After reviewing the Conference Committee’s Report for HB 1, which is the 2016-17 Texas budget, the results are in: Texas Taxpayers Win!
Before the 2015 Legislative Session began, the Texas Public Policy Foundation and the other 14 members of the Conservative Texas Budget Coalition recommended a budget, shown in Chart 1, that increased 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
Through the hard work of the Coalition and the action taken by members of the 84th Texas Legislature, tax cuts were the top priority instead of it being to spend every taxpayer dollar collected by the state.
This led to HB 1 meeting the criteria of a conservative Texas budget.
Chart 2 presents evidence that both all funds and state funds increase less than 6.5 percent. Specifically, this 2016-17 Texas budget that will be voted up or down by both chambers soon 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 Show 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 Conference Committee HB 1 2016-17 All Funds Budget Below 6.5%
Chart 4: Conference Committee HB 1 2016-17 State Funds Increase Below 6.5%
Chart 5: General Revenue Funds Increase by More than 6.5% in Conference Committee HB 1
We applaud the conferees for putting together HB 1 that’s 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 no more than the 6.5 percent increase in population growth plus inflation and $3.8 billion in historic tax relief provides an opportunity for all Texans to achieve greater prosperity through fiscally conservative principles. Research finds that calculating a broad spending limit based on this metric best constrains the footprint of government.
Limited government spending, lower taxes, and more money in your pocket is what has worked repeatedly nationwide for people to prosper. It’s great news to see Texas leading the way.
We’ve come a long way from the heavy spending of the last decade or so. HB 1 starts us down the path of keeping the Texas budget from increasing more than population growth plus inflation.
Though there has been some concern about changing the calculation of the state’s spending limit, this budget provides a clear indication that Texas can prosper under the guide of this metric covering more of the budget.
Bottom line: It’s a good day to be a Texan and benefit from less growth in government spending and historic tax relief this session.