Texas Constitution requires lawmakers to stay under the spending limit

A panel of Texas lawmakers soon will meet behind closed doors to iron out the state budget for the next two years, now that the $248 billion proposal has been amended by lawmakers in the House and Senate.

Lt. Gov. Dan Patrick, a Republican, celebrated the Senate approving the latest version of the proposal in a news release on April 9.

"Like every budget passed by the Senate since I have been lieutenant governor, Senate Bill 1 is within the spending limit set by the Texas Constitution," Patrick said.

Patrick’s claim is accurate, but it doesn’t reveal much. Given that the spending limit is a constitutional requirement, lawmakers have only ever voted to exceed it once, to secure additional funds for public schools.

Texas Constitution has four spending caps

The Texas Constitution has four limitations on state spending, according to the Legislative Budget Board. In simplified terms, they are:

• 1. Pay-as-You-Go limit: Lawmakers can’t budget for more money than the state is estimated to have in revenue in the upcoming two years.
• 2. Spending limit: The rate of growth of spending on items in the budget that aren’t required by law can’t exceed the rate of growth of the state’s economy.
• 3. Debt limit: Lawmakers can only authorize so much debt supported by the state’s bank account, a limit based on existing debt service and the size of the account over the three previous years.
• 4. Welfare limit: Budget writers can’t spend more than 1% of the budget on assistance grants for needy children.

Alejandro Garcia, a spokesman for Patrick, said the budget proposal approved by the Senate this month is "significantly below both" the pay-as-you-go limit and the spending limit.

A summary of the appropriations bill from the Legislative Budget Board shows that the bill is $1.3 billion short of reaching the more than $119 billion pay-as-you-go limit for general revenue spending and is $7.9 billion short of the $100 billion spending limit. It is also within the debt and welfare limits.

Budget experts said Patrick seemed to be emphasizing the spending limit outlined above, the only one of the above caps that lawmakers have exceeded in the past.

This limit prevents lawmakers from allocating funding in certain categories at a higher rate than the anticipated growth rate of the state’s economy, a calculation determined by lawmakers who serve on the Legislative Budget Board before each session.

The limit only applies to nondedicated revenue: state sales tax revenue that is not constitutionally required to go towards specific programs.

Lawmakers are allowed to exceed the limit if they meet three requirements: if they find "that an emergency exists," if both chambers approve the expense with a majority vote and if the proposed allocation does not cause the total budget to exceed the pay-as-you-go limit outlined above.

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Exceeding the spending limit is seen as politically risky and is incredibly rare. Lawmakers have only voted once to exceed the limit since this provision was added to the state Constitution in 1978.

It happened in 2007, as lawmakers looked to pay for tax cuts they had promised a year earlier. In order to reduce local school property taxes, the state had to give more money to schools to cover the loss in tax revenue.

Patrick’s claim is accurate, doesn’t say much

This means Patrick’s claim is accurate.

He took office as lieutenant governor in 2015 and, in the three sessions since then, the Senate has not approved legislation allowing the state to exceed the spending limit.

But it’s also accurate to say that every budget passed by both the Senate and the House since 1978, when this limit was added to the Constitution, was under the spending limit, except for in 2007 when lawmakers voted to exceed the limit to fund public schools.

Patrick, who was serving as a senator in 2007, voted against the resolution to exceed the spending limit.

Eva DeLuna Castro, a budget analyst at the Center for Public Policy Priorities, said given that the limit is constitutionally mandated and lawmakers have only voted to exceed it once, Patrick’s claim doesn’t reveal much about his victories as a budget-writer.

"It's like me saying I woke up this morning and took a shower and came to work," she said. "That's what I do every day."

Our rating

Patrick said, "Like every budget passed by the Senate since I have been lieutenant governor, Senate Bill 1 is within the spending limit set by the Texas Constitution."

He’s right. It’s also true that lawmakers have only ever opted to exceed this limit once since it was added to the Constitution.

We rate this claim True.

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2019-04-16 21:22:50 UTC

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"Like every budget passed by the Senate since I have been lieutenant governor, Senate Bill 1 is within the spending limit set by the Texas Constitution."

Dan Patrick

Texas Lieutenant Governor

a press release

Tuesday, April 9, 2019

2019-04-09

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