With the elections finally over, increased scrutiny will be sure to follow Texas as Arizona, Colorado, Maine, and Washington all approved ballot provisions to raise their minimum wage. In all four cases, the minimum wage will be increased to at least $12 per hour by 2020.

While these states already had minimum wages slightly above the federal requirement of $7.25 per hour, their resurgence increases pressure on the twenty states that still operate at the federally mandated minimum wage. However, this should not be an alarm to Texans that we lag behind as increases in the minimum wage in the Lone Star State are aimed to stint growth, lower employment, and upend economic freedom.

Currently, Texas has it in statute Labor Code Section 62.051 that “an employer shall pay to each employee the federal minimum wage.” Should the federal government choose to follow the path of these most recent four states, Texas looks to lose more than any other state in the country primarily due to its low cost of living. With a wage floor moving in the direction of the often referenced $15 “living wage,” research indicates that Texas could lose nearly one million full time jobs—more than any other state.

Perhaps even more damaging, any raise in the minimum wage would be detrimental to Texas’ “economic freedom” rating as an increase would be viewed as increasing government regulation. Texas currently ranks third best in economic freedom nationwide. This is worth noting due to the strong correlation between high economic freedom and higher wages due to increased free market activity.

As these four states raise their minimum wage, they jeopardize hundreds of thousands of jobs and the incomes of all of their citizens. Most notably, Maine and Washington place themselves in even more precarious situations as they are already in the bottom 20 percent of the economic freedom ranking.

Even though this election would appear to continue a trend of minimum wage increases, Texas shouldn’t take part in these job-killing measures. For those who view the minimum wage as a manner of assisting low-skilled, hard-working Americans, the best solution is simple: create more jobs, don’t eliminate them. This entails the Texas Legislature limiting the size and scope of government by passing conservative budgets and putting the business franchise tax on a path to elimination.

http://www.texaspolicy.com/blog/detail/just-say-no-to-a-higher-minimum-wage-texas 

As the calendar year inches its way to a close, the 2017 Texas Legislature is primed to start session in January with an increasingly tight budget brought on partially by the slowdown of the oil industry. This has created a buzz around the state regarding spending money from the state’s Economic Stabilization Fund (ESF), often referred to as the “Rainy Day Fund.” 

Texas voters overwhelmingly approved the creation of the ESF in 1988 as a means to help cover tax revenue shortfalls that had led to large swings in taxes and government spending. Funded predominantly by a portion of natural gas and oil production taxes, collectively called severance taxes, the ESF is expected to total $10.4 billion by the end of the current 2016- 17 biennium.

The Foundation recently released a paper detailing the specifics and issues related to the ESF
including the following recommendations on how to reform it:

1. Limit the use of the ESF “at any time and for any purpose” by increasing the required vote count from two-thirds of members present in each chamber to four-fifths of all members in each chamber;
2. Pass a constitutional amendment to lower the ESF’s maximum cap of 10 percent of biennial general revenue (GR) related funds to 7 percent. Research indicates that such a reduction would safeguard Texas from budget instability by covering most, if not all, of budget shortfalls during the most “severe” recessions; and
3. Require funds that would ordinarily remain in GR if dollars exceeded the ESF cap would instead reduce government by primarily returning the dollars to taxpayers or secondarily paying down mounting state liabilities.

Texas’ Legislative Budget Board (LBB) recently published research directing attention toward the often-overlooked effect of federal funds on calculating the ESF cap. Federal funds were typically deposited into special funds outside of GR before the ESF. However, with the abolishment of most special funds in the early 1990s, federal funds were consolidated into GR and initially represented only 1.5 percent of deposits into GR while increasing to 30.3 percent in 2015. 

With federal funds now representing a significant portion of the deposits that are used to calculate the 10 percent ESF cap, the level of the cap has grown at a more rapid pace. With the 2016-17 biennium cap of $16.2 billion, the expected ESF balance of $10.4 billion is at 64 percent of the limit. The LBB notes that if federal funds were eliminated from the calculation, the ESF’s new cap would drop to $11.4 billion, bringing the expected balance to 91 percent of the cap. Similarly, pursuing the Foundation’s recommendation of lowering the cap from 10 percent to 7 percent of GR-related funds, including the current deposits of federal funds, would also drop the cap to approximately $11.4 billion. Implementing either option would mean that funds could soon exceed the cap and allow those dollars to be returned to taxpayers to reduce the size and scope of government.

Whether legislators would prefer to lower the percentage of total GR used to calculate the ESF cap or eliminate federal funds from the calculation, the message is clear that options on how to best use taxpayer dollars are available so that Texans benefit.

http://www.texaspolicy.com/blog/detail/should-federal-funds-drive-texas-rainy-day-fund-cap