Yesterday was a productive day for Texas Governor, Rick Perry. Not only did he meet with the President to discuss the recent border crisis, he also had this op-ed published in the Chicago Tribune espousing the virtues of fiscal conservatism.
Illinois and Texas each faced challenges in 2011. The national recession had damaged both states’ economies and revenues were projected to be insufficient to cover anticipated spending.
What happened next is a clear demonstration of the differences between blue states and red states.
In Texas, we set priorities on our spending, identified where we could save and made tough choices about where we would cut. We turned in a budget that was balanced, that met the most critical needs and did not raise taxes on anyone.
Illinois raised taxes.
Today you can see how those decisions have played out.
Texas was able to restore in 2013 what was trimmed in 2011, provide major tax cuts to employers, and still have money left on the table. Our rainy day fund is projected to hold roughly $8 billion, even after deductions to fund water projects and beef up our transportation infrastructure.
Illinois still has a budget that’s far from balanced, with billions in unpaid bills. It’s uncertain how the courts will rule on one of the worst-funded state pension systems in the nation. The Illinois legislature was wise enough this year to turn away appeals to extend the 2011 tax hike, but it still hasn’t made the tough decisions necessary to bring spending under control.
There are very real consequences of each state’s actions.
In 2014, Texas attracted Toyota’s world headquarters from a blue state, California.
Earlier this year, Caterpillar announced it will close three Illinois plants and consolidate production at an existing factory in a red state, Michigan.
Most important, by December of 2011, Texas had replaced all the jobs it lost during the recession. As of May, we had 880,000 more jobs than we had at the peak level before the downturn.
Illinois still needs to add 190,000 jobs just to reach the level it had in 2008.
Jobs really are the most important part of any equation involving government. Quality jobs are the foundation of strong communities; and strong communities are at the core of strong states.
Over the past decade, Texas has added more than 2 million jobs. During that span, Illinois has lost 7,000. Texas grew jobs at a rate of 3.4 percent over the past year — fastest among the biggest states. Illinois’ rate of job growth was just .3 percent — slowest among the biggest states.
I point out these types of dichotomies whenever I visit places like New York, California or Illinois to illustrate to business owners that there’s a better way to grow your business, and that way can be found in Texas.
But I also travel to spread the word about why our system works, and how it can work elsewhere. States like Florida, South Carolina and Wisconsin have instituted Texas-style reforms and they’re starting to see benefits.
There’s nothing secret or special about our approach.
We keep taxes low, so employees and employers get to keep more of their hard-earned dollars. We put in place smart, efficient regulations that don’t bury employers in red tape. We’ve reformed our court system so it doesn’t allow for frivolous lawsuits. We’ve made our schools much more accountable, helping to create and maintain a world-class workforce ready to fill the needs of any employer who moves to our state.
Those bedrock, fiscally conservative policies are the foundation of the success we’ve experienced in Texas. They can work as a foundation almost anywhere. But you have to accept that government should limit itself to core functions. When government takes over huge segments of the nation’s economy, as the Obama administration has done through the Affordable Care Act and Medicaid expansion, it’s a recipe for disaster.
In Texas, we rejected President Barack Obama’s demand to expand Medicaid because we know it’s a broken system that isn’t built to handle its existing caseload, let alone a massive crush of new people. Expansion will lead to higher costs for states already struggling to meet budget demands and will crowd out other essential government functions.
Other states have rushed into Medicaid expansion despite massive problems with their existing programs. By the time expansion is complete in Illinois, one out of every four Illinoisans will be dependent on Medicaid, which was only intended to serve as a safety net for those most in need. It’s troubling that Illinois officials only recently realized that roughly 250,000 Illinoisians received Medicaid services for which they did not qualify.
Though we’re in competition, I know a strong Illinois is vital to keeping our nation strong. It’s my fervent hope that Illinois will follow our lead, and the lead of other red states.
We’ve shown there’s a way. All that’s needed is the will.