A soaring unemployment rate, shrinking revenues, wage freezes, pay cuts, slashing state programs to make up a budget shortfall. Sound familiar? This was Illinois earlier this decade when oil prices were at their peak and this is Texas today.
It is tempting to gloat about this reversal in fortunes but that would be wrong, mean-spirited and unkind–even though they did gloat. Besides which, it can come back to haunt you. As they say, what goes around comes around.
Texas, which is extraordinarily dependent on oil and gas taxes, is in such a sorry state because of the oil price collapse that it has called a special session of its legislature to keep the state treasury from running out of money. The state has a 10-gallon budget deficit, somewhere between $2.2 billion and $3.5 billion.
Texas has no personal or corporate income tax, but indications are any politician who proposed one would receive the Ogilvie treatment, named in honor of the former governor of Illinois who became the former by doing just that.
So Texas likely will make do with budget cuts, wage cuts, creative bookkeeping, what is being called an ”emergency temporary oil and gas replacement tax,” which translates to an increase in the sales tax, and fervent prayers that this time OPEC will stick to its quotas.
