Balancing the Budget with Smarter Spending
By Senator Craig Estes
When the Texas Legislature convened in January we were confronted with a $10 billion budget shortfall, a constitutional requirement to balance the budget and a mandate from the voters not to raise taxes. The challenge for lawmakers and the public was how do we balance the desire to provide services to those in need, limit the size and scope of government and keep taxes low to strengthen our economy.
From the very beginning the pundits and self-declared policy experts began pushing for new and higher taxes, including a personal income tax, as the solution to our budget problems. Newspapers began advocating the so-called 50/50 plan that would have matched every dollar of spending cuts with a dollar of new revenue, primarily from higher or new taxes. Some of these tax proposals even made it to the floor of the Senate only to be defeated by a majority committed to balancing the budget with a combination of more efficient spending and increased non-tax revenue.
Those advocating new and higher taxes argue that Texans are actually under-taxed. This is an argument I reject as I remind my colleagues that hard working Texans across my district are already carrying their fair share of the tax burden. At some point we have to ask the question: is the budget shortfall a tax problem or a spending problem?
Certainly our tax system is in need of reform to ensure tax fairness, but wholesale increases in the tax burden are the wrong prescription for a struggling economy. Also, when more revenue is the goal you have to consider the impact of higher taxes on job creation and our economic recovery. Historically, raising taxes have sometimes had the opposite affect on actual tax revenue as higher taxes tend to discourage economic activity.
Since massive tax hikes are off the table you have to look at spending and the size of government. Over the previous decade the growth in the state budget far exceeded the growth of family incomes and the state's population. For every dollar the state collected during good economic times, somebody had a "vital" program worth spending that dollar. Calls for restraint on the expansion of government during the strong economy were often ignored and spending continued to increase.
At the beginning of the Legislative Session, state leaders threw out the old budget and set the budget process at zero. They issued a charge to every state agency to not only justify their programs, but their very existence. Starting from scratch agency heads came before the appropriations and finance committees to make their case for every dollar they wanted to spend. Some needs were fully funded while others faced necessary reductions in the effort to meet our constitutional requirement to balance the budget.
To minimize reductions in services and to protect essential programs, the Legislature sought to reorganize and restructure essential government agencies to maximize taxpayer savings and make every dollar count. Some agencies will be combined to streamline efficiencies, some state positions will be reduced, and needs testing will be increased to help determine those who truly need the assistance of government programs.
As the Regular Session of the 78th Legislature comes to a close it is important to remember where we started and how far we have come in our effort to balance the budget without tax increases while addressing the needs of vital programs. I am confident we have fulfilled the mandate given to us by the people and have a budget that should make Texans proud.
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