TEXAS ENJOYS $11 BILLION SURPLUS
November 25, 2008
As most states scramble to patch holes in their budgets, Texas glides along unscathed -- for now, says the Dallas Morning News.
Estimates by fiscal watchdog groups vary, but between 37 and 41 states are dealing with shortfalls this year or will face a budget gap in 2009. While California, New York, Florida, Michigan and Ohio make painful choices -- higher taxes, spending cuts, Texas has a surplus topping $11 billion. Why? Because the subprime mortgage problems have not hit Texans as hard and the state doesn't have an income tax:
- States with income taxes have seen revenue plummet, especially in the Northeast, where financial companies have laid off thousands and in Midwestern states suffering losses of manufacturing jobs.
- Texas is among several energy-producing states reporting no budget gap; others include Alaska, Louisiana, North Dakota and Wyoming.
- Moreover, Gov. Rick Perry (R) has said Texas' economy is strong and continues to create jobs because of low taxes and conservative policies, and state leaders remain upbeat as the next legislative session approaches.
Overall, the state is in pretty good shape, says former State Deputy Comptroller Billy Hamilton. Nevertheless, we're going to have some slowdown, he continues. Declining oil prices and disappointing revenue from a revised business tax may signal fiscal trouble ahead.
However, sales tax receipts have remained strong. And Lt. Gov. David Dewhurst, who presides over the state Senate, recently promised to restrain spending in next budget but said that "because of conservative fiscal decisions ... our state's economy remains stronger than virtually every other state in the nation."
Source: Robert T. Garrett, "Texas watches spending despite $11 billion budget surplus," Dallas Morning News, November 24, 2008.
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