Rick Perry talks about cutting taxes, spending, and managing budgets as if his ten years as Texas’ chief executive have lent him the knowledge and experience to be a wise fiscal manager. Unfortunately for Texans and, now that he is seeking the presidency, possibly for Americans as well, that does not appear to be true, in more ways than one, as Washington Spectator editor Lou Dubose explains:
Because there is no income tax [in Texas], property taxes are high. In 2006, Perry called a special session to address property taxes. With no income tax, there are no easy fixes. Yet Perry found one. A business-margins tax he said would provide enough revenue to allow for reductions in property taxes.
It was evident at the time that the new tax would not deliver what the governor promised. The state comptroller, [Republican] Carole Strayhorn, had her staff run the numbers on Perry’s tax-reform proposal.
“In 2007,” she wrote in a letter to Perry, “your plan is $3.4 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.”
The comptroller warned that “no economic miracle will close the gap your plan creates. Even if every dollar of the current  $8.2 billion surplus was poured into the plan, it would not cover the plan’s cost for more than two years, 2007 and 2008. The gap is going to continue to grow year by year.” The shortfall the bill created could only be closed by tax increases, the comptroller warned, “or massive cuts in essential public services — like public education.
By now we all know what Rick Perry is selling. He collaborates with the private sector to create jobs and to attract jobs from other states. The Texas Enterprise Fund and the Emerging Technologies Fund, his creations, have had unprecedented success.
It’s not as simple as Perry would have you believe.
The two big economic development funds Perry controls operate on a trickle-up economic theory. The state takes money from taxpayers and gives it to corporations to entice them to create new jobs.
Yet corporations often fail to deliver, and the governor and his staff rewrite corporations’ contracts to relax their job-creation requirements.
Grants are often made to companies that would move into the state or expand their workforce without a taxpayer-funded incentive.
The governor hands over millions of dollars to corporations whose executives have contributed hundreds of thousands of dollars to his campaigns.
Perry’s scornful attitude toward science — made plain in his explicit endorsement of teaching “intelligent design,” his dismissal of evolution and his extreme skepticism of climate change — apparently applies to basic mathematics as well. His style of accounting rejects empirical facts and projections about budgets and revenues in favor of “economic miracles” that will supposedly allow government to “grow out of it” when faced with hard choices between deficits and taxes.
Despite his poor personal relationship with George W. Bush, Perry’s version of economics sounds an awful lot like what Bush believed when he embraced tax cuts and supply-side doctrine regardless of nonpartisan estimates awash with red ink. (There’s a similar whiff of cronyism to boot.) If a Republican who specialized in budget gimmickry is so enthusiastically supported by Tea Party voters, imagine how they might respond to a candidate who actually reduced the deficit in a responsible manner — like President Obama with his health-care reform. Then again, perhaps we already know.Click here for reuse options!
Copyright 2011 The National Memo