AUSTIN, Texas, Feb. 11 (UPI) -- Gov. Rick Perry Tuesday called for cost-cutting initiatives but no tax hikes to cover a $9.9 billion revenue shortfall in Texas.
In his state-of-the-state address, Perry told the 78th Texas Legislature that the spending crisis that faces the state demands a new approach to government.
"We must separate wants from needs, identify core priorities, and put the common interest ahead of narrow special interests," the Republican said.
Perry said his priorities in drafting the 2004-05 biennial budget would be education, security and fiscal responsibility. He repeatedly emphasized that there was no need to increase taxes.
Perry said Texas families "don't want, don't need and don't deserve new taxes."
Texas is facing a $1.8 billion shortfall in the current fiscal year and a $9.9 billion gap in the upcoming two-year budget cycle, according to State Comptroller Carole Keeton Strayhorn. The governor has proposed a zero-based budget for 2004-05.
"We should follow the example of millions of Texas families," he said. "When times are tough, they don't keep doing what they have always done, spending what they have always spent. They start from scratch."
Perry said the state of the state "is strong," citing the recent decision of Toyota to build an $800 million truck plant near San Antonio. He said his concern is state government, which has grown by 125 percent since 1990.
"Texans elected us to set priorities, not to raise the price of government," he said, outlining cost cuts that he said would reduce state spending by $9.5 billion over the next two years. He recently asked state agencies to come up with $700 million in cuts in the current fiscal year.
Perry also proposed creation of a Texas Enterprise Fund to help expand the state's economy and protect the state against future economic downturns. The initiative would be financed with $390 million from the state's Rainy Day fund.
In other areas, Perry called for reforms in school finance and homeowners and medical malpractice insurance. He asked for legislation to meet the states clean air obligations, homeland security requirements, and transportation needs.
The state's Democratic Party chairwoman was critical of Perry's proposals.
"The governor painted a pretty picture today, but the truth is that he and Republican legislators have presented an agenda that will undermine the quality of life in Texas," said Molly Beth Malcolm.
"Democrats have a different vision for our state's future. We not only want to protect the quality of life in Texas, we want to improve it -- with better schools, healthcare, consumer protection and environmental preservation."
Malcolm said Republicans want to abolish the current school finance system, which she said would reduce funding to 85 percent of the school districts in the state. The current law takes money from property-wealthy districts to help more poor districts.
Malcolm said Perry ignored his responsibility by proposing a zero-based budget with no specific recommendations for spending.
"We started this legislative session with a budget shortfall. Now, it appears we have a leadership shortfall, too," the Democratic leader said.
