Straus: The Texas House Puts a New Limit on Budget Growth

The following article was authored by Texas Speaker of the House Joe Straus.

The Texas House has just approved what I believe is this session’s most meaningful and lasting effort to control government spending.

The House gave unanimous passage on Monday to Representative Drew Darby’s House Joint Resolution 111. This proposal would not only help keep spending in check, but it would bring needed transparency to the budget process. And it would do so by enshrining a fairly simple concept in our state Constitution: Legislators shouldn’t spend money that they don’t really have.

Our state budget is full of hundreds of special accounts funded by charges that Texans pay throughout the course of their daily lives. There is the fee tacked onto vehicle emissions tests in order to help reduce air pollution. And the extra amount you pay to get a copy of your birth certificate in order to help the state manage such records. And the fee on renewing a motorcycle license, which is supposed to help pay for safety programs.

But in the early 1990s, legislators decided they could start using that money for something else. Specifically, they found that if they didn’t spend all of those fees on their stated purpose, the money would pile up and they could instead count it to justify spending on other programs. It’s not that the money actually gets spent, but it is counted as General Revenue when the Comptroller certifies the budget. And if the money is counted to, say, justify spending on Medicaid, it can’t actually pay for its original purpose.

Over the next two decades, the problem got much worse. State leaders, who were eager to say on the campaign trail that they had balanced the budget and addressed key priorities without raising taxes, relied on these fees more and more, especially in tough economic times. In the 2011 session, we balanced the budget in part by using nearly $5 billion in dedicated fees for certification. And yes, I say “we” because I was Speaker at the time, and the House, Senate and Governor all agreed on this approach.

But life offers redemption, even for legislators.

In the summer of 2012, I encouraged the House Appropriations Committee to begin reducing the amount of money in General Revenue-Dedicated accounts used for budget certification, and my House colleagues got right to work on the issue. We knew that we wouldn’t instantly solve a problem that had built for more than 20 years, but we also knew we had to start trying.

The House took the lead in reducing this longtime trend in the 2013 session when we reduced the amount of dedicated funds used for certification by nearly $1 billion. We did so by eliminating some fees and using more of those dedicated dollars for their intended purpose, such as a discount on electricity for low-income Texans.

This session, our progress has only accelerated. The budget that the House approved earlier this month reduces the practice further. For example, it provides hospitals with significant resources from a fee on drunk drivers – a fee that was supposed to be paying for trauma care for many years, but hasn’t been. House Bill 7, which the House approved this week, cuts about $400 million in taxes and fees. In fact, the House is working to reduce the amount of money sitting in GR-Dedicated accounts to $2.9 billion, which is significantly less than the $4.5 billion that would be sitting there if we did nothing.

But perhaps the most important and lasting reforms exist within HJR 111. This proposed amendment to the Texas Constitution says that money sitting in GR-Dedicated accounts cannot be counted as available revenue when the Comptroller issues the Biennial Revenue Estimate. Without those accounts in the equation, we would be having an entirely different conversation – a more honest conversation – about how much money is available to spend on programs, on tax cuts and on everything else we’re talking about doing. Suddenly, the Legislature will have less to work with. And the Legislature will certainly have less to work with starting in 2021. That’s when HJR 111 would bar the state from using GR-Dedicated balances for budget certification at all. That number that we’re working to get down to $2.9 billion would become zero.

Other proposals have been floated this session to tinker with the spending limit in the Texas Constitution. But none of those ideas have received the two-thirds vote needed to change the Constitution. Plus, HJR 111 is the only approach that ends the budgeting practices that so many of us love to criticize. In HJR 111, the House has approved a solution that reinforces fiscal discipline and lets Texans know their money will be used as promised.


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