Texans deserve a transparent Texas budget.

The Foundation provides more budget transparency by publishing The Real Texas Budget and an associated worksheet with our data since the 2004-05 budget.

We find that the 2014-15 (adjusted) total budget is up 13.4 percent above population growth plus inflation since 2004. We understand that this is at odds with the Legislative Budget Board’s reported adjusted total budget decrease of 1.2 percent since 2002 as noted in their table published in August 2013.

Let’s consider the following changes we made to accurately compare past budgets and calculate our 2014-15 budget of $203.8 billion that’s greater than the LBB’s $200.5 billion:

  1. As directed by the 83rd Legislature, the LBB moved $6.1 billion in patient income to higher education-related facilities off-budget in the 2014-15 budget (see notes and sources). We remove this amount in each of the previous budget periods going back to 2004-05 to provide an apples-to-apples historical comparison.
  2. We include HHSC’s total legislative appropriations request of $2.6 billion ($1 billion in general revenue) in the 2014-15 budget (see page 17). This is not included in the LBB’s figure.
  3. We include the updated amount of $1.7 billion that is to be spent in fiscal 2015 from the voter approved Proposition 1 for transportation projects in the 2014-15 budget (see slide 10). The LBB only includes $878.6 million.

Reasons for the adjusted budget percent change differences:

  1. The LBB uses a different budget as a baseline. They use the 2002-03 budget that was one of the largest budgets Texans had seen in recent history. We use the 2004-05 budget because it is a decade worth of budget data and the most conservative budget we’ve seen recently. By using the high watermark 2002-03 budget as a baseline, this leads to their lower adjusted budget percent change.
  2. The LBB uses the population growth times inflation metric to calculate adjusted budget figures over time. We use the population growth plus inflation metric. In general, their metric minimizes changes in adjusted budgets because mathematically it grows at a faster rate than does ours.

Specifically, our metric tends to be a better representation of the cost of providing public goods and services because it accounts for economies of scale, whereby the average cost of providing these goods and services tends to fall over time.

On the other hand, their metric assumes that every new person in Texas must have an increase in cost to the government. This is not so. We do not need to build a new bridge, school, or park every time the population increases. Our metric accounts for this.

  1. The LBB accounts for property tax relief since 2007. However, there was at most only two years of property tax relief so it is not appropriate to include these adjusted data. This money simply went to fund education at a higher level. If this adjustment is not included, the LBB presents a 6.3 percent increase. We do not account for property tax relief because it didn’t provide much, if any, relief.

Like the LBB, we use the U.S. Bureau of Labor Statistics’ consumer price index (CPI) that’s considered a credible approximation of the average costs of goods and services to calculate inflation. Some advocates of higher government spending point out that the CPI doesn’t accurately reflect the goods and services the state purchases, such as steel and concrete. Road construction and maintenance was less than 10 percent of the state budget in 2003. Consider that from 2003 to 2014 the Federal Highway Administration’s national highway construction cost index, which includes steel and concrete, increased 10 percent while the CPI increased by 29 percent. Thus, including rising construction costs since 2003, rather than simply using the CPI, would result in a lower state budget.

Bottom line: Our numbers are solid and all published on our website for all to view. Unfortunately, the problem here is not our numbers, it’s the temptation for government to spend every available tax dollar.