Fiscal Policy

The Texas Public Policy Foundation highlighted the fact that the current budget increase was almost twice what was reported.

The Texas Health and Human Services Commission recently suggested in their legislative appropriations request that more funds will be needed for the upcoming biennium. However, they estimate that higher caseloads and rising medical costs during the current budget cycle could require passage of a much larger $2.6 billion supplemental bill early next session. This amount pushes total state spending up to $204 billion for a whopping 10-percent budget increase.

Since the federal government picks up 60 percent of Medicaid costs and the state funds the rest, the state’s tab would be roughly $1 billion. You can quickly see that the state is on track to bust the constitutional spending limit by $737 million, since initial appropriations were only $263 million under last session’s $85.2 billion spending limit.

Legislators could make this difficult decision to bust the cap by holding a simple majority vote. However, to tap the brakes of an ever-expanding footprint of state government, state officials should find cost savings elsewhere to avoid this costly vote and keep the economy humming along.

Many Texans know all too well what it’s like to live on a tight monthly budget. Budgeting in this fashion is stressful but necessary to live within one’s means. As the end of the month approaches, every purchase must be carefully considered to break even.

Though this applies to Texas families, the Texas Legislature plays by a different set of rules. Despite a spending limit that theoretically binds legislators’ expenditures of general revenue not dedicated by the constitution, they can bust the limit with a simple majority vote.

Such an act would grow the footprint of state government while the base for all future budgets ratchets up. This would cost financially prudent families more to fund state spending while giving them less to budget monthly — from no fault of their own. With fewer dollars exchanging hands, the economy would tend to slow as well.

With the 2015 legislative session right around the corner, many lawmakers are staking their claim on the large stash of cash the state will likely have available from a thriving economy. Times like these are tough for conservative-minded legislators as the calls mount to spend these taxpayer dollars on the border, education and transportation. Other options should include returning excess revenue to Texans by cutting taxes — such as eliminating the state’s costly business tax.

Before making these decisions, legislators will be wise to avoid busting the state’s spending limit. Though it may be late in the game, there are alternatives to fund the overage of $737 million given the political will to act.

The governor and Legislative Budget Board could withhold funds from agencies who expect to have a surplus, cut nonessential agency programs, or cut a certain percentage from all agencies across the board.

These steps would avoid busting the spending limit and keep more hard-earned money in Texans’ hands. That’s where opportunity and prosperity are born.