On Tuesday, Jan. 29, Texas Governor Perry gave the State of the State address to a joint session of the Senate and House of Representatives. His address focused on numerous key priorities necessary to keeping our economy and business climate strong. 

In his address the Governor expressed his support of funding the statewide water plan and using Rainy Day Fund money for new transportation projects as well as calling for an end to diversions to the state highway fund. His remarks addressed the need to cut taxes and his support of making the franchise tax exemption for small businesses permanent. Below please find his key messages from his address as supplied by the Governor’s Office to TAB.


•  True up the budget and move away from budget gimmicks. The budget needs to pay now what is due now.

•  Stronger constitutional limit on spending – ensuring spending does not grow more than the combined rate of inflation and population growth.

•  We should continue to scrub the budget for any waste and redundancies, streamlining wherever possible.

•  End the practice of using dedicated funds and specific fees for anything other than the purpose for which they were intended. If the money is no longer needed for that purpose, we should stop collecting it.

•  Maintain a strong Rainy Day Fund and do not tap the fund to meet ongoing expenses.


•  Provide significant tax relief. OOG will have web site to gather input over next six weeks.

•  Put a mechanism in place so that when the state brings in more than it needs, tax money can be returned directly to the people who paid it. Currently, our constitution does not have such a provision.

•  We need to make the franchise tax exemption for small businesses permanent.


•  Significant one-time capitalization of Infrastructure projects.

•  State Highway Fund appropriations should go only toward transportation. Ending other uses will provide $1.3 billion of ongoing biennial funding for road construction and maintenance.


•  Create more public charter schools to offer parents a tuition-free alternative to their neighborhood school.

•  Introduce scholarship programs that give students a choice over which school to attend, especially those who are locked into low-performing schools.

•  Provide choice for students and their parents giving them more flexibility within their high school career to prepare them for different post-secondary options.


•  Colleges and universities should continue pursuing $10,000 degree options. Thirteen schools have answered the challenge to date.

•  Implement a four-year tuition freeze for incoming freshmen that will lock tuition at the rate students pay their first semester for four years.

•  Tie a minimum of 10 percent of college and universities' state funding to the number of degrees and certificates awarded.

•  Pass legislation to encourage and incentivize more fast track programs that enable students to earn technical certifications faster, more affordably, and targeted to specific skills in demand by industries.

•  Will announce a proposal to substantially increase investment in South Texas.