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Legislators Should Be Careful with Our Money

Commentary

This article originally appeared in the Austin American-Statesman on 1/20/2013.

Last week, the Texas House of Representatives and the Texas Senate unveiled their proposed budgets for the 2014-2015 biennium. The proposals seek to spend between $1.59 and $1.76 billion, respectively, more than the budget set two years before. Yet there are some disappointed with this increase in funds — not for the sake of taxpayers, who had hoped more streamlining and efficiencies would permit a decrease in state tax dollars expended — but rather because they don’t think the Texas Legislature is spending enough.

To be clear, the budget for state tax dollars, not including federal funds, was $82 billion dollars in 2010. In 2012, that budget grew to $87 billion dollars. Between 2014 and 2015, the Legislature seeks to spend just around $89 billion general revenue dollars — almost $3,500 per every man, woman, and child in Texas.

And yet some say this year-to-year-to-year increase is not enough. Some voices in Austin are decrying the fact that the Legislature showed restraint when Texas’ comptroller, Susan Combs, announced she was predicting $96 billion in revenue over the next two years and didn’t swell the budget to a size sufficient to spend every last penny.

We’ve heard those voices before. For decades those same voices have urged expansive, risky spending by the federal government in Washington. Those voices, which abhor both caution with a taxpayer’s dollar as well as a reduction of spending in any department at any time, do not concern themselves with overspending that leads to deficits nor the resulting debt.

Texas, thankfully, has not yet found itself listening so closely to those voices as Washington does, and Texas must remain on that path through the following three guideposts.

First, a budget that comes in under revenue estimates reflects Texas values and what the Legislature truly thought was a priority for taxpayer dollar expenditures. To be fair, the Texas Public Policy Foundation may quibble on some of those specifics within the budget, but the fact that the budget does not match revenue estimates penny for penny reflects an unwillingness to spend for spending’s sake, and careful consideration of our state’s needs. This quality is one Texas will need to continue to celebrate and protect in this budget cycle and into the future.

Second, a budget spending less than revenue estimates provides breathing room that estimates may change. Comptroller Combs uses all of the available tools and information, but unforeseen events — especially in a national economy at risk of recession, and a state that has seen its fair share of hurricanes and wildfires — can sometimes drastically impact revenue estimates. By creating a bit of budgetary breathing room between expenditures and the revenue estimate, the Legislature has wisely provided a safety valve in case of changed forecasts. To not do so would risk driving Texas down the same path as Washington.

Third, spending less than revenue estimates intrinsically evinces respect for Texas taxpayers. The name “revenue” obfuscates the underlying nature of those dollars. The vast majority of “state revenue” originated as a tax expenditure by an individual taxpayer in the form of sales tax, a Texas homeowner in the form of property tax, a Texas corporation in the form of the margins tax, or via one of the other taxes and fees we Texans all pay.

Just because the Legislature is estimated to come into possession of that revenue does not automatically mean they should spend it — and to refrain from doing so perhaps suggests that the taxpayer who gave it to them in the first place has been considered. Perhaps the budget writers also considered refunding that dollar back to taxpayers, or not taking it from them in the first place in the next biennium. But none of those considerations exist until budget restraint is shown such that general revenue expenditures fall below revenue estimates.

We Texans, as well as the Legislature, have quite a bit of work in the next few months. The budget will be continually debated, amended, and edited before reaching its final form. We must continue the conversation that every Legislature has about Texas priorities and how to best protect those priorities. But we should pause, first, to appreciate the fact that the opening salvos lobbed by legislative budget writers reflect Texas restraint, a respect for future generations, and consideration of today’s taxpayers by spending less than revenue estimates. We must start this process somewhere, and that may be one of the best places to start it.