Has Texas been spending lots more money?

There has been a debate over how much spending in Texas has increased. It’s an important debate and like more important policy questions the answer can be complicated.

The debate got louder when the Wall Street Journal (WSJ) published an editorial (“Texas Goes Sacramento: Republicans spend their energy gusher, and then some“) that attacked Perry for supporting spending in a fashion they compared to liberal icons former House Speaker Nancy Pelosi and current California Governor Jerry Brown (Both the Wall Street Journal and Perry love playing off the rivalry between Texas and California):

This is the kind of stunt one would expect from Nancy Pelosi. The budget contains a roughly $1 billion tax cut, but for every $1 of tax relief, $19 in new revenue will be spent…

Mr. Perry traveled on a business recruiting mission to California in February and poked fun at the tax-spend-and-borrow cycle in Sacramento. He can fix the reckless Texas budget by vetoing all or most of it and insisting on deeper business tax cuts. He should not want people to start comparing him unfavorably to Jerry Brown.

The first question is whether or not the WSJ attack on Perry is wrong.

First, consider the Legislature (who passed the budget that the WSJ considered too big). The House and the Senate both had very large Republican majorities. Further, many of those Republicans were of the “tea party” variety. It seems unlikely that such a majority can be credibly called  big spenders. It strains credibility to call Perry a California liberal for signing a budget passed by a conservative Texas Legislature.

Second, the WSJ uses the previous budget as their baseline for judging the new budget. We need to remember that the state faced a huge budget shortfall. The legislature had to make huge cuts while agencies and universities actually had to give back money that had been appropriated in the previous budget. Those cuts were the product of tough economic times and the Legislature made some politically difficult decisions. Making that budget the baseline is highly questionable. Finally, the Legislature cut down on budget gimmicks that it had used to make the last round of budget cuts easier. This budget did less of that and the Legislature should be given some credit for more fully confronting budget issues.

Third, there’s plenty of evidence that spending in Texas is growing at roughly the rate of population growth plus inflation. There are more Texans using more stuff provided by government. PolitiFact Texas sided with Rick Perry’s claim that state spending was growing in line with population and inflation and concluded:

Perry said the 2014-15 Texas budget that legislators approved would keep spending increases below combined changes in population and inflation.

Setting aside the [Texas Public Policy] foundation’s analysis, which split expenditures by when they were authorized and not which budget they belonged to, we found that state spending rose no more than 8.7 percent from 2012-13 to 2014-15.

That falls below the 9.85 percent population/inflation rate embraced by legislators last fall, which is also in line with recent biennial average increases of 9 percent. Then again, the spending could exceed other predictions for that rate.

On balance, we rate Perry’s statement as Mostly True.

The Legislative Budget Board’s analysis takes a longer view and looks at growth going back a full decade and looks at the impact of property tax relief. Their figures include spending on  water and transportation projects that could be rejected by voters in constitutional amendments. The analysis there indicates that general revenue spending has grown more slowly that inflation/population. (The Houston Chronicle has suggested that the WSJ relied on Texas Public Policy Foundation.)

The Wall Street Journal piece is remarkable in a number of ways. First, it was unusual for a national publication to engage in the debate over a state budget at is approached a governor’s desk. Clearly, this was an attempt to leverage Perry’s presidential ambitions against him. We have all come to expect partisanship and bias coming out of the opinion pages of national media. However, the WSJ’s desire to inject itself in an intra-party battle before candidates have even declared is interesting. Perry certainly deserves scrutiny as he positions for a possible run for the presidency. And, conservatives  found plenty to criticize during his 2012 bid for the nomination.

The WSJ does correctly noted that the Legislature did fund the Emerging Enterprise Fund and other slush funds run out of the governor’s office. That may be a fair criticism. However, those funds account for only the tiniest bit of the Texas budget.

The WSJ article provides a good excuse to look at budgeting issues and consider what kind of standard should be applied to spending.


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