You really want to give one of the worlds largest economies up? I'm not so sure you thought this through, fella.
Good riddance. It will save us some of the Federal dollars you don't care to see spent. I wouldn't be sad.
Texas can no longer complain that it gives more than it gets from federal government
WASHINGTON — Resenting the federal government is as Texan as wearing cowboy boots.
From its past life as a sovereign nation to its present status as the crucible of anti-Washington politics, the Lone Star State has independence in its DNA.
One frequently cited validation for that go-it-alone attitude is that Texans get a bad deal by paying more in federal taxes than they receive in federal spending. For decades, that was true: Texas received 90 cents or less for every dollar its residents and businesses sent to Washington.
But that’s no longer the case. Thanks to demographic shifts, a surge in military spending and other factors, Texas has crossed the break-even line. In six of the past eight years, including the entire tenure of President Barack Obama, Texans got more out of the federal Treasury than they put in.
Republican state officials and candidates have recently shifted their attention to arguments about the size of government rather than bang for the state’s buck. Ted Cruz, the GOP nominee for Senate, rarely mentions the disparity issue — one that the senator he’ll likely replace, Kay Bailey Hutchison, frequently tried to fight.
And the situation is not likely to flip back soon: With an exploding population of younger, more urban and increasingly poor residents — and a state government making cuts to its already minimal spending — more Texans will rely on the federal government for basic services in the years to come.
The federal government spent about $9,000 per Texan in 2010. The state spent $2,200 — one of the lowest outlays in the country, according to the National Association of State Budget Officers.
“If not for federal money, there just wouldn’t be much provided at all in some public services, and it’s pretty low to begin with,” said Eva De Luna Castro, a budget analyst for the Center for Public Policy Priorities in Austin, which advocates for poor and middle-income Texans. “We’re at the mercy of whatever happens in D.C.”
A boom in entitlement programs illustrates the change in the state-federal relationship.
In 2001, the federal government gave a combined $41 billion in benefits to Texans enrolled in Medicare, Medicaid and Social Security, according to Census Bureau data.
The cost of those programs more than doubled by 2010, the most recent available data, to $94.2 billion. But the population grew by only about one-fifth.
One reason entitlement spending rose so sharply is that Texas had more poor residents at the end of the decade. The share of Texans living in poverty grew faster than overall population growth and hit 18 percent in 2010, up one-third from a decade earlier.
At the same time, defense spending skyrocketed after the Sept. 11, 2001, attacks.
Texas has several of the nation’s biggest military installations, including Fort Hood and Fort Bliss. A decade of war, combined with a post-Cold War redeployment from overseas bases, has brought a flood of new money.
Together, spending on the military and the major entitlement programs saw a 139 percent increase last decade and now accounts for about two-thirds of federal spending in Texas.
Money for all other federal programs increased, too, but at about half that rate, 73 percent. That adds up to about $78 billion per year for Texas now.
Funding for both NASA and the Postal Service has been relatively stagnant, with both beginning and ending the decade between $4 billion and $5 billion in Texas. The Environmental Protection Agency, which spends most of its money in the state on water safety, rose slightly to $450 million.
The Department of Transportation increased spending in Texas from $3 billion to $5.3 billion. The lion’s share goes to highway construction, which is funded primarily through the national gasoline tax.
Lone Star politicians have long complained about Texas’ status as a “donor” state when it comes to gas tax receipts and highway spending. But a 2011 report by the Government Accountability Office found that all 50 states received more than they paid from 2005 to 2009; Texas got $1.03 for every dollar it paid in gas taxes.
The state of the economy matters, too: Washington is spending more than ever, much of it at a deficit, but tax collections are relatively low, partly as a result of efforts to spark economic growth.
Income taxes static
While federal spending per Texan almost doubled since the millennium, residents and businesses now pay the IRS about the same as they did a decade ago.
In 2000, Texans paid $5,024 on average to the U.S. Treasury through individual taxes. They paid $4,664 in 2010 and $5,094 in 2011.
Texas businesses paid $17 billion in corporate taxes in 2000, and $16 billion last year. Much of the stagnation can be attributed to the combination of economic headwinds and income tax cuts signed by President George W. Bush in 2001 and 2003, and extended by Obama last year.
In the 2010 race for governor, Rick Perry scored points with conservative voters by labeling Hutchison, his GOP primary opponent, the “earmark queen.” He also attacked her for failing to deliver enough federal funding for highways in Texas.
That’s a seeming contradiction. But the tactic tapped into fundamental views, and it worked.
“Successful political leaders recognize the ability of their voters to want contradictory things and manage those contradictions,” said Jim Henson, director of the Texas Politics Project at the University of Texas at Austin.
But to span the old Texas spirit of independence and the new reality of federal largesse, Perry and other Texas politicians have refocused the vitriol on the ways the federal government spends money, rather than how much it sends into the state.
"It’s always been a campaign issue to campaign against Washington, D.C., and federal intrusion, regardless of what the numbers really say,” said Todd M. Smith, a GOP strategist who works with candidates for the Legislature and Congress.
One longtime lawmaker, Rep. Joe Barton, R-Arlington, said he is satisfied that Texas now receives a fair share of federal spending. But it still gets a “bad deal,” he said, because Congress often places requirements on states to receive federal funds.
“The Texas attitude is to the largest extent possible, ‘Leave us alone; don’t mess with Texas; we want to do it for ourselves,’” Barton said. “And as the federal government becomes more mandatory and pre-emptive … [Texans] resent Washington.”
To Democrats, Republicans who keep a tight fiscal ship in Austin “hypocritically prop up the state of Texas with federal money and at the same time rail against the federal government,” said Matt Angle, a Texas Democratic strategist.
But Angle concedes that suspicion is entrenched.
“I don’t think there’s ever going to be affection in Texas for the federal government or any big institution, and that includes Democrats,” he said.