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Feb. 11, 2003
Gov. Perry Outlines Proposals to Balance Budget in State of the State
'Texans elected us to set priorities, not to raise the price of government'
AUSTIN - Saying Texans "don't want, don't need and don't deserve new taxes," Gov. Rick Perry today laid out a series of proposals to streamline programs and balance the budget without a tax increase during his State of the State address.
"The challenge of our time and the mandate of our people require a new approach and a new direction," Perry said before a special joint session of the 78th Texas Legislature in the House Chamber. "We must separate wants from needs, identify core priorities, and put the common interest ahead of narrow special interests."
The governor cited several recent successes in Texas - including Toyota's decision last week to build an $800 million truck manufacturing plant in San Antonio, bringing 2,000 new jobs to the area and generating $100 million a year in salaries. Perry also cited Hewlitt-Packard's recent decision to move 475 jobs from California to Texas.
"It is not the state of our state that concerns me," Perry said. "It is the state of our government."
Since 1990, the Texas population has grown by 27 percent and inflation has increased 37 percent. Yet during that same time period, Perry noted, government has expanded by 125 percent.
"Texans elected us to set priorities, not to raise the price of government," the governor said before outlining consolidation and savings measures that would reduce state spending by $9.5 billion over the next biennium. Among the governor's proposals:
- Adopt key recommendations in Comptroller Carole Keeton Strayhorn's e-Texas reports to save $1.7 billion.
- Redirect Telecommunications Infrastructure Fund dollars to increase the technology allotment for schools and save $500 million.
- Improve estimates of higher education income, reduce special item projects and ask community colleges to pay a proportionate share of insurance costs for a $1.1 billion savings.
- Reduce 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.
- Close tax loopholes and change the collection of the gas tax to generate $700 million in additional revenue without new taxes.
The governor also called for deregulating tuition at state colleges and universities, reducing administrative costs at state agencies and examining Medicaid's structure, benefits and costs.
"We would be wise to remember a universal truth," the governor cautioned legislators. "No government has ever taxed and spent its way to greater prosperity. … When difficult times beckon, leaders must not do what's easy, but what's right."
Saying the state must set clear and limited priorities, Perry listed his top concerns as "the education of our children, the security of all Texans and the fiscal responsibility of our government."
The governor also proposed the creation of a Texas Enterprise Fund to help expand the state's economy and protect the state against future economic downturns. The initiative would be financed with $390 million from the state's Economic Stabilization - or Rainy Day - Fund.
"To meet the demands of a competitive marketplace, we must be nimble, aggressive and forward-looking," Perry said. "The best way to avert future rainy day scenarios is to grow our economy."
The governor said the Texas Enterprise Fund would be used to bring more companies and jobs to the state and diversify the economy. The fund also could finance a Border Health Institute in El Paso and the Regional Academic Health Center in the Rio Grande Valley, Perry said.
"By responsibly balancing the budget and taking innovative measures to create jobs, we will address the most urgent needs of both the present and our future," Perry said.
Stressing the need to "focus on results instead of micromanaging the process from Austin," 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.
Perry also discussed his High School Completion Initiative, funded through federal, state and private sources, to identify and help students at risk of dropping out, and he renewed his support for strengthening science education and rewarding teaching excellence.
The governor touched on several other topics during his State of the State address, including:
School finance: "We must work until a solution is found, because the era of Robin Hood must come to an end."
Homeowners insurance: "For this legislative session to be a success, this legislature must take strong action to end insurance fraud, stop unfair pricing practices and lower homeowners insurance rates."
The environment: "We must pass a budget that fully meets our clean air obligations because future generations deserve nothing less."
Medical malpractice insurance: "Reform our medical malpractice laws by passing a $250,000 cap on non-economic damages. All across Texas, patients are seeing their doctors hang up their white coats and stethoscopes because they are being forced out of practice. When specialists cannot afford malpractice insurance, or must turn away high-risk pregnancies because for fear of a lawsuit, then a health care catastrophe is not far from the making."
Homeland security: "With the presence of many valuable resources, and numerous points of entry, we must also remain vigilant in protecting this great state from the destructive designs of terrorist enemies."
Transportation: "We must give the Department of Transportation the tools they need to build a 21st Century transportation system that gets traffic moving, removes hazardous vehicles from our cities, reduces pollution and adds to our job base."