Getting Out of Grover's Tub

Chapter 19: Where Tax Cuts are King

Here in Texas, tax cuts are king. Over the last few sessions, reforms to school finance focused on reducing property taxes—not better funding for public schools. In the end, school property tax rates were cut by 33 percent, the revenue base shifted to more regressive consumption taxes, and all new revenue was dedicated to more tax cuts—not schools. Now, built into the upcoming budget is a structural deficit of $5.8 billion by 2010-11.
What’s going on here?
In 2003, when a few lawmakers wanted to increase revenues to meet a $10 billion deficit, Grover Norquist himself landed in Austin and went to work.  His mission was to shore up weak Republicans and hold the line – his mantra then and now is “no new taxes.”  The pledge of “no new taxes” that many Republican legislators have promised is his pet project, and today more than 1,100 state officeholders across the country have signed on.
In 2003, Perry held the line and did not raise taxes.  What he did do, however, was cut 300,000 kids out of the Children’s Health Insurance Program, another 500,000 out of Medicaid and allow unelected regents to raise tuition on college students across the state.
Fast forward to 2009, when after months of meltdown over a $42 billion deficit, California Governor Arnold Schwarzenegger signed a bill that actually raised taxes to address a deficit.  As a result, Schwarzenegger was forced to defend six GOP lawmakers who angered the state Republican party by voting for a budget that raised taxes.  Thanks to the lawmakers’ attempts to find a middle ground in how to resolve the deficit, the state party attempted to censure the six Republicans who voted for the bill and the Governor who signed it.
Despite the fact that President Obama’s recent Federal stimulus package included the largest middle class tax cut in history, not a single House Republican voted for the bill. Instead, House Minority leader Eric Cantor decided to hold his economic recovery rally—on Wall Street.  Here’s a recent cartoon from the Austin American-Statesman:


Sargent © 2009 Universal Press Syndicate. Reprinted by permission. All rights reserved.

How did tax cuts for the wealthy get such a hold on the Republican Party?
The story goes back to Lee Atwater.  In 1980, Atwater was the chief author of the latest Southern strategy.  Since Nixon, Republicans had charted national victories by holding the eleven states of the Old Confederacy, then adding more in the Midwest.  Among Atwater’s chief political protégées were young college Republicans Grover Norquist and Karl Rove.
In an interview with a political science professor at Case Western Reserve University, after being diagnosed with fatal brain cancer, Lee Atwater opened up and explained more about how his strategy evolved and specifically how tax cuts became king: “You start out in 1954 by saying, ‘Nigger, nigger, nigger,’ ” said Atwater. “By 1968, you can’t say ‘nigger’ — that hurts you. Backfires. So you say stuff like forced busing, states’ rights, and all that stuff. You’re getting so abstract now [that] you’re talking about cutting taxes, and all these things you’re talking about are totally economic things, and a byproduct of them is [that] blacks get hurt worse than whites.”
Back in 1998, at our request, then Texas Comptroller John Sharp produced a report titled “Where We Stand,” which ranked Texas amongst the 50 states.  Since then, it’s become harder to get the Comptroller to produce the report, with the most recent version coming out three years ago.  So our office has undertaken the task of updating the report in a document titled “Texas on the Brink.”  It tells the story of how Texas compares to other states in critical areas like public education, access to capital, home ownership, health care, environmental protection, workforce development, public safety, and other services.
Twenty five years after Rick Perry first took the Texas stage, where tax cuts are now king, here is where we stand among the 50 states:

Category Ranking
Tax Revenue Raised Per Capita 49th
Tax Expenditure Per Capita 50th
Progressivity of Tax Revenues 44th
Average Teacher Salary As A Percentage of Average Annual Pay 49th
State Aid Per Pupil in Average Daily Attendance 47th
Scholastic Assessment Test (SAT) Scores 46th
Percent of Population 25 and Older with a High School Diploma 50th
Percent of the Population Without Health Insurance 1st
Percent of the Population with Employer Based Health Insurance 46th
Percent of Uninsured Children 1st
Home Ownership Rate 43rd
Homeowner’s Insurance Affordability 50th
Air Pollution Emissions 1st
Rate of Incarceration 2nd

Perhaps Lee Atwater and Grover Norquist’s greatest legacy here in Texas is the percentage of Texans that go to vote—fewer Texans now participate at the polls than in any state in America.