Texas lawmakers have a $27 billion surplus, but a spending cap complicates their goal of lowering

[TexasTowelie]

Texas lawmakers have a $27 billion surplus, but a spending cap complicates their goal of lowering property taxes

by Karen Brooks Harper, Texas Tribune


If Gov. Greg Abbott’s dream of a historic property tax break for Texans is to become a reality in the 2023 legislative session, the Republican-controlled Legislature might have to break the state’s constitutional spending limit for the next two years.

The question is: Would they dare?

The Texas Constitution limits the amount of additional money the state can spend every two-year budget cycle to the rate of the state’s economic growth. In the first public indication of how much tax money lawmakers can add to the 2024-25 budget, the Texas Legislative Budget Board — a panel of legislators led by Lt. Gov. Dan Patrick and House Speaker Dade Phelan — used population growth and inflation forecasts Wednesday to adopt a 12.3% estimated economic growth rate in the next budget cycle.

That means lawmakers can spend about $12.5 billion more state tax dollars in the next budget than they did in the current biennium before the cap is busted, according to current budget numbers. That limit could go up if lawmakers pass a supplemental budget bill early next year that increases spending in the current biennium.

But that $12.5 billion figure is a little less than what it would cost for lawmakers to move forward with Abbott’s goal to use half the state’s estimated $27 billion cash surplus, driven largely by increased sales tax caused by inflation, on property tax relief.

Read more: https://www.texastribune.org/2022/11/30/texas-property-taxes-legislature-budget-cap/