, he notes that Texas is one of a few states that do not have an “early dismissal” option for frivolous lawsuits. In other legal reform, he discusses proposed legislation targeting sex offenders that would “empower prosecutors to seek life without parole for certain repeat sex offender, and requiring active GPS monitoring of high risk offenders for three years after [release].”
Regarding education, he emphasizes accountability-based reform and increased per pupil spending over his tenure. He cites his desire to expand the state’s Virtual School Network, promote completion of high school-equivalent education (by providing employers a $1,500 tax incentive for every employee who earns their high school diploma or GED after receiving two hours of per week with pay to study or go to class) and provide scholarships for education in science, technology, engineering and math. Gov. Perry focuses on higher education, praising Outcomes-Based Funding that would reward undergraduate institutions based on the number of degrees awarded, renewing his call for a four-year tuition freeze and challenging colleges and universities to develop degrees that cost no more than $10,000 (including textbooks). Lastly, he supports a program called “College Credit 4 Heroes” that focuses on transferring military veterans’ technical experience towards college credits when they return to civilian life.
Additionally, he discusses his desire to consolidate agencies when possible and eliminate "non-mission-critical" entities and commissions.
State and local policymakers across the country face significant fiscal challenges in the coming year. Officials in Texas, and elsewhere, need to embrace innovative policies that reduce the cost of public service delivery and maintain (or improve) the quality of public service delivery. Two valuable policy resources are the American Legislative Exchange Council’s (ALEC) State Budget Reform Toolkit and Reason Foundation’s Annual Privatization Report 2010: State Government Privatization section.