- The Washington Times - Tuesday, February 4, 2003

Faced with huge budget shortfalls, many governors feel they have no choice but to raise taxes. This includes Republicans like Kenny Guinn of Nevada, who must reduce a $1.2 billion deficit.
My best advice to Mr. Guinn: Ignore those who are advising you to raise taxes. Instead, look to your Republican friends in Texas and other states to find a better way of dealing with Nevada's budget problems.
Texas comptroller Carole Keeton Strayhorn summed up the situation in no-nonsense terms. "The last legislature had a party," she said, "and left this legislature with a hangover." The Texas shortfall may surpass $12 billion this year, but the state's legislative and executive branches are poised to demonstrate to the nation that daunting shortfalls don't necessarily require a tax-increase remedy.
In the 2002 elections, more candidates ran on platforms of opposing tax increases than since 1994. Now, newly elected lawmakers need good examples of fiscal restraint. By cooperating to achieve this goal the Texan legislative and executive branches may very well inspire other states' lawmakers to act in a fashion consistent with their campaign rhetoric. Appointing principled committee leaders and preventing tax increases from reaching the House or Senate floor will stymie the gaggle of special pleaders who want to protect or grow their "essential" programs.
Poorly selected committee chairs and leadership power-grabs can undermine the effectiveness of any state legislature. State senators in Texas nominated Republican Bill Ratliff as their Senate leader and lieutenant governor two years ago, only to watch Mr. Ratliff appoint notorious tax-and-spend Democrat Rodney Ellis to chair the finance committee. Mr. Ellis publicly stated during the 2001 budget process that he would spend every nickel available to him, apparently without suffering much of a hangover himself. "If the legislature had a party, I must have missed it," Mr. Ellis said recently. Maybe so, but voters didn't.
Voters noticed their state governments' inebriated spending habits, in Texas and elsewhere, and in 2002 they elected 20 gubernatorial candidates who made repeated statements of opposition to tax increases.
The pattern extended to the state legislative level, where voters elected taxpayer-friendly Republicans to an additional 120 seats. Republicans now control state legislatures by a wider margin than they have since 1952. Five states Illinois, Kansas, Michigan, Tennessee and Wisconsin lost or barely maintained Republican seats in their legislatures, and voters elected Democratic governors where there had been Republicans. Each of these states increased taxes and fees by millions of dollars last year. Voters responded with sobriety.
This month, budget battles begin anew in virtually every state across America. The age-old budget process commences with the previous year's budget plus additional agency-recommended spending, the budget is submitted to legislators with interests of their own, and finally the legislative and executive branches negotiate for spending cuts and tax increases to balance the budget. In contrast, Gov. Rick Perry, Lt. Gov. David Dewhurst, both Republicans, and Republican leadership in the state House are collaborating to draft a budget based on available revenues. Both Messrs. Perry and Dewhurst have said that in this way they can balance the budget without raising taxes, and simultaneously improve budget process transparency.
Transparent budget processes and significant limits on state spending will go a long way towards winning the confidence of taxpayers and boosting economic recovery. Fiscal conservatives in state capitols across the country must choose between principles and short-term popularity; spending cuts without tax increases will be difficult to enact, but will improve states' fiscal health and economies for the better, now and in future years. On the other hand, short-term popularity will require more tax increases and continue the long tradition of smoke-and-mirrors budgeting.
Lawmakers nationwide from both parties need look no further than Texas for principled budget leadership. At this year's legislative party, Texan lawmakers will drink tapwater.

Grover Norquist is president of Americans for Tax Reform.

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