California

Texas Outspending California?

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Rick Perry will shoot you.

Last month Paul Krugman, the doctor, messed with Texas after state Comptroller Susan Combs estimated a shortfall in revenues for the 2010-2011 budget. The Nobel laureate made the best possible case that the looming deficit in Texas, long held up by free marketers as the Gallant to California's free-spending Goofus, had demolished the idea of cutting state spending as a ticket to prosperity, opining, "If the theory can't make it there, it can't make it anywhere." Advocates of big state spending had a good old time deriding Gov. Rick Perry, the big-talking executive who had been concealing the state's dire fiscal condition.

But something didn't add up. How could a drop in projected revenues of 2.9 percent – far below the 27 percent drop California experienced between 2008 and 2009 – account for a deficit pegged by Krugman (though not by Combs) at $25 billion?

At least J.R. spent his own money.

Bill Murchison of the Institute for Policy Innovation suggests one reason: In Texas they do everything big, even spending:

Texas' state government spending from all the funds at its disposal rose nearly 300 percent between 1990 and 2010. At the same time population was growing just 115.5 percent. In other words, spending as a percent of the population nearly tripled in 20 years. Health and human services spending rose 406 percent during the period, education spending 276 percent.

Murchison seems to be getting those numbers from a report [pdf] by the Texas Public Policy Foundation, which in turn is drawing on figures from the Lone Star State's Legislative Budget Board. From that report:

In 1990, the entire budget for the state of Texas was $23.3 billion…

For the most recently completed fiscal year, FY 2010, the state's total appropriations amounted to $92.7 billion, a growth of almost 300 percent in the All Funds budget.

Since 1990, the state's population has grown from 17 million to approximately 25.4 million, an increase of 49.1 percent. Inflation, as measured by the Consumer Price Index, has increased by 66.4 percent over the same period. Combined, the sum of population growth plus inflation between 1990 and 2010 totaled 115.5 percent; state spending increased by roughly two-and-a-half times that amount.

That rate of spending growth doesn't just beat California's. State expenditures of $92.7 billion in 2010 mean Austin is actually outspending the Sacramento, which logged $86.6 billion in expenditures in its 2010-2011budget. The growth rate is even higher than California's was before the recession threw cold water on the Golden State. As Reason Foundation's Adam Summers wrote a while back, "Since former Gov. George Deukmejian's final budget in Fiscal Year 1990-91, California's spending has skyrocketed 181 percent. Spending nearly tripled from $51.4 billion in FY 1990-91 to $144.5 billion in FY 2008-09." Texas, by comparison, nearly quadrupled its spending.

Texas has had plenty of defenders since the budget debacle came to light. At newgeography.com, Tory Gattis notes two points in favor of Texas:

• there's no such thing as a shortfall in Texas, since we use zero-based budgeting (i.e. we start from nothing building every budget with no assumptions from prior years), and

• our unemployment rate, which is better than the national average, is even more impressive when you consider our huge population gains and the jobs we've had to provide just to keep up with it.

Some sidewindin' polecats ran up state spendin'!

It would be opportunistic to dismiss Texas as a big government failure now, after using it as a model of fiscal restraint, but don't these numbers cause the same problem for the Krugmanites? From what little I know of Texas geography (isn't it next to that country Cantinflas came from?), I gather Austin is less in thrall to "the complete dominance of conservative ideology" than the rest of the state. Texas contains multitudes. Could it be the nightmare of austerity Krugman claims, and also a nightmare of public profligacy the spending figures indicate? Can Razzles be a candy and a gum?

And where can the Texans be spending all that money, when Krugman says the state's health care system does nothing but "impose great pain" and its education policy is designed "to shortchange the future"? In fact, Texas public schools don't educate kids at all; they just chain them in a line and have them break rocks to build private toll roads. The Department of State Health Services just sends one bloody chicken head to needy cancer patients—that's it! And if you try to go on unemployment in Texas, the Rangers come to your house and shoot you.

So why do people keep leaving California and moving to Texas?

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88 responses to “Texas Outspending California?

  1. So why do people keep leaving California and moving to Texas?

    Because there ain’t any gold in those thar hills anymore, son!!!!

    1. So why do people keep leaving California and moving to Texas

      Jobs and cheap housing.

      it should be noted that Texas growth is even more astounding considering what a shit hole it is.

      I am not talking about the culture or people…i am talking about it being flat, and its oppressive heat.

      California with all its troubles is a beautiful state. Texas is not.

      1. Re: joshua corning,

        I am not talking about the culture or people…i am talking about it being flat, and its oppressive heat.

        Hey! That’s what makes the hog huntin’ fun!

      2. It isn’t flat everywhere…. ::grumble::

        1. Nothing is flat anywhere, but compared to many other places… it’s pretty flat. Well, except Kansas, scientists did prove that Kansas actually was flatter than a pancake.

      3. I am not talking about the culture or people…i am talking about it being flat, and its oppressive heat.

        No need to leave that part out.

      4. …it being flat

        That’s weird, I’m looking out my window at the hill country right now

        1. Compared to where I live, hill country is still flat.

          1. Compared to the Himalayas, where you live is flat.

      5. Shit hole? I guess you preffer the hommies at South Central LA or the friendly muggers in Camden, New Jersey.

        1. Yeah, because Texas doesn’t have gangs or violent crime, right?

          1. Texas is unfortunate proof of what happens when Old West reenactors are given real six-shooters and moonshine.

        2. Never been to East Dallas, huh?

      6. Its true… the weather sucks, the bugs suck, the wildlife sucks, the plantlife sucks… but its still better than California.

    2. Because hippie chicks smell, and hippies are illegal in Texas.

      1. And winning. Ooooh.

      2. You have definitely never walked Guadalupe between 20th and 26th in Austin.

        1. I second this. All the hippies are about twenty years old and begging for money. Ugh.

      3. Because hippie chicks smell, and hippies are illegal in Texas.

        I guess you have never been Austin.

        not only do they have hippies….but because of the heat and humidity their hippie chicks smell even worse.

  2. our unemployment rate, which is better than the national average, is even more impressive when you consider our huge population gains and the jobs we’ve had to provide just to keep up with it.

    I really hate this mentality. It’s like the liberal they asked about the efficacy of the stimulus awhile back who said the government had to work hard to keep the economy and employment numbers where they were, nevermind improvements. The government can only hurt the economy. Businesses and people create jobs, not government. The bet it can do is get out of the way.

    1. Dogma…proof?

  3. In fact, Texas public schools don’t educate kids at all; they just chain them in a line and have them break rocks to build private toll roads.

    Uh, I wish they would do at least that, so kids can learn a trade for a change. Public Schools here are nothing more (and certainly much less) than “glorified” day care centers.

    1. Public Schools here are nothing more (and certainly much less) than “glorified” day care centers.

      AND jobs programs.

      1. Public Schools are nothing more than a retirement ponzi scheme that uses children as human shields.

        1. Re: The Gobbler,

          I like your definition even better!

        2. That’s pretty much teh awsum, Gobbler

          1. I’ve been spending more time with the Widow White lately. She helps me see things clearly.

            1. Why did this autopopulate as Pip?

              1. I wouldn’t worry, Gobby. Last week I kept being told by the squirrels that I was Coyote Blue. It even filled in a url (or maybe an email address).

  4. What is California spending in relation to its GSP (Gross state product) and what is the GSP of Texas in relation to its spending?

    My guess is that Texas has a lower spending to GSP rate.

    Also it is easier to start a business in Texas therefor there is more business and more tax revenue.

    Regulations do hurt tax revenues. No idea why you run from this fact. Didn’t Reason make a few videos on the subject with Drew Carey?

    1. If Texas can’t make a go of it with a lighter regulatory burden, then the Lone Star state’s deficit just made a case for greater state regulation, in addition to its case for greater spending. Nice going, Texas.

    2. CA 1,891,363
      TX 1,244,695

      if tx spending is 92.7 CA would spend like 140. which is less then FY 08-09 so much less then FY 2010 year I would assume.

      1. GSP from 2009 so I imagine that TX has reduced that spread some too.

  5. One thing I have seen discussed that this article doesn’t directly touch on is growth of Medicare/Medicaid vs. revenue growth. I’ve heard something like $8B year-over-year growth in Medicaid in Texas. This is federally required spending. Not sure you can blame Texas’ government for that.

    I know FL has been cutting everything they aren’t constitutionally/federally required to spend on and still $3.5B in the hole — mostly due to Medicaid requirements. Its almost like Perry’s hyperboles had some basis in fact last year.

    1. +1

      This blog post is really incomplete without explaining how much of the spending increase is directly attributable to federal health related mandates.

  6. jobs program? but govt doesnt create jobs ree tard.

    1. Then why was the Stimulus so damned successful?

      1. Because it can save jobs.

        Especially if they’re government jobs.

      2. It was only successful if you got an exemption.

      3. It was only successful if you got an “explanation”.

  7. “Texas has had plenty of defenders since the budget debacle came to light.”

    So I guess that means there isn’t any budget debacle, is that your point? I guess that over the next couple of years we’ll find out. My own feeling is that Texas is not as screwed up as California, but I’d still rather live in a state where 40+% want to legalize marijuana. When will we see that in Texas?

    1. Marijuana arrests account for over half of all arrests in Texas. 97% of these arrests are for possession only.

    2. When will we see that in Texas?

      Possibly sooner than in California.

    3. There are very few places that you have to worry about being busted with Teh Killer Weed in Austin. And the weed is cheaper here than in my former Napa-area home. Or so people tell me, I wouldn’t know personally, of course.

  8. our unemployment rate, which is better than the national average, is even more impressive when you consider our huge population gains and the jobs we’ve had to provide just to keep up with it.

    Uh, people move once they’ve got a job. They don’t usually move when they’re jobless and then start looking for a job.

    1. So you say.

    2. Right, so there are enough jobs to employ both the locals, and to import new workers.

  9. I gather Austin is less in thrall to “the complete dominance of conservative ideology” than the rest of the state.

    There’s the local culture in Austin (solidly lefty-lib). There’s the standard-issue urban-libs from the big population centers, too, like Houston, Dallas, San Antonio, etc.

    The center of gravity in Texas has been shifting even further east, away from the “leave-us-alone” West Texan ethos toward the more, erm, activist so-con Deep South ethos.

    And your spending comparisons are gross dollars, Tim. Give them to us in per capita dollars, or even as a percentage of GSP. Gross dollars are meaningless as a comparison.

    1. Texas spending per capita is $3740 and California’s is $2342. Looking at the per capita amounts just makes things look worse.

  10. And if you try to go on unemployment in Texas, the Rangers come to your house and shoot you.

    In previous years, this was pretty unimpressive though, as the Rangers couldn’t win a game to save their lives. This season, they might actually hit something if they try and shoot you.

    1. A couple months ago the Rangers with shields became honorary Chuck Norrises. So they may just roundhouse kick your welfare takin’ head off.

  11. Can Razzles be a candy and a gum

    I swear that never gets old. Seriously. Nice post, Tim.

  12. Given that we had rolling blackouts this week, I’m pretty sure Texas actually turned into California.

    1. Was it “Texas” or the area serviced by El Paso Electric which also includes a good portion of southern New Mexico?

      1. All of Texas.

        1. What I don’t understand is, if the grid here in Texas can handle August, how does it fail now? I’m sure a politician is at fault.

          1. My house in the Houston area going off repeatedly on Wednesday.

            I read that it was not a crisis of demand, like you get in August, but a crisis of supply, since several power plants “tripped”. I do not know what caused them to “trip”. Maybe something related to the ice storm.

            1. I do not know what caused them to “trip”.

              Mushrooms?

          2. As I recall, Texas power companies take their plants down for maintenance in the winter so they can operate full bore in summer. A very cold winter puts demand on fewer operating power plants hence need for brownouts.

          3. Here’s one perspective.

            ERCOT, or the ‘Electric Reliability Council of Texas’ is the think tank or quasi-government organization that directs and creates operating guidelines for all the power companies in the state. This is the organization behind the idea of creating artificial power outages in order to ‘avoid other outages.’

            1. We had to black out the village in order to light it up.

      2. My understanding is that it’s statewide (other than Cowboy Stadium).

        I’m in Austin, and we had blackouts all over the city Wednesday morning. Shaving by candlelight is neither romantic nor fun.

        Plus, my heater may be natural gas, but the fancy controller on it needs electricity.

        1. No blackouts in my neck of the woods…Lufkin

        2. I’m in Austin, and we had blackouts all over the city Wednesday morning. Shaving by candlelight is neither romantic nor fun.

          If it hadn’t have been for Thomas Edison, we’d all be watching television by candlelight.

    2. Look no further then the Obama Administration, and their persistence to shut down Coal-Fired power plants, and make it impossible for new power plants to open, to help supply the increasing demand for energy.

      It’s another prime example of Big Government causing more and more problems by trying to “Save the world”.

      http://www.prisonplanet.com/fu…..erica.html

  13. So why do people keep leaving California and moving to Texas?

    Can’t stay on unhealthy hosts forever.

  14. “…one bloody chicken head to needy cancer patients…”

    Snark is the last resort of the scoundrel

    1. We don’t care if it’s the first act of “Henry V.” We’re leaving!

    2. So says the jackass tax eater.

  15. “Can Razzles be a candy and a gum?”

    Can Krugman be a dick AND an ass?

    1. I think the question answers itself!

  16. Does this take into account that Texas budgets for 2 years at a time? I am uncertain but a friend from CA said that their budgets are yearly which would certainly make a difference when comparing if true.

  17. Death Star claims more victims.

    http://www.wtae.com/r/26749437/detail.html

  18. All right, these statistics are truly worthless, and I shouldn’t be the first person to notice it. The Texas Policy Foundation notes the population increased by 49.1% and inflation increased by 66.4%. They then go on to say this totals 115.5%, i.e.
    (percent change in size of population) + (percent change in value of a dollar) 49.1% + 66.4% = 155.5%.
    No.
    Here’s the right way:
    (proportionate size of change in population) * (proportionate change in the value of a dollar) =
    1.491 * 1.664 = 2.481 = 248.1%
    That is to say, we would expect Texas total spending to be 248.1% of what it was if per-capita spending were kept steady in real-dollar terms.
    The state budget, on the other hand, is 400% what it was (300% increase + 100% base).
    That’s still a big spending increase, but it’s not quite as shocking as the original numbers suggested.

    1. Those statistics can be used as a torturing device.

  19. The state-level only figures are also likely to be misleading. A state can hold down its budget by pushing costs down to counties and municipalities.

    Kind of like the way I pay for fly-fishing trips by making my wife buy the groceries.

    What we need, here, are (1) per capita figures that (2) take into account spending at all levels of government.

  20. As other posters have noted, a lot of these numbers are pretty useless. Could you try consulting with De Rugy before posting?

  21. A year or two back, I looked into Texas spending increases and most of it was actually linked to medicare and eduction. The Feds require matching of medicare and federal education dollars come with all kinds of strings that drive further spending. The prescription drug benefit probably drove most of that increase in spending.

    Moreover, I think that every single budget cycle in the last 20+ years has started with a deficit. State law requires the comptroller general to issue highly pessimistic deficit projections so the budgeting process always starts out in a hole.

    What’s really interesting in comparing California and Texas is how much Texans get for their money. Californians like to console themselves that while they pay high taxes, they get superior results. Except they don’t.

    California has the fewest emergency room beds per capita in the nation. Corrected for demographics, Texas has better education outcomes, especially for minorities. Crime is better overall and poor people are a lot safer in Texas. Even though Texas has an influx of illegal aliens comparable to California’s, in Texas, you don’t see like the level animosity towards illegals you see in California.

    There is some tipping point beyond which increased taxes and spending begins to return diminished, instead of increased, services. After that point more spending just aggravates the problems it is supposed to fix. California seems to have passed that point long ago. Californians can’t even console themselves that the taxes they’ve paid have at least improved conditions for the most needy.

    1. No, No, No! California is a lovely place. Everybody, go to California! You wouldn’t like Texas at all.

  22. in Texas, you don’t see like the level animosity towards illegals you see in California.

    Unless you’re a young, white female.

  23. I don’t think I am mistaken, but there seems to be some faulty math here. If population increased 49% from 1990 to 2010 then the $23.3B budget would equivalently increase to
    $34.7B. Adding a 66% inflation, spending should be equivalent to $57.6B, which would result in an overall increase in spending of 160%. (92.7/57.6), not 250%. Still WAY too much when Texas boasts of being fiscally conservative.

  24. Texas is a terrible place – just as so many above have said. It’s flat, it’s hot, it’s full of bullshit artists, ne’er-to-do-wells, and hustlers. In short it’s a complete shithole. DON’T COME HERE!

  25. I’d still rather be in Texas. Maybe not this winter, but for the other times of the year.

  26. While I certainly favor reduced spending in Texas, I think some of the critics are overlooking a big point.

    How is it that Texas consistently waffles between close-to-balanced and surplus budgets and they do not have an income tax, despite both their sales and property taxes (locally-adjusted) being lower than California’s? This is without even factoring in that CA has a roughly 9% corporate income tax and Texas has basically none, except for an extremely limited franchise tax.

    Basically what I’m getting at is that it’s not necessarily problematic that Texas has tons of revenue if their net tax burden is much lower.

    Isn’t this a win-win for the people who want “good government”?

    1. Also, Texas budgets in two year chunks.

      That figure Krugman is peddling is a little more than misleading. I’d call it a “lie,” but I’m sure the layers and layers of fact checkers at the NYT wouldn’t allow such a thing…..

  27. clearly they’re spending all that money on free markets and small government.

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