Since we’re right here in the heart of compassionate conservatism, it seems like a good idea to check and see how it’s going so far. First rat out of the trap, as it were, our new Republican Texas Senate, led by our new Republican Lieutenant Governor and urged on by our Republican Governor, passed a very compassionate $45 million tax break for the oil and gas industry. So on the evidence thus far, we’d have to say that compassionate conservatism looks a whole lot like the old mean, nasty conservatism we’re all used to.
(Mean, nasty conservatives were always giving tax breaks to the oil and gas industry. In fact, that was pretty much their main thing.)
Governor George W. Bush’s first compassionate move was to declare an emergency, so the $45 mil tax break can go into effect immediately upon full passage.
Now, notice that this tax break is not for the owners of great big oil and gas wells. It is for the owners of small oil and gas wells. Tiny. Itty-bitty, really. And I for one have no trouble at all endorsing the compassionate thought that anyone who can’t get more than fifteen barrels a day out of a well when the price of oil has dropped below $15 a barrel for three months running should not have to pay the state all those taxes on it.
And I fully appreciate how much the oil and gas industry needs this compassionate help from the state. Woman and girl, I have been listening to the oil and gas industry explain why it needs special tax breaks for the better part of four decades now, and it is clear to me that the industry needs these breaks when times are bad (as they are now) and when times are good (as they have been and will be again) and when times are only middling.
The sponsor of the tax break in the Senate, J.E. “Buster” Brown, explained simply, “The oil industry is hurting.” And there’s nothing like pain in the oil industry to touch off compassion in a conservative.
Senator Bill Ratliff says that 1,687 oil wells and 948 gas wells in Texas were shut down last year because of falling production and high production costs. That’s what usually happens when the price of oil goes down a lot.
True, there were some carpers. Senator Eliot Shapleigh of El Paso voted against the tax break; he said the economy in his part of the state depends on the copper industry, and copper prices are down, but there is no targeted tax cut for copper producers. Senator Mario Gallegos said he had a steel plant in his district shut down a while back, and no one offered targeted tax relief to his constituents.
Veterans of previous downturns in the oil bidness know what usually happens when the price falls so low that it’s not worthwhile to keep a low-producing well running: they cap the wells until the price goes back up.
This has worked well for both Texas and O.P.E.C. But the owners of these itty-bitty, teeny-weeny oil wells say they never will pump again if they have to shut down. Myself, I’d say that depends on how high the price of oil goes, but I wouldn’t want to be accused of cynicism.
Under the doctrine of the new compassionate conservatism, we citizens are supposed to show “personal responsibility.” Which I guess the owners of the teeny-tiny oil wells did, on account of their lobbyists certainly were active at the Capitol, which is one way to take personal responsibility.
And then if personal responsibility doesn’t suffice, we’re supposed to apply to “faith-based” help groups. Here, I’m sorry to say, the oil industry has not followed script. The Texas Independent Producers and Royalty Owners Association was not faith-based, last time I checked.
What T.I.P.R.O. wants to do here is dump an additional $45 million worth of tax liabilities on the non-well-owners of the state, and let me remind you on whom that burden falls. According to the state comptroller’s office, the poorest Texans shoulder a disproportionate amount of the state’s total tax burden. In its biennial study released just a few weeks ago, the office found that while the lowest-income residents pay the greatest percentage of state taxes, the highest-income Texans benefit most from exemptions on sales and franchise taxes. I must admit that this report amazed no one.
Meanwhile, according to a recent article in the Houston Chronicle, just as our governor was urging Texans to “rally the armies of compassion,” a new study showed low-income residents doing worse than the national average in just about every way.
According to a January 1999 report by the Urban Institute, a higher percentage of our families – four out of ten – live on small incomes. A larger percentage reports a lack of health care and concerns about whether they can afford food.
The Lone Star State has:
More parents with housing difficulties.More children in families that have trouble affording food.More residents in fair to poor health.More children and adults who lack health insurance.
This also amazed no one. How nice that things are going to be very different under compassionate conservatism.
Molly Ivins is a former Observer editor and a columnist for the Fort Worth Star-Telegram. Her latest book is You Got to Dance With Them What Brung You. You may write to her via e-mail [email protected].