In Houston, Gov. Perry promotes compact to ensure no new taxes


Among other things, the Texas Budget Compact calls for a constitutional limiting of state spending increases to population growth and inflation and demands a business tax exemption for companies with annual revenues of less than $1 million be made permanent.

The compact asks legislators to keep the state's rainy day fund to remain strong, eliminates unnecessary and redundant state government programs and agencies, and demands "truth in budgeting" by ending short-term financial fixes that put off decisions to future legislatures.

"This is an incredible opportunity to do what's right for Texas and for Texans," Perry said at a campaign-style appearance at a Houston moving company that he said was typical of small businesses to benefit from the business tax exemption. "This is a conversation that time is ripe for us to have. We hope people will read these and find something they can put their full faith and support behind."

The Texas Legislature doesn't meet until next January and Republican Perry isn't up for possible re-election for a another two-plus years but several Texas Senate seats and the Texas House are up for grabs in 2012, beginning with the primary election next month. The GOP controls both houses.

The Texas Democratic Party, which has held none of the statewide elected offices since 1994, immediately branded Perry's announcement Monday "shameful."

"Perry is calling on his fellow Republicans to commit to permanently underfunding public education and human services," Boyd Richie, the party chairman, said. "He's leading Texas into a race for the bottom that jeopardizes the future of both our children and our parents."

Perry said he understood not everyone would embrace his ideas.

"This is nothing new," he said. "I've been involved in this process since 1985 and there's been wailing and gnashing of teeth and the same in 1985 as we hear now.

"Every session there are people who want to spend more money, there are people who want to prioritize their projects where they find themselves as most important in the state. ... We make it work. I'm sure at the end of the day there will be those who say we would have done this differently. But our process works and I think our process works as well as any other state in the nation."

Asked specifically what cuts he'd make in redundant state programs or agencies, Perry declined.

"I think this is a good time to start the conversation," he said. "We're not going to write the budget today. My instinct is there may be some folks in the private sector who can give us some ideas."

The governor said a good chunk of the state budget goes to Medicaid costs, which he described as a "ticking time bomb" that only will rise if the U.S. Supreme Court doesn't throw out President Barack Obama's health care law.

Perry said the compact was "all about resetting the button on budgeting and that's what I think Texans understand." He also said he didn't want the state to become like the federal government "that's out of control" and other states "that have some real problems with their budgetary process."

Texas is in the midst of a two-year budget lawmakers passed last year that included state spending cuts of almost $15 billion.

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