There is only one piece of legislation the state constitution requires the Texas Legislature to pass after it convenes Jan. 8: The budget.
The battle over tens of billions of dollars in state spending has already begun, as has the discussion on how to limit growth of that spending for future budget cycles.
State leaders have pledged to spend no more than $77.4 billion in nondedicated funds for the next budget cycle after the Legislative Budget Board set a mandatory spending growth cap at 10.71 percent in November.
They could tighten the belt even further if conservative lawmakers can muster support for austerity.
“The current fiscal crisis in Washington illustrates the consequences of fiscal irresponsibility: when spending is unchecked, and when vast deficits are accrued, the economy is at grave risk,” said John Colyandro, executive director of the Texas Conservative Coalition Research Institute, in a statement. “Excessive government spending begets higher taxes, which penalize job growth, investment, savings and innovation in the private-sector economy.”
But more left-leaning lawmakers cautioned against making decisions too early that might further limit spending on necessary services for Texans.
“As a legislator, I would not be representing my district in Houston if I were to not ensure that Texas moves forward in a responsible way that provides for the growth of its citizens and the needs of its children, the elderly, colleges, universities, financial aid for college students, and middle-income Texans,” said Rep. Sylvester Turner, D-District 139, vice chairman of the House Appropriations Committee and a veteran of the budget writing group in that chamber.
The percentage adopted unanimously by the board, a permanent joint House-Senate committee that advises the Legislature on the budget, is the amount the state comptroller’s office projects for the state average per capita income growth during that budget period from 2014–15.
The Texas Constitution requires that lawmakers increase the amount of spending from cycle to cycle only at a rate matched by personal income growth.
Gov. Rick Perry and Lt. Gov. David Dewhurst, both Republicans, have expressed support for changing the law to require that rate be set by the percent of inflation and population growth, a lower figure than personal income growth. A resolution to that effect has already been filed.
Meanwhile, Dewhurst has said he is going to push for that standard on spending for this cycle as well, aiming to hold the figure to less than 10 percent.
House Speaker Joe Straus, R-San Antonio, who along with Dewhurst is co-chairman of the LBB, cautioned against making too many commitments or decisions on the budget before the entire 181-member Legislature had a chance to weigh in.
Conservatives said strengthening or lowering the cap should be part of any plan to reign in or prevent runaway spending.
“Texas, where we must balance the state budget every two years, is a superior model to Washington,” Colyandro said. “To ensure that Texans are able to keep more of the dollars they work to earn, the existing constitutional state spending limit should be strengthened, zero-based budgeting adopted and 'truth in budgeting' practiced. These three tools will help restrain the reach of government.”
The current budget, passed by the Texas Legislature in 2011, includes $70.4 billion in nondedicated spending within the entire $173.5 billion budget for 2012–13, passed last session with a record $15 billion in cuts.
Nondedicated revenue is largely dependent on sales taxes and funds the budget requests of state agencies, which oversee—and pay for—programs such as electricity bill subsidies and financial aid.
The rest of the budget—just slightly more than $100 billion in the current cycle—is funded primarily with federal funds and dedicated general revenue such as franchise taxes, gas taxes, cigarette taxes and others collected for specific purposes.
While lawmakers have an idea of how much their nondedicated spending will be, they must wait until immediately before the session convenes in January for the state comptroller to tell them how much the state has collected in dedicated revenue.