Analysis: Fear of Spending Even Extends to Tax Cuts

State Sen. Jane Nelson, R-Flower Mound, and Lt. Gov. Dan Patrick at a budget press conference on Jan. 27, 2015.
State Sen. Jane Nelson, R-Flower Mound, and Lt. Gov. Dan Patrick at a budget press conference on Jan. 27, 2015.

Some politicians think it’s easier to change the state constitution than to take a tough vote on the budget.

They might even be correct.

The constitution limits how fast the state budget can grow; voters put that in there in 1978. It doesn’t limit everything. The cap applies to spending of state tax revenue, which exempts funds from the federal government, various state fees, dedicated taxes like the one on motor fuels, investment income and the lottery.

Even with those holes, the cap restrains the Legislature in times of abundance — now, for instance. But money has a way of burning a hole in your pocket, and lawmakers are itchy to spend some of it on things like debt reduction, underfunded state pensions, property and business tax cuts, roads and buildings.

Lots of things would be possible right now without that spending cap in place; this year, it leaves as much as $6 billion in the state treasury that is out of budget writers’ reach. That has lawmakers dreaming of how to get around the cap, and there are ways to do that.

 

The first one is simple: Vote to spend more. If a majority of senators and representatives agree, they can spend more than the cap allows. This requires some intestinal fortitude from legislators, especially in primaries where voters will want to know how the state budget ballooned so quickly. Price-sensitive voters won’t like the answer unless they can be convinced that the extra money was well-spent.

A second, proposed Wednesday by Lt. Gov. Dan Patrick and Sens. Jane Nelson, Juan “Chuy” Hinojosa and Kevin Eltife, is complicated. They want to change the constitution to exempt spending on tax cuts and debt payments from the calculation of a spending cap. They would be able to take care of other items on their wish lists and keep spending past the cap on taxes and debt. Voters would have to approve, and it would take approval from two-thirds of the House and two-thirds of the Senate to get the measure to voters.

That’s more complicated, but it fits the recent pattern established by the state’s officeholders. They are scared to death of voters — so much so that they rely on a “Mother, may I?” approach to tough votes.

For two Novembers in a row, the state of Texas has gone to voters asking for more money, first for water and more recently for transportation.

Those didn’t involve taxes — lawmakers are allergic to that. But they were nervous about spending money, even on popular things — water projects during a drought and highway money for the state’s perpetual traffic jam — and asked voters for permission instead of just writing the checks themselves.

The state had the money it needed, sitting in the so-called Rainy Day Fund, but lawmakers didn’t want to just write a check themselves, for fear they would be labeled spendthrifts in the next round of primary elections.

The Senate leadership seems fine with that. Selling it to the House leadership won’t be easy.

“Every session, there seems to be something that needs to be solved, and legislators find it pretty difficult to say ‘We’re going to spend money on something,’” House Speaker Joe Straus said last month in an interview with the Texas Politics Project. “So what we’ve done, and settled on, is this approach that I’ve called the California style of governing: ‘Let’s send it to the voters and have them tell us to spend money on something.’

“I think it’s time to get back to a more meat-and-potatoes appropriations approach,” Straus said. “If transportation needs more money spent on it, the appropriators ought to put it in the budget and the legislators ought to vote to do it.”

On Wednesday, he told reporters he gave the Senate idea a chilly reception, saying lawmakers shouldn’t try to make it easier to skirt limits on spending growth.

“For 36 years our state spending cap has helped enforce fiscal discipline, and we should be very cautious about any attempt to weaken it,” Straus said.

Lawmakers could just suck it up and vote to break the cap. But that would be hard for some of them to explain when they stand for re-election a year from now. They’d rather ask mom for permission.

 

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