California’s state government is $16 billion in the red.  Prior to his, um, recent public perplexities, New York Gov. Eliot Spitzer was talking of major tax increases. His successor, David Paterson, now is taking up the cry. New Jersey and Pennsylvania are contemplating tolls on state roads; Illinois could levy fees on state park use.

All told, 22 states face a collective deficit this year of $37 billion. Thirty-five to 40 could be obliged to cut their budgets next year.

In Texas, the Comptroller Susan Combs reported an 8.8 percent increase in February state and local sales tax revenues over the same month a year earlier.

As compared with the first half of fiscal 2007, revenues for the first half of fiscal 2008 are up 7.1 percent. Texas’ unemployment rate is 4.3 percent; for the country as a whole it’s 4.9 percent.

The situations noted above aren’t strictly comparable. Nor should Texans contemplate them in the spirit of yaaah-yaaaah-you-bums-we-told—you-so.

Some urgent considerations need distilling, nevertheless, from recent news about the budgetary horrors accumulating around the country.

It seems only yesterday since state budget makers were wringing hands and contemplating office windows from which to defenestrate themselves.

Indeed it was only yesterday — five or six years ago, during the economic downturn that followed the tech collapse and 9/11. Here we go again. We didn’t learn much, did we? Evidently not.

Nor did Texans learn much either. They already knew, you see, that the faster the good times roll, the more painful becomes the process of watching those times decelerate, if not go into reverse.

In other words, Texans knew better, collectively, than to go on a state spending binge from which they’d ultimately be recalled, like over spenders in the public or the private sector either one.

The principles that underlie the state’s fiscal management are essentially sound. Not so, in every respect, the application of those principles.

For instance, user fees don’t always get put to the use for which they are nominally collected, and every state budget — such being the nature of politics — contains dumb and wasteful programs. Permit me not to name a few of those so as to move on to the point.

The point is that 1) relatively low levels of taxation and 2) relatively low levels of spending contribute to economic success.

Texas, with the 48th lowest average of tax collection among the 50 states — $1686 per capita — takes from the citizens only 4.9 percent of personal income, vs. a national average of 6.8 percent.

Not bad. The state that ranks 49th in average tax collections is New Hampshire, and who wants to live in a state where every presidential year the media stick a microphone in your face if you try to buy a cup of coffee? And where average winter temperatures hover not far above zero?

Fuggeddaboutit, as ex-Gov. Spitzer’s constituents are wont to say.

The habit of restraint is among the most rewarding of public, not to mention private, virtues: restraint in the raising of tax moneys, restraint in the spending of those moneys.

When the state restrains itself, private people — workers, employers, entrepreneurs — have money left over for themselves. That’s one explanation for Texas’ success at job creation. Presently three of every new 10 jobs in the United States are Texas jobs. Yes, yes, ours is a big state, with more people than most other states. Yet consider why so many live here. One major reason is an economic climate that succeeds on account of encouraging economic endeavor.

None of this — I emphasize again — is to gloat over the economic problems and distractions of other states. It is to say, let’s not mess this thing up.

Who knows, by the time the next Legislature assembles, what the broad economy will look like, or how demands for new spending will have multiplied?

The Legislature’s first task, in the event of economic challenge, will be to keep its head —and its grasp of what constitutes sound economics. Sound economics — such as Texas generally has pursued — means spending what comes in instead of acting as if there really were more, or, looking for villains to blame when the “more” we wish for isn’t there.

A half decade ago, when revenues slackened and hard choices reared their heads, the Legislature, under Gov. Rick Perry’s prompting, sliced the budget down to digestible size. The strategy worked. And when economic conditions improved, as they always do, Texas was readier than most states to pick up where work left off and build better than before.

Preliminary thoughts, these. Best time for having such thoughts, by the way, is when they’re preliminary: no loaded guns pointed at the heads of the men and women who write our laws.

Comments (3)

Comment	smaller | bigger
Name
Write the displayed characters
Subscribe via email (Registered users only) I have read and agree to the Terms of Usage.
	Add Comment