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    • ECON 2301-Princ of Macro
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Spotlight Series Recap of Articles in the #Texas Budget

5/27/2016

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​Yesterday, the Legislative Budget Board (LBB) released the Fiscal Size-Up 2016-17 Biennium that chronicles the $209.1 billion budget the Legislature passed last session.

The Conservative Texas Budget Coalition, comprised of the Foundation and 12 other prominent organizations, have called for a second consecutive conservative Texas budget, elimination of the business margin tax, more budget transparency, and other key items. For maximum transparency, budget data should be available online throughout the legislative process and be broken down by program instead of by opaque strategies.

To provide increased budget transparency, the Foundation released six papers in the Spotlight series that highlight each of the ten articles of the Texas budget. In addition to providing taxpayers with timely information about where their tax dollars are going, this series also provides more information about budget trends since the 2004-05 budget in each article and identifies functions that increase by more than 6.5 percent from the previous budget.

The 6.5 percent figure was the maximum growth rate that the Coalitionrecommended for the 2016-17 budget based on the rate of population growth plus inflation during fiscal years 2015 and 2016. We are working on providing a similar figure for the next budget in the next month or so before agencies begin submitting their legislation appropriation requests.

The Foundation recently had a commentary in the Austin American-Statesman that highlighted the Spotlight series. Here is key information from that commentary with links to each of the papers for your convenience.
  • Article I is $6.3 billion for general government functions. This article has increased by 80 percent since 2004-05 and is up 17.5 percent from the previous budget, both outpacing the key measure in each period. The largest appropriations increase of 691 percent was in the Facilities Commission, primarily for new buildings.
  • Article II is 37 percent of the budget, making it the second-largest item. Its $77.2 billion budget for health and human services functions has increased 76 percent since 2004-05 and only 3.3 percent from the previous budget. It was the largest item for the first time in Texas history in the 2014-15 budget and likely will continue to increase. Driving this growth is a 14.9 percent increase in the Department of Family and Protective Services for foster care and a rising amount to behavioral health services that now totals $6.7 billion.
  • Article III, the largest budget item, includes K-12 and higher education that totals $78.6 billion. The current budget is up 59 percent since 2004-05 and up the largest amount of $3.9 billion, or 5.1 percent, from the previous budget.
  • Article IV includes the judiciary. Article V includes funds for public safety and criminal justice. These two articles have increased by less than the key measure compared with the previous budget but the judiciary budget has increased by 88 percent since 2004-05.
  • Article VII relates to business and economic development and includes the Department of Transportation and Texas Workforce Commission. It’s budget increased by 77 percent since 2004-05 and by only 1.7 percent from the previous budget. Article IX includes appropriations to general provisions that apply to multiple articles, and no amount is usually included in the final budget. However, $390.2 million is included in the current budget for salary and benefits increases.
  • Articles VI and VIII showed decreases in the current budget, but that doesn’t tell the entire story. Appropriations to Article VI, which is for natural resources functions, declined by 37 percent because of a one-time amount of $2 billion for water projects in the previous budget. However, it increased by 86 percent since 2004-05. Funding for regulatory functions, Article VIII, declined 18 percent primarily because of a one-time decrease in the Public Utility Commission’s system benefit fund for the low-income electricity discount program.
  • Article X includes functions related to the Legislature that includes the Senate, House of Representatives, and Legislative Council. Appropriations increase by $12.1 million, or 3.2 percent, to $386.1 million in the 2016-17 all funds budget.

It’s important to watch each article closely to ensure that the 2018-19 budgetdoesn’t exceed population growth plus inflation to keep a solid economic foundation for Texans to prosper.
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    Vance Ginn, Ph.D.
    Chief Economist
    ​TPPF
    ​#LetPeopleProsper

    Vance Ginn, Ph.D., is founder and president of Ginn Economic Consulting, LLC. He is chief economist at Pelican Institute for Public Policy and senior fellow at Young Americans for Liberty and other institutions. He previously served as the associate director for economic policy of the White House’s Office of Management and Budget, 2019-20.

    Follow him on Twitter: @vanceginn

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