Governor Perry spoke at a luncheon of the Bay Area Houston Economic Partnership at the NASA Hilton.
Last month, he unveiled the Texas Budget Compact. In addition to no new taxes, it calls for a constitutional limit on spending tied to inflation and population growth, and using the rainy day fund only for one-time emergency expenditures.
"Not as a place that you go to, well 'let's go take some money out of the rainy day fund, because we don't have enough courage to say that we don't have the money to go spend.' Most of you don't have a rainy day fund, whether it's in your business or your personal life. And if you do, you want to make sure that that expenditure is about a one time expenditure, and not dip it into it for continual operation. There's a point in time where those types of things catch up with you."
He says the Texas Budget Compact, if implemented, will create a more transparent and efficient state government.
"I don't get confused that government creates jobs. We don't. What we can do is, we can create either incentives for people to risk their capital, or we can put up barriers, and cost more, regulate more, litigate more. And in those states that have allowed that to happen, they're generally at the bottom of that list, of best places to do business."
Perry said he'll ask lawmakers to use any savings found in state government to pay off the debt that's been adding up.
"First of all, we need to cover the shortfall for the ten billion-plus dollar shortfall from last session."
Houston Democratic Representative Garnet Coleman thinks the Governor's vision will come at the expense of vital services.
"We need to make sure that we fully fund public education, mental health, things for the disabled, and fix our circumstance where Governor Perry has leveraged every dollar in our highway program, so that we don't have any money to do highways. And so I don't know what you do about that, other than raise the gasoline tax."
Perry proposed his budget compact less than a year after lawmakers approved a two year budget, that included $15 billion in cuts and before a session that will force Coleman and other lawmakers to make even more hard choices.