Even as the 83rd Regular Legislative Session comes to a close, there are many important bills that have yet to cross the finish line. The success or failure of these bills will impact the future prosperity of the state and may well determine whether Texas continues down the path of limited government and unlimited prosperity or California-style stagnation.

Among the major pieces of legislation moving through the process now are: Senate Bill 1, Senate Joint Resolution 1,House Bill 7, House Bill 500, and House Bill 1025. For better or worse, these bills touch everything from the state budget to state spending limitations to tax reductions to the rainy day fund.


  • Senate Bill 1: SB 1 is the state’s two-year, $195 billion budget for fiscal 2014-15. Compared to last session’s budget, All Funds appropriations for fiscal 2014-15 have increased roughly 12 percent and General Revenue appropriations by about 15 percent. Compared to what is likely to be spent in fiscal 2012-13, or the budgeted amount, the state’s 2014-15 budget appropriates about 3 percent more in All Funds and approximately 7.5 percent in General Revenue funds.

To their credit, lawmakers have, thus far, kept the growth of the state budget within the parameters of the state’s constitutional spending limit, addressed some of the spending gimmicks of the past, and left room in the budget for tax cuts; however, this has not been achieved without controversy.

  • Senate Joint Resolution 1: SJR 1 is a constitutional amendment which, if approved, would allow lawmakers to spend $2 billion out of the rainy day fund for water infrastructure projects. As a matter of policy, this is not the ideal approach as it would have been more prudent to work within existing funds rather than tap into the state’s rainy day fund, or savings account, especially when the state’s coffers are flush.
  • House Bill 7: HB 7 as amended by the House would, among other things, limit the growth of certain state spending to the lesser of the revenue estimate; the estimated rate of growth of the state’s economy; or population and inflation. This particular provision was stripped by the Senate, but it’s a critical taxpayer protection that the House would be wise to fight for in conference committee. 

In addition, the bill would not only return to taxpayers $631 million from the Systems Benefit Fund, but in doing so, it would also take some fairly significant steps forward in addressing budget writers’ use of General Revenue-Dedicated (GR-D) funds in the budget certification process.

  • House Bill 500: HB 500 is a bill that offers significant business tax relief to Texas’ small businesses and entrepreneurs. Though the House and Senate versions differ in their methodology, both bills offer in excess of $625 million in tax relief over the coming biennium, and possibly more going forward depending on which version the final bill resembles more, the House or the Senate. Finally, lawmakers in both chambers are taking the appropriate action to make permanent the $1 million small business exemption, a move that will benefit thousands of small businesses and entrepreneurs throughout the state.
  • House Bill 1025: HB 1025 is the state’s second supplemental appropriations bill, potentially increasing spending by even more this biennium. One provision in HB 1025 that is particularly troublesome is the proposal to spend $500 million more on public education, throwing more money at a broken system without any reforms.

Given the magnitude of what’s at stake-the success of the Texas economy, job growth, and sustainable governance-the Foundation urges the Legislature to exercise the same manner of fiscal discipline in the closing days of the 83rd legislative session that it has in past sessions, of the very same mold that has played such an unequivocal role in transforming Texas into America’s economic engine. Conservative governance is a proven winner, and it would be ill-advised to stray from that path now.

As a final thought, consider these words from Thomas Jefferson: “A wise and frugal government… shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”