Two Years After Big Cuts, Battle Over Budget Caps Looms

After the Legislature cut billions of dollars from the state budget in 2011, some hoped to see at least some of the funding restored in 2013. But with the next legislative session quickly approaching, others are pushing to limit that spending.

By law, Texas lawmakers can’t increase state spending by more than the rate of personal income growth, which is set before each legislative session by the Legislative Budget Board. The board recently set that rate at 10.7 percent, or about $7.5 billion more than the present budget.

But immediately, Republicans on the budget board, led by Lt. Gov. David Dewhurst, said they would use a different standard to cap state spending.

Audio: Ben Philpott's story for KUT News

“My position is that it is the intention of the Senate to produce a document that is at or below inflation plus population growth,” Dewhurst said.

And there just happens to be a resolution filed to make that standard — inflation plus population growth — the new budget cap in Texas.

Supporters say that if that cap had been in place over the last 20 years, it would have led to a state budget about 40 percent smaller than the current one.

Mandy Rafool of the National Conference of State Legislatures said only two states have similar caps: Colorado and Ohio. And whether or not you think the caps have succeeded there depends on your point of view.

“If your goal is to shrink government, then you can make the case that they have worked,” Rafool said. “If you think that government services need to maintain a certain level, then when the economy shrinks, the base shrinks.”

In other words, in a recession, spending is cut because revenues are down. But when revenues return, the state can’t increase spending as fast as some would like.

Opponents say that would handcuff state government and block lawmakers from doing what’s needed for the state. That argument appears to have found some traction in the last state that attempted to pass the population-and-inflation growth cap.

“The most recent one was in Florida, just this past November,” Rafool said. “And it failed by a pretty wide margin.”

The resolution in the Texas Legislature has been proposed by Sen. Dan Patrick, R-Houston. And with the state’s Republican leadership already promoting a tighter budget cap, the bill may have an easy trip through the Legislature.

If it passes, voters will have the final say. It would be on the ballot as an amendment to the state Constitution next November.