Rick Perry's Manufactured Miracle

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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 last 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.

The shifting of public responsibility from state to local government also shows up in the study's rankings for total public debt per capita. If you look only at state government, Texas looks great — the next-to-lowest debt per resident in the country. But when you add local debt to that state debt, Texas falls into 15th place, among the most debt-loaded states in the union.

Taken together, the numbers fail to conform to Perry's portrayal. In job creation and economic hardiness, as a tax haven, even as a place where government is supposed to be scarce, Texas fails to fit the sound bites. Which raises another obvious question: Perry himself. If Texas is not the small-government, low-tax, bottom-up-governed oasis its governor describes, is he even that kind of leader?

The Tea Party has been lighting torches of discontent in recent weeks over Perry's support for in-state tuition for children of illegal immigrants (too compassionate) and his backing of mandatory HPV vaccinations for teenage girls (too progressive). But another chapter, one too nuanced for the 24-hour news cycle, better demonstrates Perry's true style of governance: his failed attempt to create a high-tech transportation corridor across the entire state.

Announced in January 2002, the "Trans-Texas Corridor," or TTC, was to be a gigantic 1,200-foot-wide swath 4,000 miles long carrying high-speed rail, pipelines and high-tech super toll roads from Mexico to Oklahoma. Like the higher education "seven points" plan, the TTC was the brainchild of a millionaire pal of Perry's, the late Ric Williamson, whom Perry had appointed chairman of the state's Transportation Commission.

The problem, according to people involved in Texas transportation and trade issues at the time, was that Perry and Williamson dropped the plan on legislators as a fait accompli, without any political preparation. Then they made things worse by trying stubbornly to force it by fiat down the throats of an increasingly recalcitrant citizenry.

The TTC idea is dead now, shot many times over in the head by the Legislature. After Perry unveiled the TTC in 2002, farmers, small towns and two major cities rose up against it in horror, fueled by its threatened use of eminent domain and a backroom deal to turn the road over to a Spanish toll road company — without a bidding process. Even worse, the preordained route would have bypassed, and probably killed, major new shipping centers in both Dallas and Fort Worth.

State Senator Florence Shapiro, a Republican powerhouse, still thinks the basic concept may have had merit. She calls Williamson, who died of a heart attack four years ago, "a very, very bright man." But, she says, "The manner in which it was presented was the problem. They didn't even try to work it out. They just said, 'Here's the plan.'"

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Jim Schutze has been the city columnist for the Dallas Observer since 1998. He has been a recipient of the Association of Alternative Newsweeklies’ national award for best commentary and Lincoln University’s national Unity Award for writing on civil rights and racial issues. In 2011 he was admitted to the Texas Institute of Letters.
Contact: Jim Schutze