By Scott Nishimura email@example.com
Texas remains in good economic position, but it faces a number of “long-term challenges,” including the need to fund public education, find a permanent way to finance highway infrastructure, and maintain the water supply, the Texas economist Ray Perryman said Wednesday in Fort Worth.
State Comptroller Susan Combs reported to Gov. Rick Perry in November that Texas finished fiscal 2013 with a cash surplus of more than $8 billion, sure to set off budget wrangling heading into the next Legislative session, and Perryman said “we need to spend that money.
“We’re not spending enough on schools, we’re not spending enough on infrastructure,” he said at a business breakfast attended by about 300 at the Ridglea Country Club. “There’s a whole host of things. You can be too frugal.”
Not investing now would hamper the state’s ability to draw corporate relocations in the future, Perryman said.
“We have to commit a certain number of resources,” he said. “If we don’t have enough educated workers, we don’t bring in all these companies…If we spend a little money right now, we’re gong to remain a low tax state for a long time.”
In response to an audience member’s question, Perryman said it’s likely that many legislators view extra funding for public schools as superfluous, because many of the constituents they listen to have children in private schools.
“If you look at the demographics, that’s a very misguided view,” Perryman said. “A lot of the folks who are going to live in this state over the next 40-50 years are going to be in the public schools.”
Perryman projected U.S. growth of 2.5 to 2.8 percent this year. The economy has been growing since the recession at 1-2 percent per year, as compared to the normal 3 percent coming out of a recession, he noted.
“It seems like the whole economy had a bellyache, and when that happens, you stay in bed,” he said.
Perryman addressed the fiscal impasse in Washington, particularly the fight over the debt ceiling, which the country has periodically had to raise to cover its obligations.
“The president made a mistake” during the 2011 big fight over the ceiling, Perryman said. “He negotiated about the debt ceiling. We do not have any choice. If you’re spending more than you take in, and you don’t have a savings account, you have to go out and borrow more money. This is not a subject you’re supposed to negotiate a compromise on. It’s just something you do.”
Perryman said Texans need to reach consensus on a way to fund highways, noting polling shows Texans are at conflict with themselves, wanting more roads, but shunning paying for them, allowing more toll roads, and letting foreign companies build them.
“This is going to take leadership and creativity to get that done,” he said.
Perryman said he’s not worried about a real estate bubble in the state.
“Right now, we’re still far enough from capacity, I don’t see that right now,” he said in response to an audience member’s question. “You want real estate to react to the economy. That’s what seems to be happening right now. You see a whole lot of space going up, but you see a lot of it pre-leased.”