Ahead of the 2023 legislative session, Texas Comptroller Glenn Hegar announced that in addition to the $250 billion biennial budget, the state expects to collect $26.9 billion in surplus funds.

This surplus was partially created by a 2021 bill that capped the growth of state spending to a rate that is in proportion to Texas’ expected population growth and future inflation rates. Hegar also cited record collection from multiple tax revenue categories.

In light of this massive cash influx, some Texans are calling on lawmakers to dedicate all of the funds to eliminating property taxes. Texans for Fiscal Responsibility (TFR) recently released a three-step plan detailing how legislators could achieve this goal. However, in an analysis covering the extra $27 billion, TFR expressed doubts that lawmakers would elect to give the surplus back to Texans.

“Lawmakers simply keep with the status quo and use surplus dollars as a slush fund to fund wasteful programs that continue to steal money from taxpayers and instead give it to things like corporate welfare programs, like the Texas Enterprise Fund, or throw it in the Economic Stabilization Fund (an emergency fund that is simply used as a piggy bank for ongoing expenses like public education funding),” said the group in their analysis.

In previous legislative sessions with extra funds, lawmakers have only returned a portion of the surplus to taxpayers.

The 86th Legislative Session, which ran from January to May 2019, had a surplus of close to $10 billion. At the time, Hegar warned lawmakers to monitor their spending due to the potential effects of decreased oil prices. Although lawmakers used the surplus to pass legislation lowering the school property tax burden, they also tripled public education spending and raised the state’s budget.

Similarly, with little time left in the 87th Legislature’s third special session, lawmakers passed a bill using some of the state’s $7.8 billion surplus to “buy down” school maintenance and operations taxes for households valued at around $300,000. Although lawmakers lowered the state’s budget overall, Texans only saw a tax decrease of around $200.

In comparison, the upcoming 88th Legislature faces a surplus of almost $27 billion, triple the amount of last session’s extra funds. TFR President Tim Hardin expressed his belief that the Legislature should return the surplus to taxpayers and implored conservative lawmakers to avoid enlarging the government.

“We must remember that the government is not “for profit” and should not be plundering the money of taxpayers because they overshot projections,” said Hardin. “That surplus is in every sense OUR money, and the government has no right to keep it, especially if the dominant party in Texas claims to be ‘fiscally conservative’ and advocates for small government.”

Although Lt. Gov. Dan Patrick issued a statement calling on lawmakers to dedicate the extra funds to property tax relief, his plan only included $4 billion of the nearly $27 billion surplus, which would leave $23 billion at lawmakers’ discretion.

With the start of the legislative session less than six months away, lawmakers will have to decide if they will return the massive surplus to taxpayers or use the funds to expand state government.

Katy Drollinger

Katy is eager to use her skills in writing and research to accurately report on issues for Texas Scorecard. She graduated from Tarleton State University in 2021 after majoring in history and minoring in political science.

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