Rick Perry's Texas Fantasyland

Rick Perry's Texas is a job-makin', low-taxin' oasis of economic growth. It's also a fantasy.

An October 2005 analysis by economists at the Federal Reserve Bank of Dallas looked closely at how Texas recovered from the post-9/11 recession. They concluded that the Texas economy was significantly slower to heal and more jobless in its rebound than the national recovery for a variety of reasons.

Perry's critics often say he benefits from all that "oil in the ground," but oil and gas jobs have waned. Meanwhile, a wider shift from manufacturing to government employment—especially all those education jobs added before Perry helped gut them—required major retraining of laid-off workers. According to the Fed study, that shift left the state's economy more susceptible to the punch it's taking now and to the roundhouse represented in the recession's potential double-dip. But in the end, the report called Texas's poor performance in overall job creation "a bit of a mystery."

It was less mysterious in a report published two years later by the conservative Kauffman Foundation. The group's "New Economy Index" measures growth and innovation in information technology. It examines an array of measures—patent applications, initial public stock offerings, immigration of knowledge workers, workforce education and other indicators—to see where the new-technology economy is hot and where it isn't.

Of the 50 states, Texas earned a second-tier overall ranking in the 2007 report—14th place—but with low marks in the areas of workforce education (34th), high-tech manufacturing (35th), and desirability as a destination for knowledge-industry immigrants (44th). The 2010 version reported that Texas had slipped from an overall national ranking of 14th place in 2007 to 18th in 2010. And though Texas got a much better mark as home to high-tech manufacturing, moving up from a national rank of 35th four years ago to 10th place in 2010, Texas's overall rank was dragged down by rankings in the 40s in two key areas: workplace education and the immigration of knowledge workers.

What if Perry's critics are right? What if a strong public school system and prestigious university research programs were keys to Texas's economic success? If those legs of the Texas miracle are being sawed off, what's left?

Another important plank in Perry's Texas miracle platform is his portrayal of Texas as a low-tax state. The way he tells it, low state and local taxes are drawing businesses and people to his state. Like so much in Perry's portrait of Texas, the notion might be more wishful than real.

Weinstein now confines himself to the economics of energy, but for 25 years, he was the state's best-known business-recruitment and expansion consultant, hired by cities all over Texas. During that time, most tax incentives in Texas amounted to state government giving local governments permission to give away their own tax bases to woo companies. It's a practice Weinstein now questions.

"All the research on economic development I'm familiar with over the last 60 years has found that state and local incentives are a fairly minor factor in the business-site-selection calculus," he says. "And that's understandable because state and local taxes for a lot of companies are fairly minor costs of doing business."

Plus, he says, "every other state does the same thing."

But, as Weinstein points out, cutting those local taxes can hurt the localities that do it.

"[Those businesses are] still going to have kids in school," he says. "They're still going to need the roads and the water. Somebody else has got to pay for the cost of providing services to that business that isn't going to be paying its fair share of the taxes."

Despite the giveaways, small government still doesn't mean scant government in Texas. It means lots and lots of small government and accompanying taxes. Sure, a new Texan might relish the paycheck bump owed to the state's lack of income tax. But a typical Dallas property owner pays property taxes to the county, city, local schools, county hospital district, a county educational services district, and a community college district, along with sales tax to the state, sales tax to the regional transportation agency, and a plethora of local, county, regional, and state fees and excise taxes.

In addition, a host of new tax-related entities, mainly invisible to the public, has been created in the past 25 years, including municipal utility districts, tax increment financing districts, redevelopment zones, municipal management districts, and more, most of which have the power to borrow money, all of which must be repaid by taxes.

So is Texas truly the low-tax state Rick Perry paints it to be compared with the other 49? Judging by the few available comprehensive surveys, the answer is one that should be familiar by now: No.

The Council On State Taxation (COST), which represents large corporations on state tax issues, hires the accounting firm of Ernst & Young every year to study total state and local business taxes. Their 2010 study puts Texas at 19th for states with highest business taxes as a percentage of gross state product.

The Tax Foundation, a conservative think tank, gives Texas good marks for total state and local tax burden per capita—39th place, with 50th marking the lowest tax burden. But the Tax Foundation ranks Texas fifth-worst for corporate taxes, a ranking that reflects a plethora of excise, licensing, and other costs, taxes, and negative incentives that businesses must deal with in Texas. The state also claims the third-highest effective property-tax rate in the country after New Jersey and New Hampshire, according to the Tax Foundation.

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13 comments
Crazyyy_Girls_90
Crazyyy_Girls_90

@money......This is crаzy...Sistеr's girlfriеnd mаkes 73 hоurly оn the PC. Shе hаs bееn firеd frоm wоrk fоr 11 mоnths but lаst mоnth her pаychеck wаs 7756 USD just wоrking on thе PC for a fеw hоurs. Rеаd аbоut it on this wеb sitе......http://alturl.com/nguui

Mr B
Mr B

Significantly, TexASS and AlASSka are the two biggest welfare receiving states in the Union. Naturally, both are Republican.

Perry objected to President Obama's stimulus program but eagerly took a huge check from the Federal government in order to lessen the state's deficit. But anyone who knows Repukeblican politricks would not be surprised at that.

Community Organizer
Community Organizer

I find it impressive that Gov. Rick Perry can somehow convince people to get off their azz and go to work for low pay, rather than just remain at home collecting welfare at taxpayers expense.

Well Done!

Shaun Costello
Shaun Costello

PERRY AND GOP HOPEFULS CRAWL ON KNEES BEFORE RELIGIOUS FANATICS - BEGGING FOR APPROVALIt's a sad commentary to the state of our Republic, that these GOP Presidential hopefuls feel the need to come crawling before a gathering of Evangelicals in the hope of gaining approval and support. Evangelicals, most of whom seem to have one foot in a staight jacket, have taken over the selection process for the Republican Party. This is exactly the kind of political mayhem that Jefferson warned us about, and took action to prevent. The nominee of the Republican Party has to cowtow to religious fanatics in order to get nominated. The Evangelical agenda includes; the reversal of Roe v Wade, prayer in public schools, the end of stem cell research, making homosexuality a crime, and legislating a National Religion - theirs. Oh, and influencing Cabinet appointments. For Secretary of State - how about Robert Tilton, or Jimmy Swaggert, or Pat Robertson, whichever one of them isn't under current indictment for tax fraud. The clock is ticking for the Christian Storybook. Only right wing America takes them seriously. The rest of the world is laughing.Read this:http://shauncostello.wordpress...

Strelnikov
Strelnikov

I don't feel Perry will make it....from what I can tell, the GOP has two "finisher" candidates, one they want, the other the base wants. The Central Committee's man is Mitt Romney; the average GOPster seems to want Ron Paul. We will see if the "Paultards" win.

All that written, this is a good article on how much of a BS artist Rick Perry is, and how Texas is trying to catch up to California.

mrearlygold
mrearlygold

perry is just another necon scumbag.

Vote Ron Paul in 2012 or more of the same. If you like what the country has become elect another democrat or republican. If you desire real freedom and real opportunities, rally behind Ron Paul who is as close to a founding father as we're ever going to see. Time is running out!

DonnaThompson
DonnaThompson

..........I can't believe....My best friend's mom makes $77 an hour on

the computer. She has been out of job for 9 months but last month

her check was $5487 just working on the computer for a few hours.

Read about it here CashMany.com .......

Debra2
Debra2

Well... some GENERAL comments...I didn't vote in the last general election. I decided that the American public was not voting for a president ; it was choosing a King.Barack certainly got that feeling too, given the way he has been behaving recently.In about ten years of work against the death penalty, I noticed that increasingly, the FEDERAL courts were bending farther and farther backwards to insist on STATE'S RIGHTS.After a while, the inevitable conclusion is that the union has fallen apart, is falling apart ?When you're IN THE MIDDLE OF IT, just how do you know ??I call the country "the disunited states" these days. Rick Perry is championing a bunch of disgruntled people (but shouldn't we ALL be disgruntled these days, the decadence goes far beyond American borders, you know, to touch Western civilization as a whole) who somewhat confusedly perceive that the long, slow rise of scientific rationalism that began during the Renaissance has FINALLY run out of steam, and is not FUELING our desire for hope/faith now. It has petered out.It kind of puts things into perspective when you try to remember that the U.S. was founded as a European UTOPIAN experiment. The United States was SUPPOSED to be pie in the sky. If that isn't a Messianic proposition, I don't know what is.I can forgive Rick Perry for sounding irrational these days when it is hard to know which side is up in our culture.As for the jobs... when the Industrial Revolution got revving, there were small numbers of people in England who RIGHTLY perceived that those AUTOMATIC machines would destroy work that would probably NOT BE REPLACED. They were called Luddites, and THEY started destroying the machines. They were brutally repressed.MORE JOBS for MORE PEOPLE is part of the underlying expansionist logic that fuels the consumer/industrial society.We need NEW ATTITUDES towards work, and the lack of it at the time.We need to think beyond that old Protestant work ethic that was part of our utopian identity.CAN WE DO IT ? ....

Guest
Guest

I double-posted THAT?

Alexgunther
Alexgunther

Democrats who can't find anything good about our current situation in this country have no other choice but to try and convince everyone that the presidential options for 2012 are ......gasp! Even worse! you chose Obama, he lives in a fantasy land that is drowning in more debt with less jobs than 3 years ago!

Joseph
Joseph

Refuting the economists professors claim that Texas is business friendly with uncredited statements like "Does saying that Texas is "business-friendly" mean the state is unlike the rest of the country in some significant way, something important enough to make Texas more prosperous than America? Academic studies and the testimony of people involved in shaping the state's economy say no." makes this article come off like a hit piece.

President Perry
President Perry

Texas is a fantasyland because we seceded from Heaven. We're goin' back soon as the oil runs out. @PresPerry

 
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