Blame D.C. Democrats for Texas Budget Woes

Federal government bears more responsibility for Texas budget woes than state does By George Scaggs Texas Insider Report: AUSTIN Texas  For those who spend their time demonizing the sensible & responsible actions of the Republican led Texas legislature as it pertains to the state budget they might consider directing their frustrations elsewhere. How about Democrats in Washington?  While there are a myriad of factors behind our states budget woes careful examination finds the federal government at the heart of the matter over and over again. First it should be noted that the current spending reductions being debated have been inflated by Obamas stimulus package of 2009. According to CNN Money Texas used $6.4 billion of federal stimulus money to cover its shortfall in the 2010-2011 budget cycle. Another way of looking at this would be that the previous budget was enlarged  to spend money that the state typically does not have at its disposal. Federal stimulus dollars served as an additional source of revenue beyond what was available in state coffers. Let government get their hands on money and you can count on it being spent. The trouble is Washington didnt have the money to spend either. In essence the federal government borrowed money to provide temporary funding for spending that Texas  could not afford otherwise. If not for the existence of these one-time borrowed dollars surely Texas lawmakers would have produced a smaller budget than the $182 billion budget that they eventually passed. Subsequently the legislature is now making the necessary structural adjustment that must be dealt with. In truth required spending cuts are more strict than they would have been without the infusion of federal dollars. Mind you that temporary stimulus spending from the feds was all new debt every last penny of it. Todays deficit spending is tomorrows tax increases. In the end that irresponsible federal spending (which has only made todays Texas budget debate all the more contentious) will likely result in higher taxes for all citizens including Texans. For those who think Texans should be paying higher taxes dont worry we all will eventually. It is important to note that for every dollar Texans send to Washington the state receives 82 cents in return. In other words the central government has put Texas in an inequitable situation disproportionately harming the prosperity of our citizens and straining our ability to pay for services at the state level. An ever growing number of economists agree that the nations dramatic growth in deficit spending is hampering economic recovery. When Washington spends borrowed money it takes capital from the private-sector dampening economic activity in general. Consequently Texas sales tax receipts have suffered right along with the rest of the nation. In sum federal policy is having a direct negative impact on the revenue side of Texas budget equation. While there is no doubt that spending in Washington has been out of control for quite some time under the one-party rule of Obama Reid and Pelosi deficit spending accelerated into hyper-drive. What the feds could not borrow they merely printed consequently devaluing our currency and shrinking the buying power of all Americans. Making matters worse oil is traded in U.S. Dollars creating a direct correlation in value. As Washingtons actions have shrunk the worth of the dollar they have driven up the price of oil resulting in higher gas prices. As consumers necessarily spend more on gas they have less to spend on everything else further depressing sales tax receipts. Democrats in Washington also spent a year and a half essentially freezing investment and hiring with their zeal to pass the onerous Obamacare scheme and threatening tax increases. Though GOP victories last November stopped the Lefts dreams of raising tax rates even after the high costs associated with the Democrats health care plans were exposed the matter continues to be tied up in courts further preventing business owners from investing and expanding. But the federal governments negative impact on revenues in Texas doesnt stop there. The on-going permatorium on oil and gas production in the Gulf of Mexico is another drag on Texas economy. The resulting lack of economic activity can only mean less revenue coming into both federal and state coffers. As damaging as Washingtons actions are to the revenue side of our states balance sheet they have had a tremendous negative impact on the expenditure side as well. The federal government refuses to secure the border with Mexico and deal with what may be as many as one million illegals here in Texas. Clearly the states law enforcement public school and healthcare service systems are being severely strained. If Texans want to ensure that government can provide the basic services that citizens feel they deserve then the first order of business should be to ensure that we are not paying for services for those who are in the country illegally. Oddly enough none of the groups youll find protesting budget cuts at the state capitol are calling for this common sense measure. Ultimately if Washington is going to insist that all immigration matters are their exclusive domain then Texas should be sending Washington the bill for dealing with the aftermath of their failure to effectively control immigration. In conclusion it may just be that the federal government bears more responsibility for Texas budget woes than the state does.