Stimulus-Hating Gov. Rick Perry Used Stimulus to Balance Texas Budget

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Gov. Rick Perry used federal stimulus money to pay 97 percent of Texas's budget shortfall in fiscal 2010--which is funny, because Perry spent a lot of time talking about just how terrible the stimulus was.  In fact, Texas was the state that relied most heavily on stimulus funds, CNN's Tami Luhby reports.

"Even as Perry requested the Recovery Act money, he railed against it," Luhby writes. "On the very same day he asked for the funds, he set up a petition titled 'No Government Bailouts.'" It called on Americans to express their anger at irresponsible spending.

Thanks to the stimulus funds, Texas didn't have to dip into its $9.4 billion rainy day fund. Still, now that the stimulus is spent, Texas, like many other states, is facing severe cuts--$31 million must be carved from the budget.

  • Right, the 'Texas Miracle' Matt Yglesias writes at Think Progress.
This is one of the areas in which the political economy of the United States has had its most severe breakdown. Over the past year, conservatives have simultaneously complained about inadequate job growth and excessive public sector employment even though public sector employment has been declining and offsetting private sector job growth. At the same time, conservative state-level politicians who would have been in disastrous shape if not for the American Recovery and Reinvestment Act have been running around the country pretending to believe that it’s a huge burden on them.
  • Still Want Texas to Secede?  ""[F]or all the conservative celebrations of the triumphant Texas model, most of the successes are a myth, while the rest was covered up by federal spending Texas' leaders claim to find offensive," The Washington Monthly's Steve Benen points out. "For quite a while, leading conservatives argued the rest of us were just confused--if only everyone else, including D.C., would simply follow the fiscally responsible example set by Texas, everything would be fine. We don't need 'big government,' they said, we just need to do what Rick Perry has done."
  • Great Primary Fodder, Brad writes The Crossed Pond. "At some point, it seems that Rick Perry will become a formidable candidate for President. If not this cycle, than the one after. Which is why it’s at least worth noting this story, if for no other reason than it is sure to be used against him in any future Republican primary."
  • 'Everything's Subsidized in Texas' The New Republic's Jonathan Chait writes. "For several years now, Texas has been the conservative model for responsibly budgeting by avoiding 'big government.'" Examples: Rich Lowry, Arthur Laffer, Newt Gingrich. "Of course, now we know that Texas is facing a massive budget shortfall," Chait writes, but conservatives have a backup. Chait points to Kevin Williamson, who approvingly said that Texas wouldn't touch its rainy day fund, despite the bad economy, because the state is doing the "stand-up thing." Chait notes, "If by 'stand-up thing,' you mean 'use federal money to hide your deficit,' then sure."
  • This Is Not a Budget Crisis, Chris Edwards argues in the New York Times.
As the stimulus funds peter out in coming years some claim Texas will face a giant budget gap of up to $27 billion. But the comptroller's new data projects that tax revenues will grow 7 percent in the coming cycle, and overall state revenues will remain essentially flat. A flat budget is not a crisis. ... Under Gov.Rick Perry, the Texas government feasted before its current recession-induced diet. Total state spending jumped 69 percent from the 2000-01 budget to the 2008-09 budget. So while the budget is flat now, it's after a large run-up. Texas and many other states are said to still have budget 'shortfalls' going forward. But partly these shortfalls just reflect bad forecasting. ... If there is a real fiscal crisis in the states, it is not due to the economic slowdown. Instead, it is the huge unfunded obligations that state and local governments have built up in their pension and retiree health plans that will take major changes to fix.

This article is from the archive of our partner The Wire.