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Old 07-02-2009, 02:42 PM   #1
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Default Texas shows 'em how to do it.

Interesting interview. With California and the liberal management just about bankrupt, the story of how a couple of states have not succumbed to liberal economic policies will be compelling.

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Rick Perry Explains How It's Done

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July 1, 2009 Posted by John at 9:51 PM
In a time when many states are experiencing fiscal crises and economic decline, one state stands out above all others as a success story: Texas. I recently heard Governor Tim Pawlenty say that during the year or so before job growth turned negative and the country as a whole was still adding payroll jobs, 53% of all of the jobs created in the U.S. were created in one state: Texas. No wonder that Texas' government is running a surplus and its economy remains strong despite trying times.


At PJTV, Glenn Reynolds has a new show called InstaVision. Today he interviewed Texas governor Rick Perry. It was a fascinating conversation, in which Perry explained the "secret" behind Texas' economy and denounced the Obama administration's cap-and-tax bill. Glenn and Governor Perry talked about the tea party movement and upcoming festivities in Dallas, too. Go here to watch the interview.

InstaPundit has lots of tea party coverage, too; contrary to some predictions, the tea party movement is going strong.
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Old 07-02-2009, 03:22 PM   #2
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Great link!!! So there is hope :-)
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Old 07-02-2009, 03:41 PM   #3
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I forget from time to time that Governor Goodhair knows how to talk, then I listen to him for about two seconds and I'm not sure it matters.

Anyway, what he does best is very little. Mostly I think he just collects campaign funds from his friends and doles out little goodies as best he can.

The shame of Texas is that our legislature can't learn to do as little as Perry.
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Old 10-15-2009, 01:47 PM   #4
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Just another good reason to say NO to the guvment.
http://www.popularmechanics.com/tech...y/4333893.html
Quote:
Lone Star Energy: Why Texas Will Resist the Call for a Unified Grid

A recent proposal to link the eastern, western and Texas grids together to create a national, alt-energy-friendly supergrid has sparked the interest of utilities and energy insiders, such as former energy secretary Bill Richardson. Can a high-tech substation in New Mexico create a smarter, unified grid? Not if Texas doesn't cooperate.
By Jennifer Bogo
Published on: October 15, 2009

(Photograph by Adam Gault/Getty Images)


At first glance, a recent proposal to link the lower 48's three electrical grids—the Eastern, Western and Texas Interconnects—seems like a no-brainer (technological hurdles excepted). The Tres Amigas "superstation" proposed for Clovis, N.M., would extend the reach of renewable energy, finally allowing wind power from Kansas to flow to Colorado, or solar power from Arizona to reach Oklahoma. It would also let wind and solar energy from the blustery, blistering hot plains of West Texas flow across state lines. That is, if Texas buys into it—and given a long, profitable history of keeping energy in-state, they have a lot of reasons not to.

Texans appreciate their independence. That's an axiom I heard repeated again and again while traveling across the state for PM's December feature on Texas and renewable energy. They also keep their eye on the bottom line and anything that gives them a competitive business advantage. That includes 10 miles of offshore wind rights—a remnant of Texas's era as a sovereign republic—and an intrastate grid. "Texas is different than the nation for a lot of reasons, historical and functional," Michael Webber, an assistant professor of mechanical engineering at the University of Texas at Austin, told me. "We have our own grid; that's very important. That means we can do things differently than other states."

Since roughly 1935, the majority of Texas utilities have opted to isolate themselves from interstate connection and thus from federal regulation over rates, terms and conditions of electrical transmission. Managed by the Electric Reliability Council of Texas (ERCOT), they now provide more than 85 percent of the state's electrical load, covering 75 percent of its land area. For utilities, that makes energy a straightforward market to do business in, and it allows them to be more nimble and innovative with new energy sources. It also vastly expedites the process for renewable energy developers that want to plug in to state transmission lines.

"If you go to either of the other two grids you've got to get 20-something state utility commissions to agree on something," B.J. Stanbery, the founder of the Austin-based solar manufacturer HelioVolt, says. "In Texas, we've only got one to persuade. Now, that's a big benefit." As a result, Texas has, in very short order, erected enough wind turbines to become the national leader in wind-energy production—by a wide margin. If it were a country, Texas would rank sixth in wind power. With a semiconductor industry already based in Austin, Texas could do the same with solar, according to community leader Brewster McCracken. "The fact that we have a major technology center and we're not on the federal grid means that if we decide to lead, we're well positioned to lead," he says.

Companies such as Microsoft, GE, Oracle, GridPoint and Intel saw the lack of federal red tape as an advantage, too, which is why they invested time and money in an alt-energy think tank in the state capital. Launched in December, the Pecan Street Project is a nonprofit effort to turn Austin into a laboratory for smart-grid technology. "As we develop Pecan Street and some other things, we feel like we're going to be able to have a great deal of flexibility in what technologies we can apply to the grid, how we can locate them and the willingness to support their application," says John Baker, Austin Energy's chief strategy officer. That's great news for companies who want to test out smart-grid software in a real-world setting; it could also help Texas's utilities quickly arrive at a lucrative business model for distributed energy.

Of course, the Federal Energy Regulatory Commission could choose to waive jurisdiction over power sales in Texas if the state joins the national grid. Some wind developers out in West Texas would be pleased to have another market for their power. Texas now generates about 8500 megawatts of wind energy (three times as much as California) and has completely maxed out the existing transmission capacity. But by the time a new connection to the proposed superstation is built—or possibly even approved—$5 billion worth of new transmission lines will be ready to carry electricity from Texas's most remote areas to its urban centers. These lines will increase the system's transfer capability to 18,000 kilowatts—plus, two more private lines are already being built.

Texas is now a net importer of energy, and its industries have a particularly voracious appetite for electricity—the state consumes more power than any other. So there's a huge price-sensitive market located comfortably within its own border. Until recently, Texas's consumers also enjoyed electrical rates that were among the lowest in the nation. Then the price of natural gas spiked and fuel-free electricity began to look mighty appealing. "People that use a lot of electricity are smart to hedge their costs, and I think there's a lot of smart businessmen in Texas," Stanbery told me. So right now, Texas has a lot of incentive to remain, if not a sovereign republic, every bit as independent.
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Old 10-16-2009, 03:11 PM   #5
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53 % Wow. When you consider that most Texas live in the DFW area, it seems politicians exceptionally delivered. They obviously know the word "rural exodus"
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Old 10-16-2009, 03:36 PM   #6
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nope, most texans do not live in the dfw area. about 30% live in the dfw metro, 30% in the houston metro, 15% in the austin/san antonio metro and the rest are in what's left over.

I'd like to thank ercot for its great work. texans now pay one of the highest amounts in the country for our electricity. deregulation has taken texas from being one of the lowest cost electricity markets to the highest.

think about that next time you write the check to your electricity providor. they are getting fat off of deregulation.
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Old 10-16-2009, 03:54 PM   #7
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I meant, compared to the size of Texas a fairy good slice lives in the DFW area. Sure, there are other clusters.

What do Texans pay for the Volts ?
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Old 10-16-2009, 04:07 PM   #8
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9-12 cents/kWh
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Old 10-16-2009, 04:09 PM   #9
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And what´s the basic price ? - before you plug in a gadget
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Old 10-16-2009, 04:33 PM   #10
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that is the price at the meter.
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Old 10-16-2009, 04:37 PM   #11
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You mean, you pay 9-12 Ct. / kWh and that´s it ? Ahm 1000 kw/anno consumption = 90 $ -120 $
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Old 10-16-2009, 05:15 PM   #12
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an average size home of 1800-2000 SF uses about 3000 kWh/month, that's a monthly bill of $270-$360.
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Old 10-16-2009, 05:24 PM   #13
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Hm, what is a SF ?

Ahm. Sorry for being curious, but i think i pay way too much. How can a US (TX) household pay 270 $ for electricity when the price for a Kw/h is 9 Cent ?
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Old 10-16-2009, 05:30 PM   #14
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1 square foot (SF) = 0.092903 square metre (m²)
or
1 square metre = 10.7639104 square feet
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Old 10-16-2009, 05:38 PM   #15
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Ummmm OK
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Old 10-16-2009, 05:49 PM   #16
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OK, i don´t want to weigh in as a smart ass from germany who knows everything and everything better. I know, it can be difficult to keep the house warm in winter and to keep it cool during the summer, but 9-12 Ct. is not too much. High bills are not a guvmental problem. The price for making electricity mainly depends on the price for oil and gas and those were soaring during last years. 36000 kw per year is a big number.
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Old 10-16-2009, 08:13 PM   #17
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the national average is 9.7 cents.

electricity in texas is generated from natural gas (which is plentiful in texas), coal and nuclear. texas is also a leader in wind generation.

when return on investment was the basis of the state agency setting rates, texas had one of the lowest electricity rates in the country.
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Old 10-19-2009, 05:18 PM   #18
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Uhm. But 3000 kWh per month. Isn´t that a little too much ? That would mean the household you mentioned consumes 100 kWh a day. That means ~ 20 Vacuum cleaners with an input of ~500 W running 10 hours a day. There must be a mistake, somehow.
300 KWh / month would be realistic
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Old 10-19-2009, 06:18 PM   #19
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air conditioning (cooling) is electric. a 2.5 ton central ac unit (compressor and blower) can use around 2600 kWh each month.
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Old 10-19-2009, 06:35 PM   #20
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OK, i agree. Heating and cooling is a problem within the states, but i didn´t know that those pumps cunsume those amounts. And such units are needed for a "normal" home ?
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Old 10-19-2009, 07:32 PM   #21
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most heating is by natural gas, some by electric.
cooling ratio is 1 ton per every 700-800 square feet of house
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Old 11-01-2009, 10:44 PM   #22
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Unions and government.

http://www.powerlineblog.com/archive.../11/024850.php
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Texas, increasingly, is the economic and intellectual leader of the U.S. During the last 18 months before the current recession took hold, while the country as a whole was still creating jobs, more than half of those jobs were created in a single state: Texas.
Texas has usurped the leadership position that, decades ago, belonged to California. Today California is in decline, likely irreversibly so. William Voegeli draws the sad but instructive comparison in the Los Angeles Times:
In America's federal system, some states, such as California, offer residents a "package deal" that bundles numerous and ambitious public benefits with the high taxes needed to pay for them. Other states, such as Texas, offer packages combining modest benefits and low taxes. These alternatives, of course, define the basic argument between liberals and conservatives over what it means to get the size and scope of government right. ...
California and Texas are not perfect representatives of the alternative deals, but they come close. Overall, the Census Bureau's latest data show that state and local government expenditures for all purposes in 2005-06 were 46.8% higher in California than in Texas: $10,070 per person compared with $6,858. ...
Confronted with a stark choice between government dominance and freedom, Americans are voting with their feet:
One way to assess how Americans feel about the different tax and benefit packages the states offer is by examining internal U.S. migration patterns. Between April 1, 2000, and June 30, 2007, an average of 3,247 more people moved out of California than into it every week, according to the Census Bureau. Over the same period, Texas had a net weekly population increase of 1,544 as a result of people moving in from other states. During these years, more generally, 16 of the 17 states with the lowest tax levels had positive "net internal migration," in the Census Bureau's language, while 14 of the 17 states with the highest taxes had negative net internal migration.
That's not hard to understand. As Voegeli says, "All things being equal, everyone would rather pay low taxes than high ones." So high-tax states like California have to be able to show that their taxes are somehow worth it:
Today's public benefits fail that test, as urban scholar Joel Kotkin of NewGeography.com and Chapman University told the Los Angeles Times in March: "Twenty years ago, you could go to Texas, where they had very low taxes, and you would see the difference between there and California. Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good. The bargain between California's government and the middle class is constantly being renegotiated to the disadvantage of the middle class."
These judgments are not based on drive-by sociology. According to a report issued earlier this year by the consulting firm McKinsey & Co., Texas students "are, on average, one to two years of learning ahead of California students of the same age," even though per-pupil expenditures on public school students are 12% higher in California. The details of the Census Bureau data show that Texas not only spends its citizens' dollars more effectively than California but emphasizes priorities that are more broadly beneficial. Per capita spending on transportation was 5.9% lower in California, and highway expenditures in particular were 9.5% lower, a discovery both plausible and infuriating to any Los Angeles commuter losing the will to live while sitting in yet another freeway traffic jam.
But those higher taxes in California must be going somewhere. Why aren't they benefiting those many thousands of citizens who are leaving the state for greener pastures?
In what respects, then, does California "excel"? California's state and local government employees were the best compensated in America, according to the Census Bureau data for 2006. And the latest posting on the website of the California Foundation for Fiscal Responsibility shows 9,223 former civil servants and educators receiving pensions worth more than $100,000 a year from California's public retirement funds. The "dues" paid by taxpayers in order to belong to Club California purchase benefits that, increasingly, are enjoyed by the staff instead of the members.
No doubt similar studies in other high tax states, like my home state of Minnesota, would show the same thing: taxpayers aren't getting anything in particular for their money, likely less than citizens in other states, but public employees are doing very well indeed. This explains why public employees' unions have become the Democratic Party's most loyal supporters, while those who are not on the public employee gravy train increasingly are packing up their belongings and moving to lower-tax states like Texas.
The debate, really, is over. High-tax states don't deliver a better lifestyle--not for taxpayers, anyway. One of these days, voters will figure out that the same thing holds true at the national level. Higher taxes may be OK if you're a public employee; otherwise, they're a dead loss.
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Old 01-08-2010, 10:16 AM   #23
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Who would have thought it, you don't actually have to spend more money to get higher quality education? Only a non NEA member might contemplate such blasphemy.

http://blog.american.com/?p=9120
Quote:
America as Texas vs. California, Part III

By Nick Schulz
January 7, 2010, 10:52 am


Responding to my post on Texas vs. California and the better education students get in the Lone Star State, a reader writes:
A new neighbor (former migrant worker from northern California who opened a family business, and had to move to Houston for a young daughter’s cancer treatments) reports to me that when she enrolled her 10 year old in the neighborhood elementary school, they determined that the child was at least a year behind. This is a school with an English-as-a-second-language program, and despite normal demographics which would put it in the bottom rung of schools, won an exemplary rating from the state. The mom pleaded with them to keep her daughter in the higher grade, and promised that she would work with her every day to catch her up. So far so good, but she says she’s never seen a school work her kid so hard. In her words, she thinks Texas is her family’s salvation. Not only did her younger daughter get the cancer treatment she needed at M.D. Anderson Cancer Center here, but her other daughter is now getting a quality education.
In his state-of-the-state address yesterday, Gov. Schwarzenegger said that despite the enormous budget shortfalls California faces, education spending won’t be touched. But as the post yesterday points out, the issue is not money for California schools. Just look at Texas, which spends 12 percent less per pupil with a similar kind of population but does significantly better educating its kids.
UPDATE: Another reader writes in to point out this article on Berkeley High School’s plan to cut science labs because it is seen as benefiting “white students”:
Paul Gibson, an alternate parent representative on the School Governance Council, said that information presented at council meetings suggests that the science labs were largely classes for white students. He said the decision to consider cutting the labs in order to redirect resources to underperforming students was virtually unanimous.
But here’s the worst part:
Sincular-Mertens, who has taught science at BHS for 24 years, said the possible cuts will impact her black students as well. She says there are twelve African-American males in her AP classes and that her four environmental science classes are 17.5 percent African American and 13.9 percent Latino. “As teachers, we are greatly saddened at the thought of losing the opportunity to help all of our students master the skills they need to find satisfaction and success in their education,” she told the board.


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Old 04-22-2010, 03:06 PM   #24
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More texas doings-on. Interesting note about exports and the diversification of the economy. Also some stuff in here about the grid and wind-power driving the economy.

http://www.slate.com/id/2250999/?patrick.net=y
Quote:
Lone StarWhy Texas is doing so much better economically than the rest of the nation.

......
While its political leaders may occasionally flirt with secession, Texas thrives on connection. It surpassed California several years ago as the nation's largest exporting state. Manufactured goods like electronics, chemicals, and machinery account for a bigger chunk of Texas' exports than petroleum does. In the first two months of 2010, exports of stuff made in Texas rose 24.3 percent, to $29 billion, from 2009. That's about 10 percent of the nation's total exports. There are more than 700,000 Texan jobs geared to manufacturing goods for export, according to Patrick Jankowski, vice president of research at the Greater Houston Partnership. "A lot of it is capital goods that the Asian, Latin American, and African [countries] are using to build their economies."
Thanks to that embrace of globalization, the Texas turnaround may help lead the nation in its economic turnaround. Texans have always had the ability to think big. Now that their state has become a player in the global economy, we can expect a new kind of swagger.
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Old 05-17-2010, 12:36 PM   #25
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Welcome...
http://www.usnews.com/articles/opini....html?PageNr=1
Quote:
It is galling for private sector workers to see so many public sector workers thriving because of the power their unions exercise. Take California. Investigative journalist Steve Malanga point out in the City Journal that California's schoolteachers are the nation's highest paid; its prison guards can make six-figure salaries; many state workers retire at 55 with pensions that are higher than the base pay they got most of their working lives. All this when California endures an unemployment rate steeper than the nation's. It will get worse. There's an exodus of firms that want to escape California's high taxes, stifling regulations, and recurring budget crises. When Cisco's CEO, John Chambers, says he will not build any more facilities in California, you know the state is in trouble.
....
heck of a good gig if you can vote for your own raise!!

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In California, such retirees at age 50 often receive pensions at 90 percent of their pay; comparable retirees in most other states get about half their final working salary.
....
City government was developed to serve its citizens. Today the citizenry is working in large part to serve the government. It is always hard to shrink government spending. It is particularly difficult when public sector unions have such a unique lever of pressure.
We have to escape this cycle or it will crush us. One way is to take labor negotiations out of the hands of vulnerable legislators and assign them to independent commissions. They would have a better shot at achieving a fair balance between appropriate salary increases and the revenues and services of local municipalities. The electorate won't swallow any more red ink.
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Old 06-16-2010, 10:25 PM   #26
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A pretty cool interactive map. Showing migration patterns among counties.
http://www.forbes.com/2010/06/04/mig...?preload=48453

First Austin

then Santa Clara and Silicon Valley
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Old 08-03-2010, 08:13 AM   #27
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Another one from Indiana. I love the simple over-riding goal of Daniels.
http://www.realclearpolitics.com/art...ts_106590.html
Quote:
When it comes to demeanor, Mitch Daniels is to Chris Christie what Miss Indiana is to Snooki. In his quieter way - and in less dire circumstances - the skinflint second-term governor has slimmed down and improved his state's public sector. He inherited a $200 million deficit in 2004, which he turned into a $1.3 billion surplus - just in time for it to act as a cushion during the recession. He has reformed government services and rallied his administration around one simple, common-sense goal: "We will do everything we can to raise the net disposable income of individual Hoosiers."
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Old 11-17-2010, 09:29 AM   #28
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More texas/kalifornia comparisons. I'm pleasantly surprised at the high-tech numbers..

http://blogs.forbes.com/joelkotkin/2...d-you-a-knife/
Quote:
A vast difference in economic performance is driving the demographic shifts. Since 1998, California’s economy has not produced a single new net job, notes economist John Husing. Public employment has swelled, but private jobs have declined. Critically, as Texas grew its middle-income jobs by 16%, one of the highest rates in the nation, California, at 2.1% growth, ranked near the bottom. In the year ending September, Texas accounted for roughly half of all the new jobs created in the country.



Even more revealing is California’s diminishing preeminence in high-tech and science-based (or STEM–Science, Technology, Engineering and Mathematics) jobs. Over the past decade California’s supposed bulwark grew a mere 2%–less than half the national rate. In contrast, Texas’ tech-related employment surged 14%. Since 2002 the Lone Star state added 80,000 STEM jobs; California, a mere 17,000.
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Old 02-09-2011, 11:22 AM   #29
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Another installment...
http://washingtonexaminer.com/opinio...exas-adds-them

Quote:
While many states have been struggling through the economic downturn, there's been a giant neon sign hanging over Texas that says "OPEN FOR BUSINESS."

In 2008, 70 percent of all the jobs in the country were created in Texas. In 2009, all of America's top five job-creating cities were in Texas.
More recently, "Texas created 129,000 new jobs in the last year -- over one-half of all the new jobs in the U.S. In contrast, California lost 112,000 jobs during the same period," according to "Texas vs. California: Economic growth prospects for the 21st Century," a new report by the Texas Public Policy Foundation released in October.


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Old 02-09-2011, 04:55 PM   #30
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January 6, 2011
The Texas Omen

By PAUL KRUGMAN

These are tough times for state governments. Huge deficits loom almost everywhere, from California to New York, from New Jersey to Texas.

Wait — Texas? Wasn’t Texas supposed to be thriving even as the rest of America suffered? Didn’t its governor declare, during his re-election campaign, that “we have billions in surplus”? Yes, it was, and yes, he did. But reality has now intruded, in the form of a deficit expected to run as high as $25 billion over the next two years.

And that reality has implications for the nation as a whole. For Texas is where the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting wasteful spending — has been implemented most completely. If the theory can’t make it there, it can’t make it anywhere.

How bad is the Texas deficit? Comparing budget crises among states is tricky, for technical reasons. Still, data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York’s, about as bad as California’s, but not quite up to New Jersey levels.

The point, however, is that just the other day Texas was being touted as a role model (and still is by commentators who haven’t been keeping up with the news). It was the state the recession supposedly passed by, thanks to its low taxes and business-friendly policies. Its governor boasted that its budget was in good shape thanks to his “tough conservative decisions.”

Oh, and at a time when there’s a full-court press on to demonize public-sector unions as the source of all our woes, Texas is nearly demon-free: less than 20 percent of public-sector workers there are covered by union contracts, compared with almost 75 percent in New York.

So what happened to the “Texas miracle” many people were talking about even a few months ago?
Part of the answer is that reports of a recession-proof state were greatly exaggerated. It’s true that Texas job losses haven’t been as severe as those in the nation as a whole since the recession began in 2007. But Texas has a rapidly growing population — largely, suggests Harvard’s Edward Glaeser, because its liberal land-use and zoning policies have kept housing cheap. There’s nothing wrong with that; but given that rising population, Texas needs to create jobs more rapidly than the rest of the country just to keep up with a growing work force.

And when you look at unemployment, Texas doesn’t seem particularly special: its unemployment rate is below the national average, thanks in part to high oil prices, but it’s about the same as the unemployment rate in New York or Massachusetts.

What about the budget? The truth is that the Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances in the face of a serious “structural” budget deficit — that is, a deficit that persists even when the economy is doing well. When the recession struck, hitting revenue in Texas just as it did everywhere else, that illusion was bound to collapse.

The only thing that let Gov. Rick Perry get away, temporarily, with claims of a surplus was the fact that Texas enacts budgets only once every two years, and the last budget was put in place before the depth of the economic downturn was clear. Now the next budget must be passed — and Texas may have a $25 billion hole to fill. Now what?

Given the complete dominance of conservative ideology in Texas politics, tax increases are out of the question. So it has to be spending cuts.

Yet Mr. Perry wasn’t lying about those “tough conservative decisions”: Texas has indeed taken a hard, you might say brutal, line toward its most vulnerable citizens. Among the states, Texas ranks near the bottom in education spending per pupil, while leading the nation in the percentage of residents without health insurance. It’s hard to imagine what will happen if the state tries to eliminate its huge deficit purely through further cuts.

I don’t know how the mess in Texas will end up being resolved. But the signs don’t look good, either for the state or for the nation.

Right now, triumphant conservatives in Washington are declaring that they can cut taxes and still balance the budget by slashing spending. Yet they haven’t been able to do that even in Texas, which is willing both to impose great pain (by its stinginess on health care) and to shortchange the future (by neglecting education). How are they supposed to pull it off nationally, especially when the incoming Republicans have declared Medicare, Social Security and defense off limits?

People used to say that the future happens first in California, but these days what happens in Texas is probably a better omen. And what we’re seeing right now is a future that doesn’t work.

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Old 02-09-2011, 05:05 PM   #31
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Maybe this is a dumb question, but how does the percentage of residents with healthcare in anyway relate to a State's "stinginess on health care".

Having health care is, essentially, a personal decision, is it not? Are there state regulations on what types/sizes of companies must offer healthcare?
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Old 02-09-2011, 05:07 PM   #32
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Default $27 Billion Deficit.

.
Quote:
Revenue estimate puts shortfall at $27 billion

By Kate Alexander | Monday, January 10, 2011, 10:00 AM
Texas is expected to collect $72.2 billion in taxes, fees and other general revenue during the 2012-13 budget, down from the $87 billion used in the current two-year budget, Comptroller Susan Combs announced Monday.

That puts the shortfall at $27 billion given that maintaining services would run $99 billion for biennium.
Collections for the current budget will come in $4.3 billion less than budgeted.


Combs’ estimate dictates how much the Legislature will have to spend in the upcoming budget on education, prisons, health and human services and a slew of other state functions.

Even with the $9.4 billion rainy day fund, the state would still not have enough to maintain services at their current levels, which would run $99 billion according to agency budget requests.
Quote:
There's One Huge State Budget Crisis That Everyone Is Refusing To Talk About


You know the story and you know the names: states like Illinois, New Jersey, New York, and California are supposed to be in huge financial trouble thanks to bloated governments, business-unfriendly regulations, and strong public sector unions.

After a crisis-free 2010, investors are expected to punish these hotbeds of bad governance in a muni bond market rout, at least if pundits like Meredith Whitney are correct.
But there's one state, which is fairly high up on the list of troubled states that nobody is talking about, and there's a reason for it.

The state is Texas.

This month the state's part-time legislature goes back into session, and the state is starting at potentially a $25 billion deficit on a two-year budget of around $95 billion. That's enormous. And there's not much fat to cut. The whole budget is basically education and healthcare spending. Cutting everything else wouldn't do the trick. And though raising this kind of money would be easy on an economy of $1.2 trillion, the new GOP mega-majority in Congress is firmly against raising any revenue.

So the bi-ennial legislature, which convenes this month, faces some hard cuts. Some in the Texas GDP have advocated dropping Medicaid altogether to save money.

So why haven't we heard more about Texas, one of the most important economy's in America? Well, it's because it doesn't fit the script. It's a pro-business, lean-spending, no-union state. You can't fit it into a nice storyline, so it's ignored.

But if you want to make comparisons between US states and ailing European countries, think of Texas as being like America's Ireland. Ireland was once praised as a model for economic growth: conservatives loved it for its pro-business, anti-tax, low-spending strategy, and hailed it as the way forward for all of Europe. Then it blew up.

This is the sleeper state budget crisis of 2011, and it will be praised for doing great, right up until the moment before it blows up.



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Old 02-09-2011, 05:19 PM   #33
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Quote:
Originally Posted by jthig32 View Post
Maybe this is a dumb question, but how does the percentage of residents with healthcare in anyway relate to a State's "stinginess on health care".

Having health care is, essentially, a personal decision, is it not?
Does a 3-year old or a newborn infant choose to insure him/herself?
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Old 02-09-2011, 05:22 PM   #34
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I'll be NOT holding my breath waiting for the krugman correction after texas balances their budget...again...

Quote:
NEW YORK (CNNMoney) -- Texas lawmakers unveiled a Spartan budget late Tuesday night that slashes $31 billion in spending to close the state's massive budget deficit. Education, Medicaid and corrections would be hit particularly hard.
House legislators were forced to rely on spending cuts to close the shortfall -- estimated at between $15 billion and $27 billion -- because Republican leaders pledged not to raise taxes. They also did not touch the state's projected $9.4 billion rainy day fund, one of the most flush in the nation.
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Old 02-09-2011, 05:28 PM   #35
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Default Let them eat smoke and mirrors.

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Quote:
A Self-Inflicted Mess

Updated January 20, 2011, 02:34 PM


Texas’ budget is a mess. The state comptroller’s office has estimated that Texas has a budget gap of $27 billion for fiscal years 2012 and 2013 (Texas budgets in two-year cycles). The shortfall represents roughly one-quarter of all state spending. It’s one of the worst state budget deficits in the country — even worse than California’s.

Texas Gov. Rick Perry has blamed the mess on factors beyond his control — mostly the nation’s faltering economy. But that’s only part of the story. The current crisis in Austin has been largely self-inflicted.


To understand how this happened, you have to go back to 2006, when Texas lawmakers passed a massive tax reform plan. The goal was to cut property taxes without costing the state any money. Perry designed a “tax swap” that would reduce property taxes and replace the lost revenue with a new business tax.


There was one major flaw with this plan — it didn’t balance. Property taxes were cut by $14 billion annually. But the new business tax brought in only $9 billion a year in new money. As a result, the tax-swap plan has burned a $5 billion hole in the budget every year since. (In 2007, a booming economy helped mask the problem, and in the 2009 session, lawmakers used $12 billion in federal stimulus money to fill the gap.)


The imbalance was well known. The Texas comptroller’s office warned Perry in 2006 that his plan didn’t pay for itself. The comptroller’s office estimated the plan would result in a five-year deficit of $23 billion. Perry and other legislative leaders ignored those warnings. Some Democrats in Austin suspect that G.O.P. leaders intentionally created this structural deficit as a way tamp down state spending. And some Republican leaders and conservative activist groups have made statements in recent weeks that expressed downright giddiness at the prospect of deep cuts in state spending. Lieut. Gov. David Dewhurst referred to the budget gap in his inaugural speech on Jan. 18 as an “opportunity.”


Whatever the reason for the structural deficit, the bill is now coming due. The 2006 tax swap has resulted in a shortfall of at least $20.9 billion the past two budget cycles, according to an analysis by the Center for Public Policy Priorities, a left-leaning Austin think tank.


The structural deficit accounts for a large piece of Texas' current $27 billion shortfall.


In short, we did it to ourselves.
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Old 02-09-2011, 05:30 PM   #36
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.
Quote:
State’s structural deficit $10 billion, official says

By Kate Alexander | Monday, January 31, 2011, 11:13 AM
Texas will have a persistent $10 billion hole in its budget for years to come unless legislators address it this session, the state’s chief revenue estimator told senators Monday morning.

Pressed by Democratic senators on the Finance Committee, John Heleman said the state will have a $10 billion structural deficit in future budgets largely because the business tax has underperformed and the 2006 property tax swap has cost more than expected.

The revised business tax was supposed to bring in $6 billion per year. Instead, it it is generating $4 billion.

The cost of the property tax relief is also running about $1 billion per year above expectations.

“That gap is not closing up,” said Heleman, chief revenue estimator for Comptroller Susan Combs.


Republican state leaders have attributed the state’s budget woes to the recesssion and have dismissed calls to raise taxes to deal with the current budget shortfall, estimated at $15 billion to $27 billion, saying they can cut their way out of that hole.

But the structural deficit would mean legislators would have to come back in 2013 and beyond to deal with at least another $10 billion hole.

Earlier, Finance Chairman Steve Ogden, R-Bryan, said his committee would tackle the toughest issues first: health and human services and education. The committee will meet Monday through Thursday and will continue past 6 p.m., if necessary, to avoid Friday hearings.

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Old 02-09-2011, 05:35 PM   #37
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Default He who sleeps with his head in the sand.....

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Quote:
It Wasn't Just the Recession

Updated January 20, 2011, 02:34 PM
F. Scott McCown, a retired judge, is executive director of the Center for Public Policy Priorities, based in Austin, Tex.


At his inauguration on Tuesday, Gov. Rick Perry touted the Texas Century. Hours later the proposed state budget was released, underfunding public education formulas by almost a quarter; slashing higher education and financial aid; and reducing already inadequate payments to health care providers.

The budget directly eliminates 10,000 state jobs, and indirectly will cost many private sector and local government jobs.

Overall, Texas is short at least $27 billion, or about a quarter of the revenue we need to continue doing merely what the state does now. And Texas doesn’t do much, ranking last in state spending per person.

What happened? The Great Recession hurt Texas like other states, even with our oil and gas sector. Unemployment went up, property values went down, and sales taxes plummeted. Unlike other states, though, we have a two-year state budget, which hid our problem until now.

But the recession isn’t the only cause of our problem. About a third of our shortfall comes from an ill-advised $10 billion net tax cut in 2006. As a state that ranks near the bottom in taxes collected per person, but has lots of kids to educate and lots of people without health insurance, we simply couldn’t afford to cut taxes. But we did. Our folly is only now coming to light because Texas covered the tax cut with one-time savings and federal Recovery Act stimulus money — all of which is gone.

Texas needs a balanced approach to our current revenue crisis that includes 1) using our $9.4 billion Rainy Day Fund (generated by high oil prices and increased demand for natural gas, not from any Texas miracle) and 2) adding several billion in new revenue. For example, we could increase our cigarette tax by a dollar a pack. Or we could expand the sales tax base by eliminating unwarranted exemptions or exclusions or temporarily increasing the rate.

What Texas will do remains to be decided. But to truly be successful in this new century, Texas needs to invest in Texans to create opportunity and ensure prosperity.

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Old 02-09-2011, 05:47 PM   #38
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Default ....keeps waking up wondering why his ass has been kicked.

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Quote:
Perry stays upbeat in State of the State address

Posted Tuesday, Feb. 08, 2011
By Dave Montgomery
dmontgomery@star-telegram.com
AUSTIN -- Gov. Rick Perry, in a largely upbeat address to lawmakers Tuesday, proclaimed that Texas is "still the envy of our nation" on a multitude of fronts despite a withering budget crunch that is threatening deep cuts in state services.

Delivering his sixth State of the State address since taking office more than a decade ago, the state's longest-serving governor also proposed suspending four relatively small agencies and consolidating several others in a move that he said would help answer Texans' demands for greater government efficiency.

In a proposal likely to resonate in households with college-bound children, Perry also called on colleges and universities to offer a bachelor's degree program that costs no more than $10,000. He also resurrected a 2009 proposal to freeze students' tuition for four years at the rate they paid as freshmen.

State Sen. Wendy Davis, D-Fort Worth, leading the Democrats' response to the Republican governor, issued a sharply worded rebuttal to what she said was an erroneous depiction of the state government's fiscal health.

"Gov. Perry has been waking up in a very different reality than most citizens of Texas," Davis said. "Their reality is becoming starker by the day. In the reality of Texas families, schools are closing, teachers are losing their jobs and state support for public education, already among the lowest in the entire nation, is facing dramatic cuts."

'No sacred cows'

Perry's address nevertheless seemed well-received in a Legislature that is firmly in Republican control after extensive GOP victories in November. Perry touched on many of the conservative themes from his campaign, including calls to crack down on illegal immigration and curb abortions.

He also returned to one of his favorite themes by assailing "Washington overreaching" and calling on Texas lawmakers to help repeal President Barack Obama's healthcare law, which Texas Republicans derisively denounce as "Obamacare." He lashed out at the Environmental Protection Agency for what he has called excessive clean-air enforcement policies.

Declaring that there are "no sacred cows" in state government, Perry proposed suspending funding for four state agencies -- the Texas Historical Commission, the Commission on the Arts, the Texas Board of Professional Geoscientists and the Texas Board of Professional Land Surveying. Funding would possibly be restored when the economy improves, Perry's office said.

He also proposed mergers and consolidations designed to join more than a dozen agencies with similar responsibilities. One consolidation would create a new entity -- the Health Professions Agency -- out of the Texas Medical Board, the Board of Nursing, the Board of Dental Examiners and the Optometry Board.

Tough choices

Perry opted against introducing his own spending plan and instead chose to use draft budgets prepared for the House and Senate as a starting point. In one major departure, he is calling for $500 million more in state education assistance to school districts above that recommended in the House budget.

As expected, Perry called on lawmakers to balance the budget by reducing spending and avoiding new or increased taxes. He also called on lawmakers to stay out of the state's rainy-day fund, expected to have $9.4 billion at the end of the 2012-13 biennium.

"Are we facing some tough choices? Of course," Perry said. "But we can overcome them by setting priorities, cutting bureaucracy, reducing spending and focusing on what really matters to Texas families."

The draft House and Senate budgets unveiled in January call for budget reductions of up to $31.1 billion for 2012-13. Education cuts of nearly $10 billion have spread alarm throughout school districts, threatening extensive layoffs and possible school closures.

Perry sought to counter "doomsayers" by citing articles and statistics describing the state's job growth, strong home values and robust urban areas.

"As this session gets rolling, some folks are painting a pretty grim picture of our situation, so we need to balance their pessimism with the good news that continues to flow from our comparatively strong economy," Perry said.

Last edited by Jack.Kerr; 02-09-2011 at 05:49 PM.
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Old 02-09-2011, 06:16 PM   #39
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Does a 3-year old or a newborn infant choose to insure him/herself?
What does the state have to do with it? That was the point of the question.
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Old 02-09-2011, 06:22 PM   #40
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What does the state have to do with it? That was the point of the question.
The state is you...and me, and everybody else. You know...of the people, for the people, by the people. One thing that we have decided to do as "the state" is to care for children who cannot care for themselves (or have no one else to adequately care for them). There is perhaps a selfish reason for it, as it in our best long-term interests to have healthy children to populate future generations. Or perhaps it is just humanitarian, at its core.
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