A Letter From Comptroller Carole Keeton Strayhorn to Governor Rick Perry regarding the Perry Tax Plan in 2006 is prophetic and frighteningly accurate. Where we are financially in Texas in large part due to poor financial decision making on the part of the Texas Legislature and Governor Rick Perry. Carole Strayhorn knew the direction we were headed in 2006. This was a critical year for our overall state budget and for education funding.
In 2006 the legislature, prodded by Gov. Rick Perry, forced school districts to cut local school taxes and promised to replace the lost school revenue with proceeds of a new state business tax. That business tax has never produced the revenue needed, and the state now has a structural shortfall of $5 billion a year as a result.
May 15, 2006
The Honorable Rick Perry
Governor, State of Texas
Capitol Building, Room 2S.1
Austin, Texas 78701
Dear Governor Perry:
The Legislature is concluding its work on your tax plan. Your plan is fiscally irresponsible -- it includes an unconstitutional income tax on partnerships and unincorporated associations, the largest tax increase in Texas history and leaves the largest hot check in Texas history. What you should do is show true leadership and veto this legislation.
As the state's chief fiscal officer, it is my responsibility to spell out exactly what the Perry Tax Plan means to our state's fiscal integrity. As you have known since it was made public, your plan simply does not pay for itself. As of this moment, this legislation is a staggering $23 billion short of the funds needed to pay for the promised property tax cuts over the next five years.
In 2007, your plan is $3.4 billion short; in 2008 it is $4.3 billion short; in 2009 it is $5.4 billion short; in 2010 it is $4.9 billion short; and in 2011 it is $5 billion short. These are conservative estimates.
At best, your plan is a prelude to another huge tax bill in the next regular session, one that will not only be heaped on Texas businesses but will fall heavily on the same taxpayers you claim to be helping now.
At worst, it will relegate Texans to Draconian cuts in critical areas like education and health care for at least a generation. This is not a victory for taxpayers. It is a sham, and Texans will see it for what it is.
There is no economic miracle that will close the gap your plan creates. Even if every single dollar of the current $8.2 billion surplus was poured into the plan, it would not cover the plan's costs for more than two years, 2007 and 2008. The gap is going to continue to grow, year by year.
There are only two ways to close a chasm of that magnitude -- future tax increases that you are hiding from Texans now or massive cuts in essential state services -- like public education -- already devastated by your past fiscal indifference...
Read the entire letter here...
Governor Rick Perry told us in the last election that our budget was balanced and that Texas was "open for business". But at what cost?
SCRIPT:
Announcer: “Texas. Open for business.”
Rick Perry: “We’ve created more than 850,000 jobs, more than all the other states combined.”
Text on screen: “By any measure, Texas tops nation in job creation” – Houston Chronicle, Aug. 24, 2010.
Rick Perry: “We’ve cut taxes for small business, balanced our budgets, and set aside $8 billion for a rainy day.”
Text on screen: “Texas job growth tops nation for the decade” – Austin Business Journal, Jan. 26, 2010.
Rick Perry: “Limiting government lets our families keep more of what they earn and encourages more Texas jobs.”
Rick Perry: “It’s no wonder Texas is home to more Fortune 1000 companies than any other state.”
Text on screen: “If you’re looking for economic opportunity, go to Texas” – Forbes, June 25, 2010.
Announcer: “Securing our future. Governor Rick Perry.”
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