Texas’ prosperity hinges on keeping state government lean, effective, and within its proper role. While the state’s constitutional balanced budget restrictions protects Texans from Washington D.C.-style deficit spending, our weak spending limit is allowing government to grow faster than it should.
Our current spending limit in Article VIII of the Texas Constitution reads:
“In no biennium shall the rate of growth of appropriations from state tax revenues not dedicated by this constitution exceed the estimated rate of growth of the state’s economy. The legislature shall provide by general law procedures to implement this subsection.”
The statutory definition of “growth of the state’s economy” adopts a standard of personal income growth. Measures of this projected growth are submitted by several groups to the Legislative Budget Board before each legislative session. These estimates typically extend out 33 months, which leads to inevitable discrepancies in actual and projected growth rates.
Rather than use metrics that project how much government Texans can afford, legislators should instead use metrics tied to population and inflation growth. Such metrics are the truly best measures that account for the cost of funding public goods and services to a changing population. In other words, how large do Texans really need the government to grow, if at all.
Such a change would bolster economic growth in Texas by reigning in the growth of state bureaucracy.
A report found that since fiscal year 2004, the state budget has grown 11.8 percent over population and inflation. Had a stronger constitutional spending limit been applied then, Texans would have saved estimated 29-37 percent off the current FY 2016-2017 state budget.
Recent developments in reforming the limit include State Sen. Kelly Hancock’s (R-Fort Worth) SB 9 from last session, which passed the senate, but was subsequently gutted in the House Appropriations Committee and killed by newly-retired chair John Otto (R-Dayton). Additionally, GOP activists voiced strong support for strengthening the spending limit in near-unanimous passing of a Republican Party Platform plank calling for the institution of population and inflation measures.
Limiting the size and scope of the Texas budget only means more freedom for Texans, and fine-tuning our approach to the spending limit would be a great step towards securing responsible stewardship of fiscal matters for generations to come.