Texas hasn’t kept spending as tightly controlled as some lawmakers would have taxpayers believe. A new study shows that total state spending has risen nearly 12 percent faster than would be necessary to keep pace with the growth of population and inflation. Unless the Legislature passes commonsense budgeting reforms, the state’s spending problems will only get worse.
According to Texas Public Policy Foundation, the state’s current budget would spend approximately $22.1 billion less if lawmakers had kept spending at or below the level of population and inflation over the previous decade. Taxpayers will only end up paying more if those same lawmakers maintain the status quo.
The Legislature has taken a small step forward in developing a more solid fiscal foundation, but much more work is needed. The state’s current 2016-2017 budget increases total spending by only 4.3%, below the estimated 6.5% rate of growth in population and inflation from the previous cycle. However, state spending (from non-federal funds) increased by 7.1%. General Revenue spending, the bucket of funds the Legislature has the most control over, increased a whopping 11.6% from the previous budget.
In other words, the more discretion legislators have over expenditures, the more likely they are to overspend.
Why, even in deep-red Texas, is there such a propensity for budget-writers to overspend?
Notwithstanding a larger problem of legislators being more loyal to the grow-government lobby class than their own constituents, the problem starts with the budgeting process.
Currently, appropriators use a technique known as “baseline” budgeting to draft their initial proposal. Legislators look to spending in previous cycles to determine how much more they plan to spend moving forward. Inherently it is a flawed process that assumes all past spending was necessary or prudent.
Instead, legislators should use “zero-based” budgeting. As the name implies, legislators start each agency budget at “zero” and require department heads to justify each expenditure. Through the process, their budget is based on what is needed, rather than what is expected. Though more intense, zero-based budgeting is an effective tool to reduce waste and inefficiencies throughout state government.
Additionally, reforms are needed in the way spending is displayed within the state budget in order to increase transparency for taxpayers. The Legislature currently uses a “strategy-based” budget-writing technique. Rather than list specific line-items of spending for each agency, budget-writers simply list what “strategies” or goals they want that particular agency or department to spend the allotted cash on.
Taxpayers are left guessing as to how exactly those agencies use their funds to accomplish that “strategy” or goal.
If legislators were interested in being more transparent with taxpayers, they would instead use a “program-based” budgeting system, where taxpayers would see specific line-items for each program that is authorized and funded.
Not only would taxpayers be more empowered to hold legislators accountable for wasteful spending, it would allow the governor greater opportunity to veto specific expenditures, rather than risk vetoing spending for an entire agency.
These simple commonsense reforms will go a long way to reining-in over-spending in state government, but don’t be fooled into thinking these reforms alone will keep state spending in check.
That will only come from a fully informed and engaged electorate.