Critics: Texas legislature passes 'California style budgeting'

On the third to last day of session, the Texas legislature advanced a two-year $338 billion budget that fiscal conservatives argue is “California style budgeting.”

The Texas House and Senate approved a conference committee bill Saturday that finalized SB 1, the state’s budget.

“Texas becomes stronger and stronger each biennium because our conservative principles guide our approach to budgeting,” Lt. Gov. Dan Patrick said. “These principles have kept our state on the right track and will continue to do so for years to come. The Senate’s All Funds budget for Texas was 1.2% larger than last biennium, well within our limit of population growth times inflation.”

Patrick says the bill commits “a record $51 billion for property tax relief” with “nearly one out of every four dollars in state funds” devoted to property tax relief. The budget also includes a record $8.5 billion for public education funding, The Center Square reported.

With record high spending, the legislature still kept the budget conservative, Patrick argued, “with billions of dollars unspent and without touching the rainy day fund” that will “keep our state prosperous over the next biennium and beyond.”

Despite Texas posting a $24 billion surplus and calls from fiscal conservatives to cut spending, waste, fraud and abuse, and implement meaningful tax reform, the Republican-led legislature expanded spending and spent the surplus.

Patrick said the state’s $338 billion All Funds budget was a 1.2% increase from the last biennium; the $237.1 billion All State Funds budget was a 4.8% increase.

These and other claims made by Republicans in support of the budget are “wildly misleading,” economist Vance Ginn argues in an analysis. Ginn helped author the 2017 federal tax cuts under President Donald Trump, led tax policy at the Texas Public Policy Foundation and now runs an Austin-based consulting firm.

If the budget “is what passes for fiscal conservatism in Texas, then California-style budgeting has officially arrived in the Lone Star State,” Ginn said. “Texans aren’t seeing relief – they’re seeing rising tax bills.”

The $51 billion claim refers to “every dollar allocated to property tax relief since 2019, spanning four budget cycles: 2020–21 through 2026–27,” Ginn said, not from a single two-year budget approved on Saturday. Since 2019, the legislature appropriated roughly $1.16 trillion in total funds, meaning “‘record tax relief’ equals just 4.4% of overall appropriations – while the other 95.6%, or $1.1 trillion, went to growing government,” Ginn said.

“Of the $51 billion, only $3.5 billion is truly new property tax relief,” Ginn added. Another $3 billion in property tax relief was already included in current law, after the legislature enacted HB 3 in 2019, which automatically implements relief “unless the Legislature deliberately chooses not to fund it,” he said. “At most, only $3.5 billion of new relief is at stake – barely a drop in the bucket” compared to the state’s $24 billion surplus.

State Rep. Brian Harrison, R-Waxahachie, said the budget that passed is “the most bloated, liberal, budget ever written in the history of the state of Texas.”

Instead of returning the $24 billion surplus to “the overtaxed, hard working men and women of the state of Texas,” the budget “funds just about every liberal priority under the sun,” he said. The budget includes “doubling down and increasing budgets for state agencies and entities that are engaged in DEI and transgender ideology” and “puts crony corporatism and corporate welfare on steroids.”

More importantly, he argues, is what the budget doesn’t do: reduce property taxes.

“The men and women of the state of Texas wanted us to do just one thing this session … only one thing … to get the crushing burden of property taxes under control,” and the legislature “abjectly failed.”

Based on current projections and what’s in the budget, “the vast majority of property taxpayers and property tax bills in the state of Texas are going to go up,” Harrison said. “This budget represents an absolute betrayal of the hard-working men and women of the state of Texas and they deserve better. There is no way a fiscally conservative Republican” could vote for it.