A Budget Spending Spree Like No Other

May 9, 2023
Bill Peacock
88th Legislative Session, Budget Surplus, Property Tax, Spending

Texas is often thought of as a conservative state.

Teachers, for instance, complain about inadequate spending on public education and low salaries. Democrat State Rep. James Talarico (Austin) has argued that the low salaries are “pushing teachers out of the classroom.” America’s Health Rankings recently ranked Texas as the worst state in the nation for clinical care due to low spending on healthcare.

So it might come as a surprise to many that Texas is in the midst of a historic spending spree during the Texas Legislature’s current legislative session.

First, a little background. In 2021, Texas was coming out of the COVID lockdown economy like the rest of the country. State revenues were down. However, rather than keep spending in line with the lower revenue, state leaders gambled. They passed a budget as if Texas had much more money than it did, but they purposely underfunded certain large programs. The hope was that they could return this year and fill in the holes in the budget if revenue increased. Did it ever!

In his Biennial Revenue Estimate (BRE) in January, Texas Comptroller Glenn Hegar estimated that the Texas Legislature had an unprecedented $188.2 billion in state general revenue (GR) funds to spend. Comparing that to the $109.8 billion the Legislature appropriated in 2021 provides a clear understanding of how much the Legislature’s bet paid off.  

As a result, they are doing everything they can to spend their newfound $78.4 billion windfall. Between two different appropriations bills this session (SB 30 and HB 1), the Legislature is on track to spend $171 billion in GR funds, a spending increase of $61.2 billion. And taxpayers are not faring well when it comes to the Legislature’s largess.  

For instance, in the Texas Senate’s proposed budget, Texas energy companies would receive a $13.9 billion payout. Medicare and healthcare spending would increase by $12.9 billion. Only then do taxpayers come into the picture, with $9.8 billion for property tax relief.

Yet instead of devoting more than only 12.5 percent of the surplus funds to reducing property taxes, the legislative spending spree continues, with $5.5 billion of increased spending on higher education, $2.3 billion for hospital construction, $2 billion for retired teachers and state employees, etc. The list goes on.

The Legislature is not blind to what it is doing and how taxpayers might react to being second fiddle to special interests in Austin. This is evident in the numerous budget gimmicks the Legislature is using to hide billions of dollars of its spending.

One example of this is the $10 billion the Texas Senate wants to use to funds its proposed Texas Energy Insurance Program. The money would be used to pay energy companies to build electric generation plants that would usually sit idle but could be turned on during times of high demand. But rather than appropriate the money now so the money shows up in spending totals, the Senate would wait to actually appropriate the funds and would only transfer them to remove the possibility of using them for property tax relief.

Additionally, the Senate is actually using property tax revenue to support increased spending of state funds while hiding this from taxpayers. Last year, school property taxes increased by 13 percent, or $5.3 billion. The Legislature used these and other funds to reduce state spending on public education by $8 billion. But rather than return those funds to property owners, the Legislature went on a mini-spending spree by increasing spending on other items in the current fiscal year by $13 billion. But because of their reliance on using property taxes, the Legislature reported a spending increase of only $5 billion.

Back in January, Texas taxpayers had high hopes that a significant part of the reported $32.7 budget surplus for the current biennium would be returned to them in the form of property tax relief. But that surplus and billions of dollars more look to be heading into the bank accounts of other people and Big Business.

Yet the session is not over. Texans should speak out now to explain to the politicians in Austin where their priorities should be. 

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