This commentary originally appeared in the Austin-American Statesman on June 3, 2014.

To provide Texans with a more transparent picture of the state’s budget, the Texas Public Policy Foundation delves into the state’s historical spending and appropriations trends since fiscal year 2004 in our recent report, “The Real Texas Budget.”

During the 83rd Legislative Session, Texas legislators passed a 2014-15 budget that the Legislative Budget Board calculates has total appropriations of $200.4 billion, or a 5.1 percent increase over the previous biennium’s spending level.

Legislators have moved specific line items off the budget many times over the years. There is nothing wrong with this practice. However, this practice does become a problem if line items that are moved off-budget are not appropriately accounted for in previous biennia.

Last session legislators made $6.1 billion in patient income and associated expenditures to higher education-related facilities disappear from the current budget. No problem there. However, there was no adjustment made for this change in previous biennia, making historical budget comparisons problematic.

In our report, we remove patient income of $5.5 billion in the 2012-13 budget and the appropriate amounts in previous sessions since 2004 to make apples-to-apples budget comparisons. This change alone better reflects the increase in the current budget, showing it increased by 8.2 percent instead of the reported 5.1 percent.

Another pressing problem is the rising amount legislators are required to fund Medicaid. Considering the likely increase in caseload and the associated cost, there will likely be a $1.5 billion gap to fund next session. Since these funds are for the current two-year period, we include this amount in the current budget to provide a clear picture.

Including these changes to patient income and the Medicaid amount, we calculate appropriations to be a total of $201.9 billion, costing the average family of four roughly $30,000 to fund state government. This total budget is a 9 percent increase over the previous biennium — almost 80 percent higher than the percentage increase of the adopted budget.

Looking over the past decade and the next two years, we project total state government spending to be roughly $1 trillion. However, if spending growth had been limited to key metrics like population growth and inflation that account for the government’s cost of funding infrastructure and services, the tax bill for Texans would be much lower today. We find that during this period the excessive growth of spending above these simple metrics will cost taxpayers $16.3 billion this biennium.

If the Texas model of low taxes and limited government that has contributed to a vibrant economy and robust job growth is to be sustained, appropriate measures are needed to make the budget process more transparent.

One measure legislators should take to increase transparency is to provide budget documents online in near real-time throughout the legislative process. The budget board’s State Budget by Program online application is a good step in this direction.

In addition, the Legislature could increase transparency and practice more fiscal restraint by shifting from a strategy-based budget approach to a program-based budgeting method.

There are many reasons to be thankful to be a Texan; legislators should add more reasons by increasing transparency and being good stewards of taxpayer dollars.

 

Heflin is director of the Center for Fiscal Policy at the Texas Public Policy Foundation. He may be reached at theflin@texaspolicy.com.