eTexas Speech

Jan. 2003

At the start of every New Year, many folks resolve to do things, such as losing weight or quitting
smoking.

During my swearing-in ceremony last week, I remarked that the Legislature must resolve to get a
better handle on how it spends the taxpayers’ money.

Although our last budget was balanced, I was the first to wave the red flag and warn that the
legislature was mortgaging our future for the present. The way they balanced the budget was to
create a multi-billion dollar shortfall right off the bat for the next legislative session, which starts in
four days.

What that means, in simple terms, is that the government either needs more of your hard-earned
dollars to keep spending where it is, or existing programs and agencies must be cut.

Since I issued that warning, our economy has been hit by successive waves of bad news, from the
collapse of the tech bubble, to the tragedy of 9/11, to the problems with corporate integrity
following on the Enron and WorldCom debacles. We have not dropped into a recession in Texas,
but basically our state’s economic engine has sputtered and lurched instead of roaring ahead as it
did in the 1990s.

Despite these events, when I closed the books on our last fiscal year, I not only collected the $61.7
billion in revenue that I said I would collect, but an additional $32.9 million to boot. It was perhaps
the most precise revenue estimate in history. That means revenue met outgo on the final day of the
year.

I have waited as long as necessary so I could watch every possible economic indicator before
releasing the next revenue estimate, which I will do the day before the Legislature gavels open next
week.

The last Legislature had a large reserve -- and spent it all. Budget writers may not remember it this
way, but lawmakers in 2001 spent every dime available.

In other words, the last Legislature threw a party and left this one with a hangover.

Some have said that our budget, with its complex spending formulas and required expenses, has
long since been scrubbed clean. Well, as the mother of four sons and grandmother of four
granddaughters—all of whom have been known to get dirt behind their ears— I can tell you, if you
look hard enough, you can always find someplace else that your washcloth hasn’t yet reached.

And that’s part and parcel of the infection that courses through the halls of the Capitol. Too many
lawmakers refuse to attack the sacred cows that live off the fat of the land—your tax dollars.
But this is no time for a band-aid. This budget needs major surgery, or our state government will
not survive.

The e-Texas recommendations I am unveiling today offer an immediate shot in the arm for our
ailing economy. During the last session, I brought lawmakers a report very similar to this one, and
they chose to ignore about 75 percent of the savings I identified—leaving more than $1 billion in
savings on the table.

Instead, they opted to forge ahead with the shortsighted tax-and-spend mentality that has infected
the Capitol in the last decade.

The spending spree of the last legislature – and legislatures before it – must be corrected. The
mandate of the people last November obligates those of us in public office to begin a new era of
fiscal reform; one that encompasses discipline, accountability and a new respect for each and every
tax dollar.

I promise to be the voice of leadership during this very difficult session—a force that lawmakers
will ignore to their own peril. A voice offering direction that was sorely lacking in the last session. I
offer to helm this rudderless ship and guide our great state through these rough budgetary waters.

I promise to help you hold the Legislature accountable for every nickel they spend this session.

These new, bold and innovative initiatives could save Texas as much as $1.4 billion over the next
two years—and with a projected shortfall significantly higher than the $5.2 billion I warned about
two years ago, lawmakers should stand ready to either put these savings in place, or face the wrath
of an overtaxed and angry electorate.

I am not suggesting it will be easy. It will take a great deal of soul-searching and insightful
consideration of state services to find well-reasoned and logical spending reductions like these that
do not impact Texans’ quality of life. That’s what ‘Limited Government, Unlimited Opportunity’ is
all about—making the state government leaner, but not meaner.

Some folks have said cutting the bureaucracy cannot be done and that new funding sources must be
discovered. That’s another way of calling for higher taxes or the imposition of a state income tax.
Those are two things I believe Texas families and businesses can ill afford in these sluggish
economic times; and those are two things I will vigorously oppose.

A few of the ideas in this report, I have mentioned many times before, such as applying my
‘Yellow Pages Test’ to government—making sure that government does no job that can be done
better by a business in the Yellow Pages at a lower cost.

And some of the proposals are controversial, such as my plan to merge the Railroad Commission
and the Public Utility Commission into one agency.

But as I have repeatedly said, government will be seen as bigger, dumber and slower than ever
before if we do not get smaller, smarter and faster right now.
Thankfully, I believe this Legislature understands that the excess spending of the past is not the
wave of the future. Texas families and Texas businesses have tightened their belts; it’s time for
Texas government to do the same. This year the purse strings are drawn tight and temptations must
give way to necessities.

I look forward to working with the Legislature to ensure that my e-Texas proposals become reality.