Texas Gov. Rick Perry likes to tell Washington to stop meddling in state affairs. He vocally opposed the Obama administration's 2009 stimulus program to spur the economy and assist cash-strapped states.
Perry also likes to trumpet that his state balanced its budget in 2009, while keeping billions in its rainy day fund.
But he couldn't have done that without a lot of help from ... guess where? Washington.
Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures.
Texas, which crafts a budget every two years, was facing a $6.6 billion shortfall for its 2010-2011 fiscal years. It plugged nearly all of that deficit with $6.4 billion in Recovery Act money, allowing it to leave its $9.1 billion rainy day fund untouched.
"Stimulus was very helpful in getting them through the last few years," said Brian Sigritz, director of state fiscal studies for the National Association of State Budget Officers, said of Texas. Even as Perry requested the Recovery Act money, he railed against it. On the very same day he asked for the funds, he set up a petition titled "No Government Bailouts." "Join our fight and add your voice to a growing list of several thousand Americans who are fed up with this irresponsible spending that threatens our future," Perry wrote on his blog on Feb. 18, 2009.
A governor's spokeswoman played down the money's role in shoring up Texas's finances. "Texas would have balanced its budget regardless of the presence of stimulus dollars," said Lucy Nashed, Perry's deputy press secretary. "This money came from the pockets of Texas taxpayers, and we are committed to getting our fair share of these dollars, which would have otherwise been disbursed to other states."
Difficult years ahead
Unfortunately for Texas, and for most other states in the union, the stimulus safety net has dried up. So they are now facing draconian spending cuts as they try to close yawning budget gaps for fiscal 2012, which starts July 1 in most states.
Texas is in trouble too. State lawmakers last week unveiled an austere budget for the 2012-2013 fiscal years that cuts $31 billion in spending. Schools, colleges, Medicaid and social services for the needy will be hit especially hard.
The state won't replace any of the federal stimulus funds with its own revenues, said Rep. Jim Pitts, who is writing the budget bill for the Texas House. It doesn't have the money. The state comptroller estimated that revenues will be $15 billion less in fiscal 2012-2013 than the previous two-year period.
Comical to say the least, that the US government gives money to any state, and let alone one that has a $9 billion rainy day fund. 97% of their budget deficit was cured by Uncle Sam. No one has to get real about solving financial problems when debt and/or free money is offered!
If stimulus or government aid is truly off the table going forward, many states are in for a rude awakening this summer when the draconian cuts in services and people must take place, and local and state taxes might go higher, while public unions bitch about it not being their fault or their issue.
I still think this is the number one issue in America in 2011, it seems like it's coming to a boiling point this summer with out more from the US gravy train. Let's hope that's over!
Hope all is well.
J.D. Rosendahl, Rosey