A few hours after unveiling his campaign for president, Perry began walking back from one of the most controversial decisions of his more-than-10-year reign as Texas governor. Speaking to voters at a backyard party in New Hampshire, Perry said he was ill-informed when he issued his executive order, in February 2007, mandating the HPV vaccine for all girls entering sixth grade, unless their parents completed a conscientious-objection affidavit form.
As Volsky shows, Perry claimed on multiple occasions that he believed that the order was the right thing over the last four years. Suddenly, the decision he has defended all this time has become an “ill-informed” one. In fact, as Reihan notes in his discussion of Perry’s record here, Perry’s original decision was an ill-informed one:
Mann doesn’t even mention the fact that many public health advocates considered Perry’s decision to mandate Gardasil unwise, as the vaccine had only recently been deemed safe enough for widespread use.
That suggests that Perry’s original paternalistic decision, which he regularly defended for years, was a blunder, but it has only been because of the new scrutiny he faces as a presidential candidate that he was willing to admit as much publicly.
A more serious policy blunder, and one that has had significant consequences for Texas’ budget, is the misguided “business-margins tax,” which taxes the gross income of businesses rather than taxing just profits as the old franchise tax did. Reihan quotes from an article in The Texas Observer:
The idea was to cut property taxes and replace the lost revenue with a new business tax.
This 2006 tax “swap” was the one instance during Perry’s decade as governor when he proposed a wide-ranging plan and successfully pushed it through the Legislature mostly unchanged. It’s perhaps his signature legislative accomplishment.
Problem is, it’s been a disaster. Small businesses don’t like it. Some conservatives hate it—in fact, a few believe Perry’s business tax is unconstitutional. Worst of all, the tax doesn’t generate enough revenue. The tax swap has cost the state $5 billion a year for five years running. The Texas budget now faces an ongoing structural deficit because of the underperforming business tax.
The National Federation of Independent Businesses denounced the tax as a failure earlier this year:
“We look at the tax as an abject failure,” said Hoke, “because it’s crippling the small and mid-sized businesses without bringing in what (the legislators) thought. It’s a lose-lose scenario.”
How much of a difference has the change in tax law made to small businesses? According to the NFIB communications director, quite a lot:
And although some have had increases of only $200 or so, “Most companies have seen a 100-500 percent increase,” she reported.
Yes, Perry certainly sounds like the natural candidate to address mounting federal debt and tax reform.
Update: Peter Suderman explains how Perry has been papering over the structural deficit his failed tax law has created. Last year, he used $6 billion in stimulus funding to make up almost the entire deficit, and he has resorted to Pawlenty-esque budget gimmicks in other years:
According to a report by ABC News, Perry’s budget also closed a big part of its budget gap by delaying a $2.3 billion education payment a single day. Thanks to that one-day delay, the payment will fall into the next budget year, and therefore will not technically affect the current year’s budget.