A Strong and Responsible Fiscal Plan for Texas

By State Representatives Wayne Christian, Linda Harper-Brown, Ken Paxton, Leo Berman, Brandon Creighton, Dan Flynn, Bryan Hughes, Phil King, Jodie Laubenberg, Geanie Morrison, Tan Parker, and Larry Taylor.

While President Obama has made it clear that he rests his hopes for economic recovery on government spending, we categorically reject the false and misleading idea that government spending will lead us to prosperity.  It never has and never will.

The federal government has already spent over $700 billion on economic stimulus in the Emergency Economic Stabilization Act of 2008; the agreed upon version of the American Recovery and Reinvestment Act of 2009 is nearly $790 billion.  This unprecedented expansion of federal spending and national debt will serve to vastly grow government, and could result in inflation or tax increases in the years to come.  

Unfortunately, leadership in Washington D.C. continues to set a bad example while many states follow in their footsteps, including a near-bankrupt California.  The total number of states reporting budget deficits for 2009 is forty-three.   Texas is one of seven states to enter 2009 with a sound fiscal outlook.  Fiscal responsibility has served our state well.  We must remember, however, that actions taken this legislative session could drag down the state financially.

The 81st Texas Legislature has an opportunity to draw a starkly different, more responsible path than the one chose by Washington D.C.  The best economic policy is to limit taxes and spending, which is the central principle underlying our five urgent fiscal action items for the state budget this year.

First, we will work to reduce General Revenue and General-Revenue dedicated spending by 2.5 percent in the 2010/2011 budget, as recommended by the Lieutenant Governor and the Speaker of the House.  We are committed to working with leadership to help find ways to reduce spending in non-essential programs and to look for additional savings throughout the appropriations process.  

Second, it is imperative that we maintain a Rainy Day Fund balance of at least five percent of the state funds spent in our next budget.  While budget surpluses are more common than deficits for our state, our last deficit in 2003 totaled $10 billion dollars.  Because it is impossible to know what revenue will be available in the future, the Rainy Day Fund must be left with a significant balance to guard against future shortfalls that may result from the national economic crisis.  

Furthermore, we can ensure that the state maintains a favorable bond rating by maintaining a sizeable balance in the Rainy Day Fund.  The spending and taxation policies of California should serve as a stark lesson.  Because of senseless spending, California's bond rating is the worst of any state, according to Standard & Poor's.   

Third, we must limit the scope of emergency appropriations to one-time, disaster-related needs and non-recurring expenses that are truly emergencies.  Texas is a leader in its rapid and adept responses to natural disasters such as hurricanes, and we must remain strong in our ability to swiftly recover.  We also have legitimate, one-time needs that relate to the contraband found in Texas prisons, and the abuse and neglect perpetrated at State Schools.

Fourth, to the greatest extent possible, we must limit the use of federal stimulus funds to one-time expenditures, or expenditures with an end-date that matches the end-date of the stimulus money.  Federal stimulus funds must not be used to create new programs or to expand existing programs.  

Lastly, to ensure a healthy fiscal future, Texas needs stronger state spending limitations.  The current constitutional spending limitation has allowed state spending to double every ten years, outpacing both population growth and inflation.  Fiscal restraint now, and in the future, is imperative to strengthen the economy and safeguard against future deficits, which is why we will fight to enact a stronger, more effective statutory requirement to limit spending.  

Ultimately, the key to a strong, vibrant economy lies not in handouts or bailouts, but in sound and responsible tax, fiscal, and educational policies that encourage growth, risk-taking and opportunity.

Christian, Harper-Brown, Paxton, Berman, Creighton, Flynn, Hughes, King, Laubenberg, Morrison, Parker, and Taylor serve in the Texas House of Representatives and are the Board of Directors of the Texas Conservative Coalition, the conservative caucus of the Texas Legislature.