Statement on the 2010-11 state budget growth limit

“Next year, the Texas Legislature will reveal whether it has learned the lessons of 2001 or whether it will spend us into another budget crisis. By choosing one of the more conservative options on the 2010-11 spending limit, today’s Legislative Budget Board decision is a positive sign.

“In 2001, the legislature convened with a $6 billion surplus and the knowledge that the state’s economy was slowing. Instead of showing fiscal restraint, the legislature increased the state’s budget by 16 percent – an increase that absorbed the entire surplus. Even worse, much of the new spending went toward new programs that would become even more costly in the next budget cycle.

“Two years later, the legislature returned to a $10 billion budget deficit. A more responsible budget in 2001 would have started us off with both a smaller budget hole and some cash reserves to help cover it.

“Clearly, the national economy is far worse today than it was in 2001, and while Texas has positioned itself better than just about any other state, we will not be immune to the effects from a national recession. While we cannot know what the future holds, it is unlikely that Texans will see double-digit increases in their personal incomes over the next two years, as assumed in some of the other proposals given to the board today.

“It is imperative that Texas continue to budget carefully, with an emphasis on providing essential services to its citizens with the smallest possible bite out of their wallets. Restraining our spending now will give us more options in the event that this national recession is prolonged.”

The Honorable Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. Heflin served 11 terms in the Texas House of Representatives and chaired the House Appropriations Committee in 2003, leading the Texas Legislature’s successful efforts to close a $10 billion budget deficit without a tax increase.

The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin. More information can be found on the Foundation’s website, www.TexasPolicy.com.

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