On Tuesday, Governor Rick Perry laid out his vision for Texas in his state of the state address before a joint session of the legislature. Against the backdrop of a national recession, a cooling Texas economy, and warnings from Comptroller Susan Combs that our state faces job losses, the governor told lawmakers that Texas can weather this storm and should take action to further improve our state’s job climate while being careful not to make the situation worse.
We agree. Just like a doctor’s first commitment to their patients is to do no harm, the Legislature should steer clear of anything that would create barriers to job creation, business development, and economic prosperity.
Texas has a great story and stands as a model for other states. Through smart governance and fiscal restraint, an environment was created that facilitated the nation’s largest creation of jobs last year. As documented in our research, Texas has paved the way for economic development by staying out of the way of those who seek to start and expand businesses.
Unfortunately, despite our state’s relative success at weathering the national economic calamity, many lawmakers seem willing to risk our state’s health by advocating measures known to derail economic expansion-including higher taxes and burdensome government regulations. Unless this legislature wants to send Texas down the road to ruins blazed by states like California, which may have to start issuing IOUs, it should swiftly abandon these proven recipes for disaster.
Take, for example, the proposal to increase the gas tax-and to index the tax rate to construction inflation, creating automatic tax increases forever from a single legislative vote in 2009. If Texans think they have a problem with runaway home appraisals and property taxes, they should ponder what will happen with a gas tax that is subject to the same whims.
Exacerbating this problem is the fact that the legislature already diverts more than $1 billion from highway funding to pay for non-transportation purposes from narcotics enforcement to Medicaid programs. If this new tax structure is enacted, history teaches us that it would quickly become nothing more than a mechanism to sustain an even larger slush fund for legislative excess.
A tax increase during this economic climate could seal the fate for many Texans whose jobs are already hanging delicately in the balance. The state must first exhaust all other options to identify cost savings and efficiencies before forcing Texans to dig further into their wallets. Above all else, the legislature should first stop diverting revenue that was paid by taxpayers for the purpose of building roads.
Our state is on a path to emerge from troubled national economic times relatively unscathed, as opposed to states such as California that embraced unlimited government. But it takes only one moment of weakness by the legislature to raze the solid foundation of fiscal responsibility that allows us to stand strong while others collapse. Above all things the legislature considers, first, do no harm.
Justin Keener is Vice President of Policy and Communications for the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.