AUSTIN – The Texas Public Policy Foundation joined several other research, business, and taxpayer groups at the Texas State Capitol today to deliver "Blueprint for an Effective Budget," an agreed-upon set of guidelines for the Legislature to draft an effective state budget.

"Our legislators will have difficult budget decisions to make over the next few months," said The Honorable Talmadge Heflin, Director of the Texas Public Policy Foundation's Center for Fiscal Policy. "If they follow these guidelines, they can maintain essential services for the citizens of Texas while positioning our state for a strong economic recovery."

Heflin called for the 81st Texas Legislature to preserve a balance of at least $4.5 billion in the state's Rainy Day Fund, and to use it only for emergency tax relief or one-time expenditures.

"Yes, we are in a rainy day, but no one knows for sure how long this storm will last," Heflin said. "Texas families have the instinct to stretch their emergency savings as long as possible, and state government needs to show that same discipline."

Heflin also urged the legislature to proceed with caution regarding the pending federal stimulus legislation.

"While we expect there will be some money, it is not guaranteed and we do not know what forms it might take," Heflin said. "This money should be treated the same as our rainy day fund – for use on one-time expenditures."

The blueprint includes several guidelines on how to responsibly establish spending priorities.

"The mathematical task of closing a budget shortfall can be straight forward – just cut everything across the board," Heflin explained. "But writing an effective budget in these times requires that you separate needs from wants, and that you prioritize your spending based on what you're required to do – first by the Texas Constitution, then by state law – and by what produces the greatest value to the taxpayers."

Heflin said that it was important for the Texas Legislature to continue the state's movement toward complete financial transparency.

"Through websites like the Comptroller's Where The Money Goes and our own TexasBudgetSource.com, we're engaging all Texans in the effort to ferret out waste and fraud in government spending," Heflin said. "We need to ensure that all budgets, expenditures, contracts, and other relevant financial information are published online in a searchable and user-friendly format."

The nine guidelines in the "Blueprint for an Effective Budget" are:

– Limit the growth of state spending to no more than the sum of population growth plus inflation, or the growth in personal income, whichever is less. – Prioritize state spending on the basis of constitutional mandates, followed by statutory requirements. – Return excess fee and tax revenues to those who paid them. – Limit the use of the Rainy Day Fund to either emergency tax relief or one-time emergency spending items. – Maintain a Rainy Day Fund balance of at least 5 percent of the general revenue and general revenue-dedicated funds spent in the 2010-11 budget. – Make it easy to identify and report government fraud and waste by posting all budgets, expenditures, contracts, and other relevant financial information online in a searchable and user-friendly format. – Structure state agencies' performance measures to reflect outcomes rather than outputs. – Fund only those programs that return a greater value to the taxpayer than the program's cost. – Avoid duplication of services by focusing on programs that are not provided by local governments or the private sector.

"Blueprint for an Effective Budget" and the Texas Public Policy Foundation's research on state tax and budget issues can be on the Foundation's primary website, http://www.TexasPolicy.com, and on its government spending transparency website, http://www.TexasBudgetSource.com.

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. Heflin served 11 terms in the Texas House of Representatives and chaired the House Appropriations Committee in 2003, leading the Texas Legislature's successful efforts to close a $10 billion budget deficit without a tax increase.

The Texas Public Policy Foundation is a non-profit, non-partisan, free-market research institute based in Austin. More information can be found on the Foundation's primary website, www.TexasPolicy.com, or its government spending transparency website, www.TexasBudgetSource.com.

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