July 10, 2014
by Governor Rick Perry
In 2011, Illinois and Texas each faced a challenging legislative session. 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 prioritized our spending, identified areas where we could save, and made the 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, meanwhile, raised taxes.
Fast-forward to today and you can see the way the decisions we made have played out.
In 2013, Texas was able to restore what was trimmed in ‘11, provided major tax cuts to employers, and still had 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, meanwhile, still has a budget that Gov. Quinn says is unbalanced, billions in unpaid bills, and it’s uncertain how the courts will rule on one of the worst-funded state pension systems in the nation. While the Illinois legislature was wise enough to turn away appeals to extend the 2011 tax hike, they still haven’t made the tough decisions necessary to bring spending under control.
Even beyond the state budget, there are very real consequences of each state’s actions.
In 2014, Texas attracted Toyota’s world headquarters from a blue state, California.
In 2014, Illinois lost several Caterpillar plants that were consolidated 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 of this year, we have 880,000 more 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, like the ones being created in Texas, 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. Over that same span, Illinois lost 7,000. While we grew jobs at a rate of 3.4 percent over the past year – fastest among the biggest states – Illinois’ rate of job growth is 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 make these trips to spread the word about why our system works, and how it can work elsewhere. Already, states like Florida, South Carolina and Wisconsin have instituted reforms in the Texas style, and they’re starting to see the benefits.
Again, there’s nothing secret or special about our approach at all.
We keep taxes low, so employees and employers alike get to keep more of their own 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 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, and they can really work as a foundation almost anywhere.
But to implement such policies, you have to accept the fact that government should limit itself to doing its core functions. When government takes over huge segments of the nation’s economy, as this administration has done through Obamacare and Medicaid expansion, it’s a recipe for disaster.
In Texas, we rejected President Obama’s flawed 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. We recognize the simple truth that expansion will undoubtedly lead to higher costs for states already struggling to meet mounting budgetary demands, and will crowd out other essential government functions.
Other states have rushed headfirst into expansion despite massive problems with their existing programs. In Illinois, for example, by the time expansion is complete, one out of every four Illinoisans will be dependent on Medicaid, which was only ever intended to serve as a safety net for those most in need. This makes it even more troubling that Illinois officials only recently realized that roughly 250,000 people had been receiving Medicaid services for which they did not qualify.
Despite the rhetoric inherent 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, in adopting some of the policies that have worked so well elsewhere.
We’ve shown there’s a way; All that’s needed is the will.