Op-Ed: Conservative victories should spur reforms
By John Colyandro & Tom Aldred
Published by the Fort Worth Star-Telegram on Friday, June 8, 2012.
The national fiscal and economic crisis is transforming Republican ranks as voters demand candidates with a genuine commitment to government reform and economic freedom.
North Richland Hills state Rep. Kelly Hancock’s overwhelming victory in last week’s Senate District 9 primary is a notable example of this trend, which will serve as further impetus for conservative policy reform in Texas.
Since 2003, successive legislatures have balanced the budget without tax increases. The state has enacted landmark medical malpractice lawsuit reform (2003) and “loser pays” tort reform (2011), and has passed a multitude of smart free-market reforms, including targeted reforms in the telecommunications and insurance marketplaces.
Consequently, Texas has recovered strongly from the economic downturn. The state has regained all of the payroll job losses that occurred since 2008 and has the lowest unemployment rate of the 10 most populous states. Recent figures released by the comptroller show 26 consecutive months of sales tax revenue growth. Texas now accounts for nearly 9 percent of the nation’s economy.
Still, many challenges remain. Texas’ debt continues to escalate, both at the state and local level, while the high per capita number of public sector employees places an immediate and future financial burden on state taxpayers. Property taxes remain a festering problem that negatively impact homeownership and economic development, while unnecessary licensing and regulation of Texas’ private sector often stands in the way of economic growth.
The success of conservative candidates in last week’s elections establishes a clear mandate for further reforms to enhance economic freedom. In our view, Texas should not simply be relatively better than the rest of the nation. Texas should be absolutely better in many key areas.
To achieve that objective, we suggest the following:
Move away from property taxes for public education. Property taxation represents a growing impediment to homeownership and a challenge to property rights, penalizes investment in capital-intensive business and drags the state into interminable school finance litigation. A better approach would be to shift toward a general revenue solution to school finance while also vastly improving public education efficiency. Comptroller Susan Comb’s FAST report provides a solid foundation for achieving greater efficiency.
Pay down debt. Spiraling sovereign debt cripples the economic future of much of Europe. Debt problems are pushing California in the same direction. Texas’ state and local debt has more than doubled over the past decade. Debt service threatens the delivery of critical state services; appropriations for debt service are approximately equivalent to what the state spends on the Department of Public Safety and the judiciary combined.
Reform the public sector, including pensions. With 25 percent of Texas jobs coming from state or local government, reducing the current public sector workforce and curtailing its future growth are crucial. Halting the creation of new taxing entities and increasing outsourcing, with sensible changes to public sector pay and benefits, provides the clearest path to ensuring actuarially sound retirement systems for government workers.
Roll back excessive regulation. Texas regulates or licenses more than one-third of its workforce, more than the national average. Each regulation or occupational license creates a barrier to employment, and many are unjustified. Eliminating licensing requirements for professions that do not directly impact the health and safety of the public would be a sensible first step. More market-based reforms in insurance and other areas also could benefit consumers.
Voters have established a mandate for a renewed brand of courageous conservatism. Texas’ best path to further economic freedom and prosperity is to put these conservative principles into action.
John Colyandro is executive director and Tom Aldred is director of policy and research at the Texas Conservative Coalition Research Institute in Austin.
