*Note - Gov. Perry frequently departs from prepared remarks.
Thank you, Del [Threadgil, Chairman, TTARA] and congratulations on your leadership of this important group.
It is great to be here today with a group of like-minded individuals.
Now, we may not all hail from the same side of the political aisle but I believe we're kindred spirits when it comes to taxes including my favorite kind: low taxes.
I am convinced that our efforts to keep the tax burden low in Texas the second lowest in the nation, according to The Economist have been a determining factor in our state's comparative economic strength as our nation endures a set of economic conditions that we honestly haven't seen in our lifetimes.
I'm reminded of the report that renowned economist Arthur Laffer produced last year comparing things in California and Texas carrying the impact of tax policy to a clear bottom line.
Now, our nation's overall economic numbers have gone steadily downward since this time last year but I believe Laffer's findings still hold true because the principles of economics still apply and history doesn't change either.
I'll be honest with you--we took a lot of grief in 2003 with the changes we implemented in our state's approach to taxing and spending.
Our critics loudly condemned us, claiming our efforts to cut taxes and limit spending would spell doom for our state.
Instead, those efforts set the philosophical tone for government spending and government growth in Texas and transformed our state.
They worked because they were based on the premise that the dollars we discuss and appropriate come from the pockets of our citizens not some magical, bottomless pot of money.
Would you agree with that? Every dollar the government takes means less money for employers to hire more workers less money for families to invest in their children's college education less money for our citizens' retirement or savings.
The relative prosperity our state enjoys today would have been hard to imagine in 2003 when we were staring at a $10 billion budget shortfall.
Nowadays, Texas leads the nation in exports and Fortune 500 companies and companies across the country are looking to us for relief as their home states raise their taxes, pile on the regulations and allow frivolous lawsuits to devour resources.
Texas was one of only two states whose credit rating was actually upgraded in 2009 by any of the top three rating agencies with Standard and Poor's citing our strong credit diverse economy and low tax-supported debt burden. The word on Texas is getting out there, and the word is good.
For example, CEO Magazine has identified Texas as the best place to do business for the past four years.
Moody's Economy just included seven Texas metro areas in their list of "first cities to emerge from recession."
CNN picked Texas as a tax haven for small businesses, based on our low tax burden and efforts to foster economic development.
Forbes Magazine just included all 4 major Texas metropolitan areas Dallas-Ft. Worth, Houston, San Antonio, and Austin in the Top 10 of their list: "America's Recession-Proof Cities to Retire In."
I believe that our strength is based on our efforts to avoid spending all the money keep the regulations predictable ensure our legal system is fair and create an accountable public school system. Those four pillars have made us strong and that strength makes us competitive with other states for jobs, investment and opportunity.
Laffer's report definitely validated our persistent refusal to adopt a personal income tax, especially compared to California.
Knowing that a Texas company will earn about $50 more per $1,000 of net income than its California counterpart is an eye-opener.
Add in the positive impact on dividends which yields another $65 per $1,000 for Texas-based, Texas-owned companies and you're really talking about a reason to get to Texas.
I suspect the good folks at Toyota considered factors like that before they shut down their California plant and moved those operations to San Antonio.
It would be tempting to look around at our strong economic indicators, shrug our shoulders and say "look what we did "we're done, let's take it easy." I could think of no worse reaction. We did not get here by accident and we will not continue our progress by taking our eye off the ball.
I firmly believe that the long-term strength of our state has more to do with staying true to our state's conservative fiscal principles and continuing efforts to free up the private sector to create jobs and generate wealth.
I believe our legislature took another step in that direction during this year's legislative session.
As you know, we passed legislation in 2006 that reduced the property tax burden in our state leveled the playing field for Texas businesses and updated our tax code to reflect the realities of the modern-day economy.
As the new approach took hold, we discovered that the tax was having a disproportionately heavy impact on the smaller businesses those making between the original $300,000 revenue cap and $1 million per year so we discussion about a modification. While it didn't change essential elements of House Bill 3 from 2006 like making education funding more predictable and lowering overall tax rates on businesses House bill 4765 revised the definition of tax-eligible companies raising the annual revenue ceiling of $300,000 to $1 million.
As a result, roughly 40,000 small businesses across Texas are able to hang onto more of their dollars and plow them back into their businesses in the form of new hires, new equipment and the like.
There aren't many other states that could extend a tax cut to small businesses in these tough economic times. I am proud that Texas did.
As we continue to deal with the challenges of these tough economic times, there will, no doubt, be calls for us to increase taxes.
We need organizations like yours to continue singing the praises of a sensible tax policy and making the case for our state's lighter tax burden. As we hold the line, our critics will howl louder than ever but we've heard their negative song before.
We owe it to our citizens to risk those slings and arrows.
We owe it to our citizens to defend conservative fiscal principles and make Texas even more competitive drawing even more investment creating more jobs and sustaining Texas as a beacon of hope.
That is my goal and I hope you'll join me.
May God bless you all and, through our efforts, may He continue to bless the great state of Texas.