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James McKinley Again Calls for Tax Hikes in Texas

Houston bureau chief James McKinley: "Democrats said Mr. Perry and Republican legislative leaders, who have big majorities in both houses, are ignoring reality to curry favor with Tea Party conservatives. They point out that the governor regularly boasts about people moving to Texas but has not budgeted for the costs of rising school enrollment....Many lawmakers think Mr. Perry is more concerned about laying the groundwork for a run for national office than averting painful budget cuts."
Houston bureau chief James McKinley Jr. pressed Texas's Republican governor Rick Perry to raise taxes to close the budget gap in Wednesday's "Gap Aside, Texas Governor Offers Optimism on Budget." McKinley's Texas coverage is marked by his consistent cheerleading for Democratic candidates, while accusing Republican Gov. Perry of narrow-minded taxphobia and political opportunism.

Gov. Rick Perry of Texas cannot be faulted for lack of optimism. Facing a two-year budget gap of at least $15 billion, Mr. Perry struck a defiant stance in his annual address to the Legislature, calling the state economy "the envy of the nation" and promising the budget would be balanced through spending cuts alone.

"Now the mainstream media and big-government interest groups are doing their best to convince us that we're facing a budget Armageddon," he said. "Texans don't believe it, and they shouldn't, because it's not true. Are we facing tough choices? Of course, but we can overcome them by setting priorities."

To be sure, Texas fared better than many other states during the recent recession, but sales tax revenues were badly hurt as people curbed spending. The depth of the state's revenue shortfall was also hidden because it employs a two-year budget cycle and had used billions in federal stimulus money to avoid cutbacks in 2010. Now the state finds itself in a budget crunch not unlike those in New York, California, New Jersey and Illinois.

McKinley again pushed Democratic voices in support of tax hikes in Texas.

Republicans, who control every statewide office as well as both houses of the Legislature, are beginning to confront what it means to close the budget gap solely with cutbacks. About 10,000 state employees are in danger of getting pink slips. House and Senate leaders have said they plan to cut aid to schools by $10 billion, a move that would force the layoffs of thousands of teachers and increase class sizes. Lawmakers are also contemplating slicing Medicaid payments to doctors and other providers by 10 percent.

At Statehouse hearings in recent days, advocates for schools, the poor, the disabled and the elderly laid out in detail how Texans would be hurt by cutbacks. They forecast a near future in which nursing homes and rural health clinics would have to close, schools would be consolidated and nursery schools shuttered.

But Mr. Perry, who has worked to raise his national profile as a fiscal conservative, vowed again in his speech not to raise taxes. He also said he would not tap into the state's reserve fund of about $9.4 billion, fed with oil excise taxes, saying it would be irresponsible to use emergency funds on salaries and other recurring expenses.

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Democrats said Mr. Perry and Republican legislative leaders, who have big majorities in both houses, are ignoring reality to curry favor with Tea Party conservatives. They point out that the governor regularly boasts about people moving to Texas but has not budgeted for the costs of rising school enrollment.

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Many lawmakers think Mr. Perry is more concerned about laying the groundwork for a run for national office than averting painful budget cuts. Though Mr. Perry has said repeatedly he is not interested in running for president, others see his themes of low taxes, limited services and tight regulation as a platform for a possible run in Republican primaries.