From the Institute for Policy Innovation (IPI)
Published: 01-21-09
With anticipated state revenues falling more than a few fans of bigger Texas government are whispering about the need for a state income tax.
The Center on Budget and Policy Priorities a liberal policy study group with tentacles in Texas and other states says “Texas needs to address its antiquated tax system.” The center suggests in another essay considering “new sources of revenue as part of a balanced approach to our budget.”
Expect more of the same if voters come to embrace Keynesian-Obamanomics responses to the economic crisis: that is to say spend spend spend.
Odd. Texas despite a recent jump in joblessness isn’t having a “crisis.” The state government’s budget isn’t in the red unlike the budgets of income-tax-levying states like New York ($15.4 billion) and California ($40 billion). Indeed it’s been in the black for a while.
General revenues in Texas according to the state comptroller’s office will be down by $2.2 billion for the next budget cycle—dropping from $170 billion two years ago including federal receipts to $167.7 billion. Meanwhile an existing cash balance is said to have shrunk by $6.9 billion from two years ago.
But that’s ample money to run the state until the economy—the state’s as well as the country’s—recovers. Moreover oil and gas revenues have filled the state’s “rainy day” fund to the tune (estimated) of $9.1 billion over the next two fiscal years.
“Antiquated” tax system? Sounds more like the result of the “antiquated” concept of thrift and careful budgeting.
Certainly with an income tax we could spend a lot more. Why though? So as to get caught short like California with a deficit requiring even higher taxes?
The better way involves what we’re pretty much doing now—shunning exuberant calls for government growth and remembering that Texas didn’t gain the CNBC ranking of the “top state for business” by biting into even-larger helpings of the private sector.
Come to think of it shouldn’t the Center on Budget and Policy Priorities be extolling Texas as a model for other states? The real “antiquated” thinking is with groups that believe the only solution to any problem is higher taxes.
