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Everything's Subsidized in Texas

For several years now, Texas has been the conservative model for responsibly budgeting by avoiding "big government." Here's Kevin Williamson:

Governor [Rick] Perry sums up the Texas model in five words: “Don’t spend all the money.” Here’s what a good long run of small-government, low-tax conservatism has achieved in Texas: Once a largely agricultural state, Texas today is home to 6 of the 25 largest cities in the country, more than any other state. Texas has a trillion-dollar economy that would make it the 15th-largest national economy in the world if it were, as some of its more spirited partisans sometimes idly suggest it should be, an independent country. [...] Saying no at just the right time sometimes means turning down “free” money from Washington. Texas left $556 million on the table when the federal government offered it to help modernize Texas’s unemployment trust fund, because the deal would have forced state taxpayers to pour additional revenue into the system after Uncle Sam’s bequest was tapped out.

And Rich Lowry:

In Texas in recent decades, the watchwords have been prudence and stability in the course of nurturing a pro-business environment, while California has undergone a self-immolation that Pres. Barack Obama wants to replay nationally.

And Arthur Laffer

One would think – considering the recent budget fiasco in California – that a modern state needs a steeply progressive tax code just to survive. The case of Texas is a clear counterexample, showing that these fears are simply a myth. In the long run, there is no trade-off between healthy government finances and a competitive business environment.

And "AEI senior fellow" Newt Gingrich:

How do we reconcile America's resistance to further taxation with the dire need to overhaul a broken budgeting process in bankrupt state capitals and in Washington? Texas can serve as a pro-business, anti-waste model that could be replicated across the country. The state's long-term budgeting strategies, business incentives and wise exploitation of its natural resources have left it in sound fiscal shape.

Of course, now we know that Texas is facing a massive budget shortfall - up to $25 billion on a two-year budget of $95 billion (far larger than Rick Perry predicted), but Williamson and other conservative commentators have a backup argument:

Texas’s low-B.S. approach...also left Texas with surpluses that allowed the state to put about $10 billion in its rainy-day fund, which could come in handy now that the economy seems to be clouding up a little. Could, but probably won’t: Republicans plan to introduce a budget that comes in within current revenue without touching the rainy-day fund. Get your head around that: There’s a multibillion-dollar pot of cash sitting there in front of politicians who must be just slavering inside at the thought of it, and they aren’t going to touch it — even though they have a pretty good excuse. Imagine a Congress that could do that. They haven’t delivered yet, but Perry’s Republicans did the stand-up thing last time around and reaped the rewards. Expect them to do it again.

If by "stand-up thing," you mean "use federal money to hide your deficit," then sure:

NEW YORK (CNNMoney) -- Texas Gov. Rick Perry likes to tell Washington to stop meddling in state affairs. He vocally opposed the Obama administration's 2009 stimulus program to spur the economy and assist cash-strapped states.
Perry also likes to trumpet that his state balanced its budget in 2009, while keeping billions in its rainy day fund.
But he couldn't have done that without a lot of help from ... guess where? Washington.
Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures.
Texas, which crafts a budget every two years, was facing a $6.6 billion shortfall for its 2010-2011 fiscal years. It plugged nearly all of that deficit with $6.4 billion in Recovery Act money, allowing it to leave its $9.1 billion rainy day fund untouched.
"Stimulus was very helpful in getting them through the last few years," said Brian Sigritz, director of state fiscal studies for the National Association of State Budget Officers, said of Texas.
Even as Perry requested the Recovery Act money, he railed against it. On the very same day he asked for the funds, he set up a petition titled "No Government Bailouts."