PERRY CALLS FOR MORE TAX RELIEF IN STATE OF THE STATE

Governor Rick Perry delivers his biennial State of the State address to a joint session of the Legislature.

(AUSTIN) — Touting the state's continued economic success, Governor Rick Perry told lawmakers Tuesday in his biannual State of the State address he wants to find a way to give surplus revenue back to taxpayers. This speech, given before a joint session of the legislature, is the Governor's opportunity to lay out his priorities for the upcoming session. Perry said he wants to continue the conservative, small-government philosophies that he says have enabled Texas to keep ahead of other states through the national recession. "Bureaucracy doesn't stimulate the economy, it just gets in the way," he said.

Perry laid out a number of fiscal policies he believes will continue to grow the Texas economy, but he wants to give revenue back to taxpayers. This biennium's revenue estimate predicts that Texas will bring in about $24 billion more in revenue than last session, and Perry wants to provide $1.8 billion of that in tax relief. He noted that there is no current legal mechanism to accomplish this, however, and asked lawmakers to pass a constitutional amendment that would set up a way to get that money back in the pockets of taxpayers. Perry also laid out other budgetary priorities including ending diversions of dedicated funds to general revenue, a constitutional spending limit, and a permanent franchise tax exemption for small businesses.

The Governor also told legislators that the state must improve its water and transportation infrastructure if it is going to remain competitive in the future. To do so, he proposed using $3.7 billion from the state's Rainy Day Fund for a one-time expenditure to cover the cost of infrastructure improvements. This fund is intended to serve as an emergency fund to keep Texas solvent and paying debt service in the event of a financial crisis. Perry has long said he opposed using the Rainy Day Fund for ongoing expenditures, but with the fund expected to surpass $12 billion by next year, he said there is no point to accumulating billions more than is necessary.

On the education front, Perry said he wants to expand charter schools and create a scholarship program where tax money can be used to pay for kids to go to private schools. He also wants a tuition freeze for incoming university freshmen, guaranteeing the cost for college doesn't go up over that student's education. To encourage students to graduate college on time, Perry also proposed tying a portion of university funding to an institution's ability to produce college graduates in a timely fashion.

Perry reiterated his opposition to the Affordable Care Act, telling assembled legislators that the state would participate as little as possible in the national health care act. He said Texas will not set up a health exchange program, nor will it take federal money to expand Medicaid eligibility. "We have not changed nor will we change our position on that one iota," said Perry.

###