84(R) - 2015
Vote Yes; Amend
Proposing a constitutional amendment concerning the limitation on the rate of growth in appropriations.
A fiscal note dated April 2, 2015 anticipates no fiscal implication to the State, other than the cost of publication, in the upcoming biennium or to units of local government.
The cost to the state for publication of the resolution is $118,681.
The fiscal note adds that future fiscal implications would depend on the composition of state revenue in the future, as well as appropriation decisions by the Legislature.
Senate Joint Resolution 2 proposes an amendment to the Texas Constitution to change the way the constitutional limit on the rate of growth of certain appropriations in a state fiscal biennium is calculated and to which appropriations it applies.
The constitutional limit would apply to consolidated general revenue appropriations, that is appropriations from the general revenue fund and dedicated accounts in the general revenue fund.
The maximum rate of growth would become the product of the average biennial rate of growth of the state’s population during the state fiscal biennium preceding the biennium for which appropriations are made and during the state fiscal biennium for which appropriations are made, and the average biennial rate of monetary inflation in the state during the same periods.
If the rate is negative, consolidated general revenue appropriations for the following state fiscal biennium would have to not exceed those of the previous state fiscal biennium.
Appropriations to pay for a rebate of state taxes would be excluded from computations to determine whether appropriations exceed the maximum amount authorized.
Senate Joint Resolution 2 would also change the number of votes needed for the Legislature to spend in excess of the limit in appropriations growth from a majority to three-fifths of the members of each house.
Senate Bill 9 is the enabling legislation for Senate Joint Resolution 2.
Vote Recommendation Notes
Senate Joint Resolution 2 is a step in the right direction: using population growth and inflation to determine the maximum rate of growth would be more representative of the possible needs for growth in appropriations than the growth in personal income currently used to determine the spending limit. It would result in a more conservative budget by limiting spending further.
Increasing the number of votes needed to spend in excess of the limit would also reduce the risk that a Legislature be tempted to overspend, especially in times of budget surplus.
Nevertheless, Senate Joint Resolution 2 could go even further in order to more accurately reflect the maximum rate of growth of appropriations needed in each state fiscal biennium:
- Using population growth plus inflation as the basis to determine a limit in appropriations has proven to efficiently reduce the growth of government. Adding the rate of population growth to the rate of inflation, instead of multiplying both rates, would better limit state spending,
- Instead of calculating the average rates of population growth and inflation based on the current fiscal biennium and the one for which the appropriations limit is calculated, resulting in using figures that are forecasts, using figures from the two fiscal years immediately preceding the regular legislative session would give a more accurate base for the calculation of the spending limit,
- The spending limit in Senate Joint Resolution 2 would only apply to part of appropriations made in a fiscal biennium. The spending limit would be more conservative if it applied at least to all state funds.
Senate Joint Resolution 2 is going in the right direction by making an effort to limit the growth of state government. As a consequence, we support it. But we think the recommendations above should be taken into consideration to improve this constitutional amendment.