Bush Acts as if debt doesn't exist or doesn't matter.
You bet he doesn't. I think Mr. Bush has some explain' to do over TX's 12 billion debt load.
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Large States Have Largest Budget Deficits
By Jim Burns
CNSNews.com Senior Staff Writer
January 09, 2003
(CNSNews.com) - California and Texas have the worst state budgets deficits in the nation and they are deepening, a legislative watchdog group said Wednesday.
The American Legislative Exchange Council (ALEC) released "budget figures" showing California with a $35 billion deficit. Texas ranked "second worst" with a potential $12 billion budget deficit, recently surpassing New York State.
"These figures are simply staggering," said Michael Flynn, ALEC's director of policy and legislation. "But what's more alarming is that few states have yet to responsibly address this self-inflicted crisis, a decade in the making, which finally hit home well over a year ago."
ALEC said total state budget deficits for fiscal years 2003-04 now approach $90 billion nationwide.
Gene Acuna, a spokesman for Texas Republican Governor Rick Perry, said ALEC's figures on the Texas deficit represented "a guess."
"Our financial picture is still not known right now because our comptroller has not released her revenue estimates for the coming two years. Any figure like that at this point is a guess," said Acuna.
Acuna also said Perry would definitely not propose raising taxes to fix the deficit problem.
"The governor believes when economies slow, the burden should not be on the taxpayers to pay more, but on government to spend less," he said.
The GOP-dominated Texas Legislature will begin this year's legislative session next Wednesday. State Senator Robert Duncan (R-Lubbock), a member of the Senate Finance Committee, told reporters in Lubbock Monday, the deficit is due to the massive expansion in health care costs as well as enrollment growth in schools and in higher education.
In tackling the deficit, Duncan said lawmakers would have to analyze ways to cut back and ways to bring in more revenue. But, the Texas Legislature is "not big" on the idea of raising taxes, he added.
At the same time, some Texas Senate Democrats are warning their colleagues against cutting services to the poor.
"Why is it the poor have to tighten their belts first?" Sen. Leticia Van de Putte, (D-San Antonio.) asked while meeting with reporters in Austin.
Sen. Judith Zaffirini, (D-Laredo), expects proposals to reduce enrollments in state health programs but believes those programs are reasonable investments in public health.
Zaffirini said opposition to tax increases might fade as lawmakers discard harder choices. She favors a House proposal to raise cigarette taxes by $1 a pack, potentially yielding $1.5 billion in revenue over two years.
"The cigarette tax increase may be anathema to some in January, but it may look more acceptable in May," Zaffirini said.
Last month, California Democratic Governor Gray Davis admitted California's budget gap soared to $34.8 billion. He warned residents of a fiscal crisis more perilous than even he had expected.
Davis blamed the high deficit on a "nosedive in personal income tax revenues," which will make it difficult for lawmakers to find ways to fund critical state programs.
Davis called on state lawmakers to get a "handle on the problem" because, otherwise, it could spawn tax hikes and downgrade the state's credit rating, he said.
The governor will unveil his budget proposals on Jan. 17. It is not known whether he will propose tax increases to erase the deficit. The state's "Legislative Analyst Office," California's version of the Congressional Budget Office, suggested a tax hike on "wealthy Californians" in order to get the state out of debt.
Insiders say heated debate is expected in the Democratic-dominated state legislature. State Senate President John Burton admitted to reporters in Sacramento that it would be difficult to attract enough Republican votes for the two-thirds majority needed to enact a tax hike.
"There are no Republicans who want to -- quote -- do Governor Davis a favor and I think that's kind of a short-sighted approach," said Burton.
One of those Republicans agreeing with Burton's assessment is Assemblyman Ray Haynes. "It's a fair statement because we don't have a revenue problem, we have a spending problem," he said.
"This governor in the last four years has grown California state government more than any other governor in the history of the state. (Republican Governors) Pete Wilson and George Deukmejian, during their 16 years in office, added 37,000 state employees. This governor in his four years in office has added 43,000 state employees," said Haynes.
"He (Davis) has increased welfare spending faster than any governor in the history of the state. If we reduce welfare spending to 1998-99 (levels) when he took office, we would solve our budget problem," Haynes said.
Some Republicans are proposing tax cuts, like Sen. Dennis Hollingsworth, (R-La Mesa), who introduced a bill phasing out the state income tax in 20 percent increments over a five year period for all tax brackets until the tax no longer exists.
Hollingsworth said the tax should be phased out for California's economy to improve and the deficit to be erased.
"I think Californians would be much better off without a personal income tax as well as the state coffers," he said. "The fact is that personal growth is stymied in states that have confiscatory personal income tax policy as we have in California."
Hollingsworth believes the tax "is even more damaging when you are competing with states that do not have a personal income tax. If we want to grow our way out of this deficit, we're only going to do that by raising personal income."
Hollingsworth is not optimistic his bill will pass the legislature but said, "we're hoping to get a fair hearing on this. I don't see that we are going to be successful given the liberal Democrat-dominated legislature and the governor that we have."
ALEC's list of the ten largest state budget deficits are: California with $35 billion, Texas with $12 billion, New York with $10 billion, Minnesota with $4.6 billion, Wisconsin with $2.6 billion, Michigan with $2.4 billion, Illinois with $2.25 billion, Washington State with $2 billion, Connecticut with $2 billion and Maryland with $1.8 billion.
Flynn admonished states not to look to Uncle Sam to bail them out of debt. "Raising taxes or clamoring for a federal bailout is not the answer, and in fact will only perpetuate and deepen the current fiscal crisis," he said.
"What's required is a candid and sober evaluation of each state's medium and long-term costs of operating government. It's only by reducing the size and scope of government in strategic and imaginative ways that each state finds a way out of its woes," Flynn concluded. |
