Thursday, August 04, 2011

Rick Perry Has Put Texas in Debt $21 Billion to Build Roads--and Plans $10 Billion More!

Texas Governor Rick Perry has continued flitting around the country, proclaiming the superiority of the Texas economy over just about everyone elses and taking credit for balancing the Texas budget without raising any new revenues. He's also a constant conservative critic of federal spending and borrowing.

Nay-sayers have pointed out that Perry never acknowledges taking federal stimulus money to balance the state's previous budget--even though he could not have balanced it without the federal funds.

Now comes the revelation that Perry, in addition to gorging himself at the federal trough, has since 2001 also saddled Texans with $21 billion in indebtedness for new road construction -- and plans to raise the number to $31 billion during his current term!

Here's the story, from yesterday's Houston Chronicle, authored by Jim Dunnam, a former Texas state representative and senior fellow at The Texas First Foundation, which aims to put what is right for Texas ahead of partisan politics.

With all our attention focused on the federal debt-ceiling debacle in Washington, it is easy to ignore our own state debt crisis here in Texas. Texas' debt is increasing at a rate that rivals the federal government's, yet no one seems to know it.

We have heard how our new Texas budget cuts more than $4 billion from our schools and students, but not about our ballooning state debt.

Before Rick Perry became governor, Texas was a pay-as-you-go state for roads, meaning we used current gas tax receipts to pay for new road construction. Our forefathers set up a system where transportation needs were paid for then and now, not by passing the buck to future generations. Under Gov. Perry, all that changed.

Starting in 2001, Texas started borrowing money for new road construction, pushing that cost onto future taxpayers. In just a decade, this debt has grown from zero to $11.9 billion. With interest payments, future taxpayers and our children will need 20 years and $21.1 billion to pay off that debt. There is even more about to be borrowed. In all, the Texas Department of Transportation (TxDOT) has authority to borrow $17.3 billion, with a 30-year payoff of $31.1 billion, further shifting the burden to our children.

To make matters worse, new transportation debt is being secured by general state revenue, not just the gas tax. The exact same taxes we use to pay for public education, state universities and health care are now being diverted to make bond and interest payments on this debt. Imagine what future Texans could do without being saddled with $14 billion in interest payments over the next generation. They might not have to take money out of their public schools or health care. They might even have a real tax cut some day.

This debt is as potentially crushing on the future of Texas as the federal debt is for our United States. Texas' borrowing has gotten so bad that we are now spending more annually on debt service than we are paying for new roads. According to TxDOT's latest figures, we will spend $1.72 billion on debt payments over the next two years, compared to $1.28 billion for new roads. Just like Washington, Austin is borrowing and spending away our future.

Texas should have never gotten away from the pay-as-you-go system for roads. Our tax system is inefficient and broken. Instead of fixing our broken revenue structure, changing the 20-year-old gas tax methodology, or closing tax loopholes, nearly all of our future infrastructure needs are to be funded by borrowing from the future generation of Texans.

With infrastructure needs only expected to grow, TxDOT continuing to issue bonds is unsustainable. Soon, all funds will be needed just to service the debt and pay interest, leaving nothing for future needs. In fact, bond rating agencies are already looking negatively upon toll road debt in the states, so even that favored option of Perry's will be gone.

Texas' political leadership likes to flaunt our balanced budget and admonish the federal government for its lack thereof. But those leaders are living in a giant glass house and deceiving Texans. The balance in Texas' budget is achieved largely through accounting tricks and debt, both of which shift the burden to future taxpayers. Genuine equalization between revenue and spending levels is nowhere near the truth about Texas' budget.

Today's successful Texas politicians shout, "No new taxes," then cut public education and health care for children, use accounting tricks to delay bills and advance receipts, then pat themselves on the back for balancing the budget. In the meantime, they quietly saddle future generations with billions in new debt obligations. Their borrowing means our children will pay nearly double tomorrow for what they are unwilling to pay for our needs today. Our parents did not do that to us, and we should be ashamed for betraying that legacy.

Texas needs roads, and we also need education. We have to have an honest conversation about how we can balance these needs without extreme cuts and without simply putting it all off for others to deal with.

1 comment:


This will all make it's way out through the election process. Perry has pulled far too many scandelous stunts to keep all his skeletons in the closet. :}