One last chance to reform Texas’ spending limit this session
Among the bills stuck in this legislative limbo is S.B. 9, which would tighten Texas’ spending cap. Currently, Texas law provides that “rate of growth of appropriations in a biennium from state tax revenues not dedicated by the constitution may not exceed the estimated rate of growth of the state’s economy.”
While legal limits on spending are a good thing, Texas’ spending cap could stand to be tightened. Right now, government spending is allowed to grow at the same pace as the economy, meaning that the better Texas does economically, the bigger the government we may end up with. But a more prosperous society ought to be able to be less reliant on government. The current limit also does not cover all types of state spending.
Instead, increases in spending ought to be limited to what’s necessary to take account of changes in population and inflation. S.B. 9 does that, and the latest proposal by the Senate members of the House-Senate conference committee also expands the types of spending that would be covered by the limit:
The Senate negotiators have countered with a slight revision of Hancock’s Senate-passed bill. It would combine general-purpose state revenue, dedicated state revenue and other funds into a new category that would be the spending base. That’s the sum against which the new cap would apply.
Of course, a spending limit is just that. There is no requirement that the Legislature spend up to the limit, and this year’s budget, which increased spending by less than population and inflation, shows that this can be done. But government is under a constant temptation to spend as much as it can, and legal limits on spending make it easier for legislators to resist this temptation.
A proposal to limit spending increases to population and inflation while expanding the covered spending is sensible policy. The Legislature should not let this last chance pass for real spending limit reform this session.