It looks like the secret behind Texas’ ability to avoid the kind of budget woes that afflicted so many states last year was two-year budgeting rather than the miracle of low-tax, low-service, lax-regulation policies:
This month the state’s part-time legislature goes back into session, and the state is starting at potentially a $25 billion deficit on a two-year budget of around $95 billion. That’s enormous. And there’s not much fat to cut. The whole budget is basically education and healthcare spending. Cutting everything else wouldn’t do the trick. And though raising this kind of money would be easy on an economy of $1.2 trillion, the new GOP mega-majority in Congress is firmly against raising any revenue.
The good news is that I think the $95 billion figure may actually be a one-year number so the picture’s not quite as bleak. At any rate, keeping taxes low by simply not having taxes be high enough to pay the bills is in the best Texas conservative tradition of George W Bush but it doesn’t work for state government during a recession.