Wed January 30, 2013
State-of-the-State Analysis: Will Lawmakers Buy Perry's Tax Cut?
Originally published on Wed January 30, 2013 6:00 am
Two SMU political science professors disagree on whether Governor Rick Perry’s call for a tax cut will sail through the legislature. We asked professors Cal Jillson and Matthew Wilson to watch the governor’s state-of-the state speech yesterday and tell us what impressed them.
Standing on the dais in the Texas House, an energized Governor Perry seemed like the head cheerleader at a pep rally as he said the Texas economy was the envy of the country.
“We led the nation out of recession and into recover and remain the nation’s prime destination for employers and job seekers alike,” the governor declared.
Perry credited the Texas model of limited spending for the state now having a year-end budget surplus and money in the Rainy Day savings account.
Some lawmakers want to use that money to restore funding to education and programs slashed two years ago, but Perry has another idea.
“In a legislative session where we can see billions still on the table after we've funded our services and met the needs of our ever-expanding population. I think providing tax relief of at least $1.8 billion over this biennium is a good place to start.” Perry said.
The audience applauded loudly as Perry urged Texans to make suggestions on where to cut taxes at his website.
Gov. Perry's State of the State address to the 83rd Texas Legislature on January 29th, 2013:
SMU political science professor Matthew Wilson says tax relief was a home-run message for the mostly Republican crowd.
“I don’t think you’ll have any problem getting tax relief through an overwhelmingly Republican legislature,” said Wilson. “The devil will be in the details on the tax relief.”
Wilson said it wasn’t clear exactly how Perry’s tax relief would be implemented.
“Are we talking about checks being sent out to individual tax payers? Are we talking about tax credits for businesses? Those specifics still need to be fleshed out.” Wilson pointed out.
But Wilson’s SMU colleague, Professor Cal Jillson says giving tax breaks may not play well with a lot of Texans who believe education and other basic programs are still bleeding after funding cuts two years ago.
“I think both Democrats and Republicans are very concerned that we’ve got issues to deal with and that we don’t really have the revenues for a tax cut,” said Jillson.
“People have to actually put pencil to paper and figure out how to fund Texas state government and to rebuild the education funding that was lost last time. And so in the end I don’t think we’ll be dealing with tax cuts in this session,” he said.
Jillson also sees friction building over Perry’s promise to keep Texas out of the federal government’s Medicaid expansion program.
In his address Perry said, “Texas will not drive millions more into an unsustainable system,” because it would bankrupt the state.
Joining the program would provide health insurance for 1.5 million Texas and bring billions of federal dollars.
“It’s a lot of money,” said Jillson.
“Over the next decade more than $100 billion in federal funds and we would have to come up wit $15 billion in Texas revenues to draw down those funds,” he explained.
“The governor thinks the revenues are going to remain tight and he doesn’t want to build in that extra funding, but the business community and the hospitals and the healthcare system in general in Texas is just beside itself. They need money to balance its books,” he said.
Professor Matt Wilson believes Perry’s speech was also notable for what he didn’t say about immigration, which was a focus during his last state of the state address.
“There was no talk about desires to toughen border security, any of that sort of thing. I think Rick Perry has really turned the page on that. He’s sending a pretty clear signal he wants to cultivate the Latino constituency,” said Wilson.
Professors Wilson and Jillson both believe it was significant for the tight-fisted Perry to call for spending $3.7 billion from the Rainy Day fund to jumpstart water and transportation projects.
And they agree that the overall tone of the speech laid the ground work for Governor Perry to seek reelection.
“It was a speech about Texas exceptionalism, how well we’ve done during his time,” said Jillson
But neither political analyst heard anything that rehabilitated Perry’s image as credible candidate for president.
“It’s a bit more of a stretch to think about another presidential run because the first one went so badly,” observed Wilson.