TEL It Like It Is: Why Texas Needs Spending Limit Reform
Although Texas has done better economically and in many ways fiscally than most states during much of the past two decades, consistently limiting the state’s budget needs improvement. The 2016-17 all funds budget of $209.4 billion is up 8.8 percent above population growth plus inflation since 2004, costing a family of four $1,251 more per year. A primary factor driving excessive budget growth is the state’s weak tax and expenditure limit (TEL). Legislators can strengthen the TEL by capping the total budget, basing the growth on the lowest of three metrics, and requiring a supermajority vote to exceed it. If these reforms would have been in place since 2003, Texans could have $17 billion more in their pockets while covering the needs of the state. To slow the growth of the total budget and limit the state government’s growing burden on Texans, legislators should make the following reforms to the Constitution or in statute to improve the state’s TEL: (1) apply the TEL to the total budget and to all state funds; (2) base the limit on the growth rate of population plus inflation, personal income, or gross state product (GSP), whichever is less, for the two years immediately preceding the regular legislative session when the budget is adopted; and (3) require a supermajority vote of each chamber to exceed its limit rather than just the simple majority vote in statute today.