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Cowboy Economics

by Published on

It’s always nice to get a compliment—but it’s even nicer when the compliment is true. Texas continues to be lauded as one of the only states with a booming economy. CNBC recently ranked ours as the best state nationwide for business, prompting the New York Daily News to say “Entrepreneurs, saddle up—it may be time to move to Texas.” On the conservative Web site FrumForum.com, Jeb Golinkin writes that “As bad as the economy is nationwide, Texas continues to thrive.”

If only it were true. We can see where they went wrong. National reporters looked at states’ upcoming budgets for 2011 and noted that Texas’ $4.6 billion budget deficit wasn’t so bad in comparison with other states. It seems like a sensible comparison, since most states have one year budget cycles. But here in Texas we do things a little bit differently. We have two-year fiscal cycles, meaning we wrote our 2011 budget back in 2009. In fact, if you hang around the Capitol these days, the budget deficit you’ll hear about isn’t $4.6 billion for 2011. It’s the projected $18 billion for our 2012-2013 cycle—which is double the annual deficit that the national media has been bandying about as evidence of Texas’ supposedly robust economy.

The skewed coverage offered Gov. Rick Perry a soapbox from which to tout his economic governing principles. By not getting their facts straight, reporters have made it that much harder for legislators to take new approaches to our fiscal Gordian knot. People may ask, why do we have to raise revenues through taxes and new fees if our economy is so good? Instead legislators will likely rely on cutting services and hope no one notices.

But rather than engage in the complexities, journalists stuck to their narratives. Fortune magazine decided to simply offer “4 reasons why Texas beats California in a recession.” It’s just so much fun (ask Gov. Perry!) to perpetuate the myth that while lefty California struggles to pay bloated pensions, conservative Texas soldiers on with low taxes and a can-do attitude. That simply isn’t the whole truth.

Texas may have the most Fortune 500 companies thanks to our low tax, business-friendly climate, but that political philosophy comes with a cost: high sales and property taxes, lax environmental regulations and woefully underfunded schools and social services. Our economy may be one of the largest in the United States, but that’s not helping us close our budget hole or find a way to raise revenues.

But, still, thanks for the compliment.