Before the 2015 Legislative Session, the Texas Public Policy Foundation and the other 14 member organizations of the Conservative Texas Budget Coalition recommended a budget, shown in Chart 1, that increased the budget by no more than population growth plus inflation of 6.5 percent for the next two fiscal years.
Chart 1: The Conservative Texas Budget Won During the 2015 Legislative Session
This spending limit was not in statute. This was not in the Constitution. Critics claimed it could not be done.
But through the hard work of state leadership, members of the 84th Texas Legislature, and the Conservative Texas Budget Coalition, tax cuts were the top priority rather than aiming to spend every taxpayer dollar. In the end, this helped to accomplish the task of passing a conservative budget.
Chart 2 presents evidence that both all funds and state funds increase less than 6.5 percent. Specifically, the 2016-17 Texas budget increases all funds by 3.6 percent to $209.4 billion and state funds by 5.8 percent to $141.4 billion.
Chart 2: Comparison of Major Revenue Sources in the Conservative Texas Budget
Percent changes from previous period in parentheses.
Charts 3, 4, and 5 provide comparisons of appropriations by article for all funds, state funds, and general revenue funds, respectively.
Chart 3: Increase in 2016-17 All Funds Budget Below 6.5% for a Conservative Budget
Chart 4: 2016-17 State Funds Increase Below 6.5% for a Conservative Budget
Chart 5: General Revenue Funds Increase by More than 6.5%, but the Total Budget Did Not
We applaud the state leadership and the Legislature for passing a conservative Texas budget that is within taxpayers’ ability to support it, avoiding the threat of burdening taxpayers with the expectation of higher future taxes and fees.
The combination of limiting spending to less than the 6.5 percent increase in population growth plus inflation and $4 billion in historic tax and fee relief provides an opportunity for all Texans to achieve greater prosperity through fiscally conservative principles.
Texas can prosper under the guide of a stronger spending limit that covers more of the budget based on population growth plus inflation, which the Texas Public Policy Foundation has recommended for years.
Lieutenant Governor Dan Patrick said recently that the budget will remain under population growth and inflation while he is in office. That’s terrific news for Texans and another reason to add to the long list of reasons the spending limit should be reformed next session.
It’s a good day to be a Texan and to have the opportunity to prosper from a conservative budget and historic tax relief this session.