Capitol Update: Keep Government Spending in Check!

January 13, 2017

Dear Friends,

In Texas, fiscal responsibility isn’t just a catch phrase, it’s a mandate from “we, the people.” With that in mind, our office has filed Senate Bill 9 to tighten the state spending cap formula, keeping future budgets in check.

What is the state spending cap?

This limit was originally adopted into the Texas Constitution in 1978. It says that certain types of state spending cannot exceed the rate of growth of the overall economy.

How is it calculated?

The Legislative Budget Board (LBB) has the task of recommending legislative appropriations for all state government agencies based on projected economic growth. I was honored to be named to this board a few months ago. Under current law, the LBB calculates Texas’ economic growth rate based on personal income growth statistics. That poses a problem because personal income tends to grow faster than the overall economy. This means the spending limit as it currently stands is essentially a false boundary. It sounds good, but doesn’t do much to curb spending.

How does Senate Bill 9 fix the problem?

SB 9 directs the LBB to use a population times inflation formula when calculating the spending limit, rather than personal income. It also expands the base of funds, or types of spending, that must be included when calculating the limit.

The state budget process can be complicated, but the bottom line is this:

While I sincerely hope and pray the Texas Legislature will always be fiscally conservative, it’s time to put some permanent protections in place so the next generation of Texans doesn’t run the risk of seeing government spending skyrocket.

Sincerely,

Kelly Hancock
State Senator, District 9


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