LBB Delays Vote On Spending Caps

Shifting $14 billion in state spending to accomodate the tax reform plans passed by the legislature in special session earlier this year combined with new state dollars to replace local dollars lost in the tax shift has created a bit of a mess.

Why the big mess? It’s the state constitutional limit on spending, also known as the “spending cap,” the “the revenue cap,” and “Bob Bullock taunting us from the grave.”

Legislative leaders are trying their best to figure out how not to hit the celing imposed by the caps. However, it isn’t likely to happen. Under the cap, spending that is not constitutionally dedicated to a specific program should not increase faster than personal income. The Legislature can, however, exceed the cap with a simple majority vote.
First, however, the Legislative Budget Board must choose an estimate of personal income growth to actually set the cap. The LBB was supposed to vote on that yesterday, but delayed that vote in order to set the lowest estimate possible.

Regardless of what the growth rate for personal income is set at (anywhere from 13 to 17 percent), it still would not be sufficient to sidestep the spending cap because of the tax reform package.

The reality is that legislators will simply have to vote to break the spending cap.

However, with new hard-liners like Dan Patrick in the Texas Senate and a cache of hardliner Republicans still in the House, a vote to break the spending cap may be difficult.

For one thing, it gives Texas’ anti-tax wingnut crowd (and, more importantly, its political action committees) fuel for the 2008 primaries, and may put a number of GOP incumbents in serious danger.
The only other option is a constitutional amendment, but there is no time to get voter approval for one before the legislature has to approve the budget for the coming biennium.

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