Today, the Legislative Budget Board (LBB) released the official 2018-19 appropriations growth limit based on projected personal income of 8 percent for the upcoming two fiscal years. The Texas Public Policy Foundation’s (TPPF) Director of the Center for Fiscal Policy, the Honorable Talmadge Heflin, and TPPF Economist, Dr. Vance Ginn, made the following statements to highlight a conservative budget that increases by no more than the increase in population growth plus inflation of 4.5 percent in the last two fiscal years.
“While the constitutional spending limit is 8 percent, we encourage members of the Texas Legislature to better that by adopting a conservative Texas budget that increases spending by no more than 4.5 percent, the increase in population growth plus inflation in the last two fiscal years,” said Mr. Heflin. “Keeping spending in check this session would be a historic accomplish, marking the first time in years that the Legislature did this in back to back budget cycles.”
“Texas’ total budget is up 11.8 percent above increases in compounded population growth plus inflation since the 2004-05 budget, which amounts to average Texas families of four paying $1,600 more in taxes this year,” said Dr. Ginn. “When government spending increases by no more than population growth plus inflation, the rising cost to taxpayers of funding government remains lower while incentivizing dollar efficiency in programs. Reducing the growth of government will benefit all Texans by curing the disease of excessive government spending instead of just treating the symptoms of too high taxes.”
Background: The Texas Constitution limits the growth of appropriations from state revenue not dedicated by the constitution, which is less than half of the total budget, to the estimated rate of growth of the state's economy. The committee of the governor, lieutenant governor, speaker of the house, and comptroller has 10 days to formally adopt the appropriations growth limit, either as submitted by the board or using another measure of the growth of the state’s economy.
The Foundation is one of 13 member organizations of the Texas Conservative Budget Coalition that has recommended passage of a conservative budget that increases by no more than 4.5 percent based on the rate of population growth plus inflation in the two most recent fiscal years. Using the 2016-17 base budget of $141.1 billion in state funds and $209.1 billion in all funds, the 4.5 percent limit provides maximum spending limits of $147.5 billion in state funds and $218.5 billion in all funds for the 2018-19 budget.
The Honorable Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. In the 78th Session, Heflin served as chairman of the House Committee on Appropriations and navigated a $10 billion state budget shortfall through targeted spending cuts that allowed Texans to avoid a tax increase.
Vance Ginn, Ph.D., is an Economist at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.
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The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin, Texas.