At the end of the school year, Texas children know two things: First, summer has arrived, and with it all the joy that two months of liberty can afford. Second, report cards will be sent home. For some young people, this latter event has great bearing on the quality of the former. Bad grades usually mean less fun.
But another group of children are also getting evaluated by parents across the state: the Texas Legislature. And in one subject—the budget—their marks were very bad.
The Texas Legislature came into their school year with a record $32 billion surplus in 2023. That’s nice, strong footing, and we had every expectation they would do great things. Moreover, the Texas Comptroller projected close to an additional $40 billion in new revenue available to be spent over the next two years.
So, what did Austin do with this amazing war chest? Did they follow the dictates of sober prudence? No: like so many children before an ice cream truck, they spent and spent and spent. In fact, they blew through all of our money. Excess money should have been returned to the taxpayers. The specifics here are worth recounting.
There were two primary appropriations bills this session, SB 30 and HB 1. The former was the “supplemental” appropriations bill that spent money in the current year, 2023. HB 1 appropriated money that will be spent over the next two years, 2024 and 2025. When we add the spending together, total new spending this session came to $233 billion, a $69 billion or 42% increase over spending authorized by the Legislature in 2021.
Dollarwise, this is by far the largest spending increase in Texas history. And it is likely also the largest in terms of percentage growth of spending. Like parents of a struggling student who plays instead of studies, another bad year should come to no surprise. State spending, after all, is up $101 billion over the last decade. That is a 76.5% increase during a period when inflation increased by only 29.9%.
If, however, this spending was done in a way that money was returned to the Texas taxpayer (versus how much was dedicated to increasing Texas government spending), we might praise the men and women of the 88th Legislature. But in crucial areas like property tax relief, it just did not occur. The current budget has set aside $12.3 billion for this crucial assistance. But this only translates into $6.2 billion of relief this year out of a property tax levy that totaled $82 billion in 2022.
At this point, we must ask three things: How is this just, how is it prudent, and what can be done so it’s not repeated.
We must set aside answering the first two questions. Justice and prudence, those twin virtues that keep any state strong, have not had a comfortable home in Austin for some time. At some point, one really must wonder if our representatives all failed Economics 101 or if something else going on.
As for what can be done, the Huffines Liberty Foundation’s plan for eliminating school property taxes shows that this could be accomplished in eight years or less through five simple steps. Most important of these is for the Texas Legislature to exercise fiscal discipline that would limit state and local spending growth. This would create future budget surpluses which could be used to buy down the school property tax to zero. You can read about the specifics here.
Unfortunately, this session the Texas Legislature took us in the opposite direction. Like the parents of a struggling or disobedient child, we simply cannot wish that our government will tighten the fiscal belt in 2025. We need to begin pressuring them now. The Texas voters are in charge and should not forget this. At the moment we have 181 latch-key kids with no parental oversight. This does not bode well for the future.
