Spending growth tied to population and inflation

The text as introduced · 1,226 words

By: Toth
H.B. No. 5449

A BILL TO BE ENTITLED

AN ACT

relating to a limitation on the rate of growth in state and local

appropriations with the return of over-collected taxpayer money by

reducing taxes.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 316.001, 316.002, and 316.006,

Government Code, are amended to read as follows:

Sec. 316.001. (a) For purposes of this section, "all funds

appropriations" means appropriations from:

(1) the general revenue fund in the state or local treasury;

(2) a dedicated account in the general revenue fund in the

state or local treasury;

(3) a general revenue-related fund in the state treasury as

identified in the biennial statement required of the comptroller

under Section 49a, Article III, Texas Constitution; and

(4) the other state funds, other local funds, and federal

funds in the state or local treasury.

(b) In each state fiscal biennium, the rate of growth of

appropriations from all revenue sources, and each local fiscal year

may not exceed the average taxpayer's ability to pay for the cost of

funding government.

(c) The rates of growth of state funds appropriations in a

state fiscal biennium or political subdivisions shall not exceed

the estimated prior three-year average annual rate of growth of

this state's population during the three calendar years preceding

the regular session for which appropriations are made, adjusted by

the estimated prior three-year average annual rate of inflation

during the same period, as determined under Section 316.002.

(d) The Legislative Budget Board shall determine the rates

described by Subsection (e) using the most recent information

available from the United States Bureau of Labor Statistics and the

United States Census Bureau.

Sec. 316.002. DUTIES OF LEGISLATIVE BUDGET BOARD. (a)

Before the Legislative Budget Board transmits the budget for the

next state fiscal biennium as prescribed by Section 322.008(c), the

board shall establish:

(1) the limit on the rate of growth of appropriations

from state tax revenues for that state fiscal biennium, as compared

to the previous state fiscal biennium, and the limit on the rate of

growth of appropriations for political subdivisions for that local

fiscal year based on :

(2) the limit on the rate of growth of all funds

appropriations for that state fiscal biennium or political

subdivision fiscal year, as compared to the previous period, by

summing:

(A) the prior three-year average annual rate of

growth of this state's population preceding the regular session for

which appropriations are made; and

(B) the prior three-year average annual rate of

inflation using the chained-consumer price index preceding the

regular session before appropriations. (d) Except as provided by

Subsection (e), the board shall determine for the next state fiscal

biennium a limit on the amount of:

(1) state fund appropriations from all revenues by

multiplying the amount of all fund appropriations from all tax

revenues for the current state fiscal biennium by the sum of one and

the limit on the rate of growth of appropriations from all tax

revenues established by the board under Subsection (a)(1); and

(e) If the rate determined under Subsection (a)(2) is a

negative number, the amount of state funds appropriations for the

next state fiscal biennium may not exceed the amount of state funds

appropriations in the current state fiscal biennium nor could a

political subdivision.

(f) To ensure compliance with this subchapter and Section

22, Article VIII, [ Section 22, of the ] Texas Constitution, the

Legislative Budget Board may not transmit in any form to the

governor or the legislature the budget as prescribed by Section

322.008(c) or the general appropriations bill as prescribed by

Section 322.008(d) until the board adopts:

(1) the limit on the rate of growth of appropriations

from state tax revenues not dedicated by the constitution under

Section 316.001(b); and

(2) the limit on the rate of growth of al funds

appropriations under Section 316.001(c) [ has been adopted as

required by this subchapter ].

(g) [ (e) ] In the absence of an action by the Legislative

Budget Board to adopt the limits [ a spending limit ] as provided by

this section:

(1) for purposes of Section 316.001(b):

(A) [ in Subsections (a) and (b), ] the estimated

rate of growth of [ in ] the state's economy from the current state

fiscal biennium to the next state fiscal biennium shall be treated

as if it were zero ; [ , ] and

(B) the amount of state tax revenues not

dedicated by the constitution that could be appropriated within the

limit established by the estimated rate of growth of [ in ] the

state's economy shall be the same as the amount [ level ] of those

appropriations for the current state fiscal biennium ; and

(2) for purposes of Section 316.001(c):

(A) the estimated average biennial rates of

growth of this state's population and of monetary inflation shall

be treated as if they were zero; and

(B) the amount of all funds appropriations that

could be appropriated within the limit established by that

subsection shall be the same as the amount of those appropriations

for the current state fiscal biennium .

Sec. 316.006. LIMIT ON BUDGET RECOMMENDATIONS. Unless

authorized by majority vote of the members of the board from each

house, the Legislative Budget Board budget recommendations :

(1) relating to the proposed appropriations from [ of ]

state tax revenues not dedicated by the constitution may not exceed

the limit on appropriations from those sources adopted by the

committee under Section 316.005 ; and

(2) relating to the proposed state funds

appropriations may not exceed the limit on appropriations from

those sources adopted by the committee under Section 316.005 .

SECTION 2. Section 316.007(a), Government Code, is amended

to read as follows:

(a) The Legislative Budget Board shall include in its budget

recommendations :

(1) the proposed limit of appropriations from state

tax revenues not dedicated by the constitution ; and

(2) the proposed limit of all funds appropriations .

SECTION 3. Section 316.008(a), Government Code, is amended

to read as follows:

(a) Unless the legislature adopts a resolution under

Section 22, Article VIII, [ Section 22(b), of the ] Texas

Constitution , raising the proposed limit on appropriations from

state tax revenues not dedicated by the constitution , the proposed

limit is binding on the legislature with respect to all

appropriations for the next state fiscal biennium made from those

[ state tax ] revenues [ not dedicated by the constitution ]. The

proposed limit on all funds appropriations is binding on the

legislature with respect to all appropriations for the next state

fiscal biennium made from those sources unless the legislature

adopts a resolution raising the proposed limit that is approved by a

record vote of three-fourths of the members of each house of the

legislature or a political subdivision. The resolution must find

that an emergency exists, identify the nature of the emergency, and

specify the amount authorized. The excess amount authorized under

this subsection may not exceed the amount specified in the

resolution.

(b) Any over-collected taxpayer money shall be returned by

reducing taxes.

SECTION 4. The changes in law made by this Act apply only in

relation to appropriations made for the state fiscal biennium

beginning September 1, 2025, and subsequent state fiscal bienniums.

SECTION 5. This Act takes effect September 1, 2025.