Fiscally Conservative Budgets

78^th Legislature: 2003

House Bill 1 by Heflin

Sponsor - Bivins

• Faced with a $7.4 billion budget deficit, the 78^th Legislature balanced the budget without passing new taxes or increasing existing taxes; budget growth was successfully limited to 1.4 percent.
• House Bill 1 totalled $117.4 billion (including federal funds) for the 2004-05 biennium, just 1.4 percent more than the 2002-03 budget. Significantly, within this all funds total, appropriations from General Revenue decreased by $2.2 billion (3.4 percent) compared to the 2002-03 level.

80^th Legislature: 2007

House Bill 1 by Chisum

Sponsor - Ogden

• For the first time, the General Appropriations Act did not spend surplus revenue on new programs. Instead, Legislators returned surplus revenues to taxpayers by making deposits to the property tax relief fund and the economic stabilization fund. In an unprecedented conservative victory, legislators limited the growth of the budget to less than the growth of population and inflation.
• The Legislative Budget Board's analysis of House Bill 1 notes that Conference Committee's recommendations will result in total state spending (All Funds) in the 2008-09 biennium of $152.5 billion; this excludes $14.2 billion appropriated to fund property tax relief. The LBB analysis notes that "the recommendations provide for a $10.0 billion, or 7.0 percent increase from the 2006-07 biennial level."

Divestment of Funds in Sudan:

Senate Bill 247 (80R) by Ellis

Sponsor - Van Arsdale

• Senate Bill 247 requires certain agencies of the state that invest public money, such as public retirement systems, the Teacher Retirement System, and the Employee Retirement System, to divest their monies in companies that engage in business operations in Sudan.

Cutting Taxes

Municipal Sales Tax Rates

House Bill 164 (78R) by Truitt

Sponsor - Nelson

• House Bill 164 allowed municipal sales and use taxes for street maintenance to be levied at lower rates and established that rate changes must be approved by voters.

 

 

• Prior to enactment of House Bill 164, municipalities were permitted to adopt a sales and use tax of one fourth of one percent for street maintenance purposes. The bill reformed this provision to allow municipalities to adopt a lower sales and use tax rate of one eighth of one percent.

 

 

• The bill allowed municipalities to reduce the one fourth of one percent tax rate to one eighth of one percent by ordinance, as well as increase the rate of tax from one eighth of one percent to one fourth of one percent, if authorized in an election held by the municipality.

Elimination of the Telecommunications Infrastructure
Fund (TIF):

House Bill 735 (80R) by Straus

Sponsor - Williams

• House Bill 735 repeals the Telecommunications Infrastructure Fund (TIF)fee.

 

 

• The TIF fee is a 1.25 percent assessment imposed on firms that sell telecommunications services to an end user. TIF was introduced in 1995 to provide technology grants to public schools, hospitals, and libraries in rural areas. That job had been accomplished, so the Legislature repealed the tax.

Franchise Tax Exemption:

House Bill 3928 (80R) by Keffer

Sponsor - Ogden

• House Bill 3928 increases the small business revenue exemption from the revised Franchise Tax.

 

 

• Small businesses comprise more than 98 percent of all businesses in Texas. Most of these have annual revenues below $500,000. Small businesses also typically have low profit margins.
  Raising the exemption will ensure that these small businesses are not
  penalized by the Revised Franchise Tax to help keep Texas' business climate vibrant.

Spending: Responsibility and Transparency

Savings Incentive Program for State Agencies:

House Bill 651 (78R) by Pitts | Campbell | Branch | Riddle

Sponsor - Williams

• House Bill 651 established an incentive for state agencies to realize savings by allowing an agency to retain a portion of any savings made.

 

 

• House Bill 651 allowed agencies that spend less than the amount appropriated to them from non-federal sources to retain half of the amount of savings, not to exceed two percent of the undedicated general revenue from non-federal sources appropriated to the agency.

 

 

• HB 651 permitted the agency to spend the savings on anything that does not create or expand services or require continued funding.

 

 

• HB 651 provides a greater incentive to for agencies to prudently manage their biennial appropriation, and discourages unnecessary and wasteful spending at the end of the fiscal year.

Searchable State Spending Database:

House Bill 3430 (80R) by Strama | Hughes | Van Arsdale | Paxton

Sponsor - Shapleigh

• House Bill 3430 establishes an online state contract and spending database that will increase the transparency and accountability of state government.

 

 

• The database must include all state contracts exceeding $50,000, and must allow users to search funding by any element of the information (payor, payee, or state agency).

 

 

• The database must allow a user to determine the total amount of state funding awarded to any one person or organization by a state agency in a downloadable format.