Thursday, September 29, 2011

Perry’s ‘Texas Miracle’ Turns Out To Be A Mirage


The robust Texas economy Rick Perry is using to sell his presidential campaign may be more fragile than advertised.

According to testimony from the state’s chief revenue estimator, John Heleman, the state economy is in for weak growth this year, a situation that could put pressure on a state budget already barely held together with a series of short-term fixes this year.

“The year of (2012) is not going to be a great recovery year,” Heleman told state legislators yesterday. “It’s still going to be flat-ish. It’s still going to be soft.”

The weak economy has implications for political implications for Perry, who has crowed about closing the state budget’s $27 billion shortfall without raising taxes or dipping into the state’s Rainy Day Fund. As reports noted at the time the budget passed, much of this achievement was accomplished by using temporary accounting tricks like delaying payments and changing estimates for population growth. Now, according to a report by the State Comptroller’s office, some of these tactics are creating serious problems. One method to balance the budget was to increase various fees whose revenue was devoted to specific programs, but then not spend them on those programs in order to have enough money in the Treasury to keep the budget balanced. But since the money from these fees isn’t actually allowed to be spent elsewhere, this can’t last forever: the Austin American-Statesman warns that legislators will either have to keep starving programs boosting emergency medical services and helping low-income residents with utility bills to maintain a balanced budget on paper or find cuts and revenue elsewhere to truly close the gap.

A Super PAC supporting Michele Bachmann’s candidacy has already attacked the governor over the budget and these hits could gain more prominence should the revenue situation require further action.

“Our governor is running for president, and our lieutenant governor is running for the U.S. Senate — and both will count the state’s balanced, no-new-taxes budget among their successes,” the Statesman’s Jason Embry wrote on Wednesday. “Just remember that they used a few multibillion-
dollar tricks to get there.”

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