Governor Rick Perry’s State of the State Speech

Governor Perry demonstrated strong leadership by showing we can balance our budget without raising taxes. He indicated his desire to work with the legislature to achieve that goal, and we stand ready to work with him to limit government.

Since 1990, the Texas population has grown by 27 percent and inflation has increased 37 percent. Yet during that same time period, the state’s budget increased 125 percent and state spending on Medicaid jumped 400 percent.

In 2001, the Legislature increased spending on health and human services programs by $4 billion.

Governor Perry showed the state can – and will – balance the budget without a tax increase. Governor Perry laid out options that will provide the legislature with a roadmap for balancing the budget while maintain core state services – all without a tax increase, including:

Adopting key recommendations in Comptroller Carole Keeton Strayhorn’s e-Texas reports to save $1.7 billion.

Redirecting Telecommunications Infrastructure Fund dollars to increase the technology allotment for schools from $30 to $35 per student and save $500 million.

Improving estimates of higher education income, reducing special item projects and asking junior colleges to pay a proportionate share of insurance costs for a $1.1 billion savings.

Reducing agencies’ 2003 appropriation level by an average of 9 percent to save $3.8 billion. Perry said these savings could be achieved while still increasing education funding by $500 million.

Closing tax loopholes and changing the collection of the gas tax to generate $700 million in additional revenue without new taxes.

Increasing funding for public education by $500 million.

The state also must take steps to grow and diversify the economy to protect against future economic downtowns. Governor Perry proposed the creation of a Texas Enterprise Fund to accomplish this goal. The initiative would be financed with $390 million from the state’s Economic Stabilization Fund, also known as the Rainy Day Fund. While spending Rainy Day funds on recurring items would result in more problems down the road, investing wisely in job growth will shield our state from future downturns in the economy. Governor Perry’s jobs plan could also fund a Border Health Institute in El Paso and the Regional Academic Health Center in the Rio Grande Valley.

Governor Perry also proposed an Education Freedom Plan to reduce costly state mandates and increase local control of public schools. School administrators say reducing bureaucratic mandates would save schools at least $500 million, which could be directed back into classrooms. Examples of costly state mandates:

Compensatory education audits are required of districts, even those that receive no direct compensatory education funding. School districts spend $41 million a year on these audits.

The new TAKS test requires the use of graphing calculators, but no funds were provided to schools to purchases these calculators.

Schools must arbitrarily pay $140 million more on utility costs because of a mandate in law that prohibits utilization of cheaper sources.

Governor Perry also reiterated his support for strong actions to end insurance fraud, stop unfair pricing practices, lower homeowners insurance rates, and protect good doctors and other health care professionals from frivolous lawsuits.