The Agenda

Katrina Trinko on the Perry Spending Record

As NRO’s Katrina Trinko makes clear, Rick Perry really has been a budget-cutter in Texas by a reasonable definition: 

During the debate at the Reagan Library last week, the Romney campaign blasted out an e-mail to reporters entitled, “Perry’s Record on Spending,” with an ominous warning that “under Perry’s leadership, total state spending has increased by an average of nearly 17 percent each budget cycle.” Keep Conservatives United, a PAC supporting Michele Bachmann’s candidacy, released a TV ad earlier this month charging Perry with “doubl[ing] spending in a decade.”

But factor in inflation and Texas’ population boom, and the uptick in spending becomes significantly more reasonable. The same analysis by the Fort Worth Star-Telegram that the Romney campaign used as a source for the 17-percent spending growth each budget cycle reported that “once adjusted for population and inflation, that rate falls to 4.2 percent.” But that rate includes federal dollars sent to Texas. Subtract that, and Perry has decreased spending — the first time any Texas governor has done so since World War II. “When you exclude federal dollars, state spending adjusted for population growth and inflation actually has gone down by 6 percent,” reported on Perry’s record.

Let’s think this through for a moment. The federal dollars sent to Texas include Medicaid dollars, as Medicaid is a joint federal-state program. One possible interpretation is that Texas has reduced the exposure of its state taxpayers to various joint federal-state efforts while increasing the exposure of federal taxpayers. This reminds me of Florida Gov. Rick Scott’s decision to cancel the Tampa-to-Orlando HSR project. He was criticized at the time for refusing to back the project despite the fact that federal taxpayers were on the hook rather than Florida taxpayers. The view I expressed at the time was that Scott nevertheless did the responsible thing, in part because Florida taxpayers are also federal taxpayers. 

In fairness to Perry, it could be that the federal dollars in question are unnecessary. That is, they are not meeting a need that Texans would otherwise meet on their own in the absence of the federal cash infusion. If the federal dollars are, however, meeting a need, it is fair to question whether there has been some gamesmanship going on, and whether Texas has been a particularly egregious offender in shirking its burdens. I’m inclined to believe that this is not the case, but it’s a question worth asking. 

There is another set of facts that is worth keeping in mind, which Trinko cites later in her piece:


Chris Edwards, director of tax-policy studies at the Cato Institute, compared Perry’s spending record with those of other governors and decided that Perry was “rather centrist” on spending overall. Crunching the data, Edwards found that under Perry, per capita spending in Texas had risen by 18 percent, the same amount that spending in other states increased, on average, in the years Perry was governor.

This points us in a different direction. If Edwards is right, Perry has managed to find himself in the middle of the pack despite the fact that he was holding “four aces.” On the other hand, it is also possible that Texas has improved the quality of public services faster than other states while keeping spending in line. This improvement in quality might be masked by demographic shifts, i.e., Texas’s K-12 population may well have become more challenging due to limited English proficiency, disrupted households, etc., relative to the K-12 cohort of a decade or two ago. 

Perry has been willing to accept federal funds. He turned down stimulus funds targeted for assistance to the unemployed ($555 million) — but accepted nearly $17 billion in stimulus funds targeted at other efforts. An analysis by PolitiFact Texas found that Texas had shifted from a donor state (paying more in taxes than receiving in federal funds) to a recipient state under Perry’s tenure. “On an annual basis between 1981 and 2003, Texas almost always paid more in federal taxes than it got back from Uncle Sam. But since 2003 the reverse has been true, with Texas receiving more than it paid in five out of seven years, which is close to routine,” PolitiFact Texas reported in April.

There are many reasons Texas might have become a recipient state. The most obvious is that the state’s demographic composition has changed. A growing share of younger Texans are of Mexican origin, and at least some of them have foreign-born parents with limited English proficiency and other disadvantages that make them more likely to be eligible for federal assistance. 

But accepting federal funds isn’t the only chink in Perry’s small-spending armor: He also can’t point to the same experience with budget wars that a Scott Walker–type would have accumulated over the years. Having governed in Texas, Perry benefited from having a conservative legislature — which means he is “untested” on his ability to cut spending when confronted by a different kind of legislature and fiscal situation, observes Edwards.

Keep in mind that Gov. Perry has been forced to make deep cuts in K-12 spending in the last budget cycle, and across the board. Having been in power for over a decade, one has to wonder why Gov. Perry has left so much fat on the bone. Has he not had his eye on spending throughout his tenure?  


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