Texas conservative groups call for zero growth budget and tax cuts

Fiscally conservative groups have called on the state legislature to enact a zero growth budget and issue tax cuts to help Texans suffering from inflation after the state comptroller announced the state was expecting a record $188 billion in revenue estimated for 2024-25 biennium and $32.7 billion surplus. Both are a first in state history.

The Texas Public Policy Foundation said the historic revenue projection should lead to the largest tax cut in state history – if the state legislature acts responsibility.

When announcing the historic projections, Comptroller Glenn Hegar encouraged lawmakers “to spend money wisely and prudently.”

But other groups are saying lawmakers need to cut spending and to return money to taxpayers.

The unprecedented economic “windfall gives the next Texas legislature a historic opportunity to enact the biggest tax cut in Texas history,” TPPF said.

“The 2023 Texas Legislature has a historic opportunity to provide Texans with real tax relief using this windfall budget surplus,” TPPF’s James Quintero said. “This is a once-in-a-generation chance to help people cope with the current cost-of-living crisis and set Texas apart from other tax-and-spend states.”

TPPF proposed a Conservative Texas Budget with zero growth. If the legislature can’t pass a zero growth budget, it suggests the next best alternatives include holding a budget to historical population and inflation trends (12%) or holding it to maximum population and inflation expectations (16%).

At these percentage levels, initial appropriation caps for the 2024-25 budget would freeze growth at 0% at $245 billion, at 12% growth at $274 billion and at 16% growth at $284.5 billion, it says.

It also notes these limits should be seen as “a ceiling, not a floor.”

Texas Taxpayers and Research Association President Dale Craymer said, “An historic surplus calls for historic tax cuts. The numbers suggest Texas could have nearly $50 billion more than lawmakers are allowed to spend under the state’s spending limits. Consequently, lawmakers should make tax relief their top priority – taxpayers should not be asked to pay money to the state that it cannot use.”

Texans for Fiscal Responsibility proposed a Texas Prosperity Plan, which also includes a no-growth budget.

“The old metric of population + inflation growth was a great reform, but it is no longer relevant in an inflationary environment like the one we are currently in,” it said. “The spending cap this cycle would allow our bloated budget to grow another 12.3%. For a government that is already over-budget, increasing the budget by more than 10% is far from conservative.”

“Freezing the state budget at current levels is not only wise as we head into a major economic downturn, but it will also assist in eliminating property taxes by increasing surpluses through spending restraint,” it adds. “It is imperative that the Legislature start reducing the size of government if we plan on having a sustainable model. Spending more is growing the government, and cutting spending is shrinking the government. We call on all lawmakers that call themselves conservative to advocate for a ‘No Growth’ budget and allow surplus dollars to benefit taxpayers all over the state.”

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