Texas politicians had a choice to make this spring. With a record $80 billion of new revenue available, they could either spend the money or give it back to Texas taxpayers in the form of property tax relief. Unfortunately for Texans, for the most part, they chose to spend the money.
The spending decision was not the only choice members and legislative leaders had to make during their regular session. They were constitutionally constrained by spending all the money by something known as the Tax Spending Limit (TSL) in the Texas Constitution, which limits spending growth of “state tax revenues not dedicated by this constitution” to no more than the growth of the state economy.
Constitutional Amendments on the November 7 Ballot
| Proposition | Topic | 2024-25 Cost | Future Costs | Notes |
|---|---|---|---|---|
| 2 | Property Tax breaks for childcare facilities | ? | ? | Only for subsidized, low-income facilities |
| 5 | Creates the Texas University Fund | $208 million | $120 million annually | Funding for “emerging” research universities |
| 6 | Creates the Texas Water Fund | $1 billion | N/A | Increases government control over water |
| 7 | Creates the Texas Energy Fund | $5 billion | N/A | Subsidies for natural gas electricity generators |
| 8 | Creates the Texas Broadband Fund | $1.5 billion | N/A | Subsidies for rural telephone companies |
| 9 | Teacher Retirement | $5 billion | N/A | Increases payments to retired teachers |
| 10 | Property Tax breaks for medical products | $43 million | $50 million annually | Subsidies for medical product manufacturers |
| 14 | Creates the Centennial Parks Fund | $1 billion | N/A | Funds the purchase of more state parks |
| Total | $13.8 billion |
The limits of the TSL can be exceeded if “approved by a record vote of a majority of the members of each house.” But this meant Texas politicians would be faced with another constraint; angry Texas voters who might object to their increasing spending by $56.5 billion while only putting $12.7 billion into property tax relief.
However, this dilemma did not baffle Texas politicians for long. They came up with some “creative ways” to “bust the spending cap” imposed on them by the TSL. First, they spent money “backward” into the current fiscal year to increase the base from which the TSL is measured. This allowed them to spend an additional $22.5 billion. Second, they decided to make voters bust the spending cap through eight propositions on the November ballot to amend the Texas Constitution. This allowed the Legislature to potentially spend another $13.8 billion that otherwise would have been constrained by the TSL.
This also gives Texans an unprecedented opportunity in November. Never in Texas history has the Texas Legislature given us the power of the purse at such a level. Because Texas politicians wanted to avoid the constitutional constraints and angry voters, Texans now have the choice to either support or roll back the Legislature’s plan to spend the $13.8 billion. A Yes vote will further increase what already is the largest spending increase in Texas history. A No vote will roll back Texas government spending by $13.8 billion, make that money available for future property tax relief, and tell Texas politicians that voters are tired of runaway spending and crony capitalism. It is up to Texas voters to choose which direction Texas will take.
Texans for Fiscal Responsibility relies on the support of private donors across the Lone Star State in order to promote fiscal responsibility and pro-taxpayer government in Texas. Please consider supporting our efforts! Thank you!
Get The Fiscal Note, our free weekly roll-up on all the current events that could impact your wallet. Subscribe today!
