AUSTIN – The Texas Public Policy Foundation along with the 12 additional member organizations of the Conservative Texas Budget Coalition today released The Conservative Texas Budget. The report’s authors, Talmadge Heflin, Director of the Center for Fiscal Policy at TPPF, and Economist Dr. Vance Ginn use a calculated state spending growth limit based on population growth plus inflation of 4.5 percent over the previous two fiscal years (FY 2015 & 2016) to set spending limits of $147.5 billion in state funds and $218.5 billion in all funds.
“The evidence is clear: low tax, low spend states perform better than high tax, high spend states. To cut the tax burden on Texans from previous spending excesses, the Texas Legislature should build on the momentum of last session by passing a historic second consecutive conservative budget,” said Heflin. “Doing so will provide the state with at most a spending increase of $9.4 billion to cover basic public necessities while prioritizing spending and cutting the tax burden on Texas taxpayers so that they can reach their full potential.”
Dr. Ginn added, “The 2016-17 appropriations total is up $22 billion, or 11.8 percent, compared with if the Legislature had followed population growth plus inflation since the 2003 Legislative Session. This excess in budget growth above funding the increased cost in basic public goods and services burdens average Texas families of four with $1,600 more to fund state government this year. To cut this excessive tax burden, the 85th Texas Legislature should pass a conservative budget that increases by no more than population growth plus inflation of 4.5 percent while returning additional taxpayer dollars to hard-working Texans.”
Americans for Tax Reform President Grover Norquist said, “By keeping growth in state spending below the rate of population and inflation when crafting a new budget in 2017, Texas lawmakers will ensure that state government lives within its means. Such spending restraint will also help legislators to get rid of the margin tax, which will ensure Texas remains the economic envy of the nation in the future.”
Americans for Prosperity Foundation Texas State Director Jerome Greener added, “Americans for Prosperity-TX stands firmly for responsible spending and economical budgeting practices in Texas. To compensate for any spending increase, Texan families will be asked to shoulder a significantly heavier tax burden than they otherwise would. It is our hope that the Legislature will recognize the importance of balancing our budget and capping any budget increase to population and inflation to keep our economy strong.”
Liberty Action Texas Executive Director Brendan Steinhauser said, "Texas needs a conservative budget in order to remain a beacon of liberty and opportunity for all Texans. Legislators should follow limited government principles and fight for a budget that limits spending to population growth plus inflation. Texas voters want to see conservative leadership in the capitol, and this is a chance for legislators to deliver just that."
“Texas has proven to be an economic powerhouse over the last decade,” said Clark Packard, National Taxpayers Union’s (NTU) Counsel and Government Affairs Manager. “However, it is vital that Texas adopts a fiscally responsible rate of growth for their budget, which does not exceed inflation and population growth. A budget that exceeds this growth rate will prove detrimental to private sector growth and expand the reach of the state government."
Texas Eagle Forum President Trayce Bradford said, “Today, the Texas Eagle Forum stands united with the Conservative Texas Budget Coalition to support the recommended spending limits for the 2018-19 budget outlined in The Conservative Texas Budget. While many factors contribute to Texas being an ideal state, Texas’ efforts to keep taxes low plays a key role. Unless intentional steps are taken to limit the growth of state spending next session, Texans will eventually find themselves burdened with higher taxes and a less conducive environment to pursue their dreams.”
Our America Initiative Texas Director Gil Robinson said, "Our America Initiative is a grass roots organization that promotes liberty and personal choice through local action. The Texas government has a better record than many states in keeping spending within sustainable limits, but the framework to continue this record can be improved. We encourage the upcoming legislature to adopt a spending limit based on population growth plus inflation to better support the Texas miracle of a growing economy and affordable quality of life for its residents."
"The key to developing good habits is consistency,” said R Street Texas Director Josiah Neeley. “The Texas legislature needs to continue the fiscal discipline it showed over the last two years during the upcoming session."
Pamela Villarreal, senior fellow and manager, Tax Analysis Center, National Center for Policy Analysis, added, “A TEL based on population growth and inflation will benefit the state of Texas in two ways: limiting spending could potentially lead to lowering taxes, which would result in increased investment and personal income in the state. Or, the excess revenue could be put in a rainy day fund, which would cushion Texas in times of economic downturns.”
“The Conservative Texas Budget provides prudent guidelines for how the Texas Legislature can control spending,” said Bob Williams, president of State Budget Solutions. “It demonstrates the clear need for holding down spending growth in the Texas budget so Texans have the best chance to prosper. Legislators can achieve this by passing a budget that holds the increase in appropriations of all funds and all state funds over the current budget to less than the increase in population growth plus inflation."
The Conservative Texas Budget report also highlights how the nine states without an income tax, including Texas, perform better economically than the nine states with the nation’s highest income tax rates. This comparison provides evidence that limiting total state spending is necessary to keep taxes low and to allow Texans the freedom to prosper.
To read the full report, please visit: http://txpo.li/2018-19-conservative-texas-budget
Ph.D. Economist at the Texas Public Policy Foundation. Blog posts are publications by the author.