In the 2011 legislative session lawmakers will have a momentous opportunity to cut the State budget. Our States projected budget shortfall for 2012 - 2013 is estimated to be between $10.8 billion and $17 billion.
This shortfall affords legislators the rare opportunity to make significant cuts to extraneous programs that do not assist state agencies in meeting their core missions - an effort that will once again set Texas lawmakers apart from our wasteful spending counterparts in Washington D.C. The shortfall also encourages our State government agencies to enact cost-saving measures and reductions in their programs and services.
Texas is well-positioned to address the shortfall because of the budget-cutting measures that were undertaken in 2003 when the State met a $7.4 billion shortfall without raising taxes and without dipping into the Rainy Day Fund. These budget cuts did not result in a social or economic crisis.
Rather the cuts positioned Texas as the nations fiscal powerhouse for almost a decade and have helped our State weather the current economic downturn better than all other states. As a direct result of limiting state government growth the fundamentals of the Texas economy are sound - Unemployment is among the lowest in the nation; Texas projected shortfall is smaller than that of most other large states (notably California and New York); and taxes remain relatively low.
Central to the task of repeating the success of the 2003 budget will be a renewed focus on the States core responsibilities and functions with the goal of eliminating discretionary and wasteful spending that fall outside clear State responsibilities. Next legislative session we must focus on passing several important reforms that will limit the growth of our state budget including the following:
Institute a Stricter Constitutional Spending Limit - The current spending limit contained in the Texas Constitution limits the growth of State spending to the rate of growth of the States economy. This definition of growth is too loose and has proven to be ineffective. Limiting state budget growth to the sum of population growth plus inflation would provide the necessary protection for taxpayers.
Dedicate Surplus Revenues to Property Tax Relief and the Economic Stabilization Fund (Rainy Day Fund) - Despite the projected shortfall in 2012 - 2013 the State consistently generates surplus tax revenues which net $27 billion since 1995. The majority of surplus revenues should be returned to the taxpayers in the form of lower property taxes.
These funds should not be used to grow government. A constitutional amendment directing a portion of future State budget surpluses to property tax relief and the Rainy Day Fund would slow the growth of government address the overbearing and increasingly dire financial burden of local property taxation and stimulate the economy by putting more money into the hands of consumers (taxpayers).
Dedicate revenues to projects for which they were originally intended - Many taxes levied by the State most notably the gas tax are constitutionally dedicated to certain funds in the State treasury with the intent that they be spent on specific budget items. However the appropriations process frequently uses these revenues in other areas of the budget which determines the principle of truth-in-taxation. Dedicated funds should be allocated solely to their dedicated purpose or discontinued.
Reconsider the Role of Federal Funds in the State Budget - Across all articles of the State budget federal funds are a major factor behind spending growth. In sum federal funds account for one-third of the entire State budget and are major drivers in the health and human services budget ($39 billion in 2010-11 up from $21 billion in 2002 - 03) and the education budget ($9 million in 2010-11 up from $5.6 billion in 2002 - 03).
Accepting federal funds undermines the principle of federalism by allowing the federal government to wield power over Texas by placing requirements on how federal funds are spent which gives Texas less control and flexibility over its programs. It is vital for Texas to consider the implications of accepting federal funds to expand or create programs. Oftentimes rejecting federal funds as an enticement to create new programs would slow the growth of our State budget. The rejection of the Unemployment Insurance stimulus in 2009 is a positive example of this approach.
Limited government is a pillar of fiscal strength and economic prosperity. We have a tremendous opportunity to reduce the size of our state government and our dependency on the federal government and I will focus my efforts next session to accomplish the aforementioned goals.
In the 2011 legislative session lawmakers will have a momentous opportunity to cut the State budget. Our States projected budget shortfall for 2012 - 2013 is estimated to be between $10.8 billion and $17 billion.
This shortfall affords legislators the rare opportunity to make significant cuts to extraneous programs that do not assist state agencies in meeting their core missions - an effort that will once again set Texas lawmakers apart from our wasteful spending counterparts in Washington D.C. The shortfall also encourages our State government agencies to enact cost-saving measures and reductions in their programs and services.
Texas is well-positioned to address the shortfall because of the budget-cutting measures that were undertaken in 2003 when the State met a $7.4 billion shortfall without raising taxes and without dipping into the Rainy Day Fund. These budget cuts did not result in a social or economic crisis.
Rather the cuts positioned Texas as the nations fiscal powerhouse for almost a decade and have helped our State weather the current economic downturn better than all other states. As a direct result of limiting state government growth the fundamentals of the Texas economy are sound - Unemployment is among the lowest in the nation; Texas projected shortfall is smaller than that of most other large states (notably California and New York); and taxes remain relatively low.
Central to the task of repeating the success of the 2003 budget will be a renewed focus on the States core responsibilities and functions with the goal of eliminating discretionary and wasteful spending that fall outside clear State responsibilities. Next legislative session we must focus on passing several important reforms that will limit the growth of our state budget including the following:
Institute a Stricter Constitutional Spending Limit - The current spending limit contained in the Texas Constitution limits the growth of State spending to the rate of growth of the States economy. This definition of growth is too loose and has proven to be ineffective. Limiting state budget growth to the sum of population growth plus inflation would provide the necessary protection for taxpayers.
Dedicate Surplus Revenues to Property Tax Relief and the Economic Stabilization Fund (Rainy Day Fund) - Despite the projected shortfall in 2012 - 2013 the State consistently generates surplus tax revenues which net $27 billion since 1995. The majority of surplus revenues should be returned to the taxpayers in the form of lower property taxes.
These funds should not be used to grow government. A constitutional amendment directing a portion of future State budget surpluses to property tax relief and the Rainy Day Fund would slow the growth of government address the overbearing and increasingly dire financial burden of local property taxation and stimulate the economy by putting more money into the hands of consumers (taxpayers).
Dedicate revenues to projects for which they were originally intended - Many taxes levied by the State most notably the gas tax are constitutionally dedicated to certain funds in the State treasury with the intent that they be spent on specific budget items. However the appropriations process frequently uses these revenues in other areas of the budget which determines the principle of truth-in-taxation. Dedicated funds should be allocated solely to their dedicated purpose or discontinued.
Reconsider the Role of Federal Funds in the State Budget - Across all articles of the State budget federal funds are a major factor behind spending growth. In sum federal funds account for one-third of the entire State budget and are major drivers in the health and human services budget ($39 billion in 2010-11 up from $21 billion in 2002 - 03) and the education budget ($9 million in 2010-11 up from $5.6 billion in 2002 - 03).
Accepting federal funds undermines the principle of federalism by allowing the federal government to wield power over Texas by placing requirements on how federal funds are spent which gives Texas less control and flexibility over its programs. It is vital for Texas to consider the implications of accepting federal funds to expand or create programs. Oftentimes rejecting federal funds as an enticement to create new programs would slow the growth of our State budget. The rejection of the Unemployment Insurance stimulus in 2009 is a positive example of this approach.
Limited government is a pillar of fiscal strength and economic prosperity. We have a tremendous opportunity to reduce the size of our state government and our dependency on the federal government and I will focus my efforts next session to accomplish the aforementioned goals.
