“I think, therefore I spend” is the motto of most polticians and it isn’t any different here in Texas. You might say at least Texas isn’t as bad as Washington DC but that really isn’t saying much. In 1978, Texas passed a constitutional amendment to limit government growth and out of control spending but the wording is so vague that Republicans and Democrats alike have ignored it. In fact, not only has the Texas government continued to grow but it has experienced a growth spurt! Texans would have paid $40 billion (yes billion) less in taxes since 1990 if we would have implemented a constitutional amendment that limited government growth to population and inflation. Below is a great graph that shows the disrecpency in past governemnt growth compared to the growth if it would of been tied to population and inflation.

The blue bars in the chart shows unadjusted state spending and the green line represents spending levels if were set for population growth and inflation. As you can clearly see, the gap in between the green line and blue bars continues to expand which has led us to the budget crisis we face today. This is why I am excited to support and tell you about a very important piece of legislation facing the Texas Legislature this session, House Joint Resolution 70. Its authors include Representatives Paxton, Hughes and Weber among others.

According to a HJR 70 fact sheet, “HJR 70 will limit the growth in appropriations from state tax revenue to the rate of population increase plus monetary inflation each biennium.” Furthermore, 2/3rds of revenue surplus will go to relieve property taxes. However, if the legislature sees fit that more funds need to be approperiated it must be done by a record vote and approved by 2/3rds of the members in each house.

This is the type of common sense legislation that we all hope to see from our legislators. HJR 70 will keep government growth and spending in check with a reasonable but high standard to circumvent if necessary. Remember if this was in place in 1990 Texans would have $40 billion extra dollars burning a hole in their pockets. Wouldn’t that be nice to say one day and it be a reality?

Kudos to Jason Embry for providing a list of 50 facts that you may not know about the (then proposed) budget in the Texas House of Representatives. The Texas House passed the budget, HB 1, late last night so some of the numbers might not be exact but it gives you a great since of where the budget stands. It is definitely worth reviewing this list to get a handle on what is going on with the budget and the challeges our legistors are facing. Below are the first 3 items from the list:

1) The proposed House budget costs $164.5 billion, a 12.3 percent spending reduction as compared to 2010-11.
2) It does not raise taxes.
3) It is $7.8 billion short of the money that current law says Texas will owe its school districts over the next two years, and it reduces public education funding by 9 percent, or $5 billion, from 2010-11 levels

However, one budget fact not mentioned in this story is that in the first time in history Texas will spend more to pay off debt on transportation bonds($1.65B) than for new roads($1.15B). A tip of the hat to Robert Garrett, with the DMN, for this information.

The House Appropriations Committee is set to begin hearings this week on whether to use $4.3 billion in Rainy Day Funds to help fill the budget shortfall. It is very important we do not spend these reserve funds, but if we do, it is done in a careful and wise manner. So please follow this easy two step process to make sure Thy Rainy Day Fund Commandments are followed:

Step #1: Read the commandments

Step #2: Contact your legislator

Visit www.fyi.legis.state.tx.us to find the contact information for your state representative and senator so you may voice your opinion. Tell them that you want them to be fiscally responsible and to follow these commandments.

If you would like to learn more about Thy Rainy Day Fund Commandments and what they mean just click here.

Rep. Jim Pitts, chairman of the House Appropriations Committee, is expected to vote out a bill that would authorize the use of $4.3 billion in Rainy Day Funds. The money withdrawn from the fund will be used to cover the budget shortfall we have in the current biennium. This comes at the heels of conservative organizations and legislators and Gov. Rick Perry asking members not to even consider spending any of the Rainy Day Fund until all the cuts that can be made have been made.

I feel Pitts and other members are jumping the gun as they push to use the Rainy Day Fund, especially for the amount they are requesting. First, it violates Rainy Day Commandment #3 because the legislature has yet to exhaust all options to balance the budget with out using the fund. We aren’t even half way through session and the legislature shouldn’t be taken this road so soon. However, in the grand scheme of things we are more likely seeing the first moves in negotiations, so add an extra grain of salt to everything you hear about the Rainy Day Fund from here on out.

It will be interesting the stance Perry will take, concerning the Rainy Day Fund, during his meeting with the House Republican Caucus and press conferences with Fair Tax guru Grover Norquist. Perry should give us a further glimpse into his strategy and expectations this session when it comes to the use of the fund.

If his stance is too hard he will place himself in a dangerous trap, if we see that parts of the fund need to be used, and if it’s too soft he will wash away his Tea Party support. He will most likely stay consistant with what he has said in the past and be very harsh on the idea of spending the the fund and only insert one or two sentences about extenuating circumstances in which it should be spent. I hope he expands a little on this notion to help guide the legislature during this session.

To be honest, I think when the legislature sine dies, I wouldn’t be surprised if $2.5 billion is the magic number. It’s some where in the middle of what each side wants and most of that money will be replenished naturally in the next biennium.

Linda Campbell, with the Fort Worth Star-Telegram(my hometown paper), has just posted an article titled “Would Jesus mandate sonograms but cut pre-K?” She blast Christian legislators for doing un-Christians acts. If you haven’t already guessed it, I think you know what I’m talking about. That’s right, these lawmakers are cutting health and education programs to help cover Texas’ $15-27 billion shortfall.

In the editorial, she uses scripture to try and prove Christian legislators are being hypocritical in there actions. But what she actually does is distort the Lord’s teaching to a point, that if Christians followed her reasoning, the entire Bible and purpose of Jesus would be flipped upside down. She tells the reader that in order for Christians to follow in Jesus’ teachings, we must fund childrens education and other programs through secular governmental entities. Otherwise, we won’t really love children like Jesus does.

However, the Bible does not say or even imply that Christians love should be displayed or honored through governmental entities. Our love for children and the people of this world is done through Jesus, not government.

There are also comparisons that don’t even make any sense.

For instance, she compares the amount of money the government is willing to fund children’s education to Matthew 19:14. This is where Jesus teaches the disciples that children are within the covenant to go to heaven(under Judaism this covenant started at 13), that we should have an unabashed childlike approach to God, and that Jesus loves children.  I’ll give her the benefit of the doubt that she just meant that Jesus loved children and so should we, but as I explained above our definitions are polar opposites.

One thing is for sure, Christians should not use this editorial to get mad or upset but make it into a teachable moment. One reason this budget shortfall has been so “scary” is because people don’t see anyone stepping up to the plate to take care of those that will be affected by the budget cuts. It is time for Christians to step up and serve the Lord by not only taking care of these people but start telling others that they will! Remember it’s a reflection on how well we take care of God’s people when people look toward the government and not toward Jesus.

This is just a small sample of a much larger piece that I could have been written about this bizarre editorial but I will stop here. Since I know that I left a lot out and there is more to be said, I would like to here from you on this matter to see what you think.

“I think, therefore I spend,” is the motto of most politicians and the ones in Texas aren’t any different. This why I have created 3 commandments legislators should not break when they consider using the Rainy Day Fund.

Commandment #1 Thy Bond Rating Shall Not Fallith

We need a healthy Rainy Day Fund  in order to stabilize and increase Texas’ bond rating. In 1987, Texas faced a worse fiscal crisis than what we see today. At the time Texas did not have any significant funds in reserve, which was one of the contributing factors why Texas lost its AAA bond rating. Even after 23 years, we still have not gained back the premier AAA rating. And we certainly will not gain it back if the funds are depleted over the next few sessions.

Commandment #2 Thy Divine Rath Shall Be Funded

These reserve funds are needed in case of catastrophic emergencies that we cannot predict like hurricanes, floods, tornadoes, wildfires, and so on. If we don’t have sufficient funds to handle the fiscal cost of such tragedies, Texas’ budget will be hit twice as hard.

Commandment #3 Thy Funds Shall Not Go To False Idols

The Rainy Day Fund should be used to plug only the most vital areas of the budget that could not otherwise be funded. This should only be done after across the board spending cuts, elimination of waste, and reprioritization of funds have been made. It should not be used to expand or create programs.

Thy will be done.

Texas is facing a $15-$27 billion budget shortfall and programs that pull on your heart strings are being slashed at every turn. Schools, jobs, and children and elderly services are all in jeopardy. The initial reaction by many is to tap into the states $9.6 billion Rainy Day Fund to fill the gap. Because if it’s not “raining” now, then when is it?

I think most people would agree that it is “raining,” but it’s raining a lot harder for the legislators that created the rainstorm.

It’s probably true that we would still be facing a budget shortfall this session if we had spent our money more wisely but we would be walking over puddles instead of consumed in a flood.

For years, members in the Texas Legislature have succeeded when they called for more programs and increased spending. From 2003-2009 the Legislature has appropriated $74 billion more, than if the budget was tied to population growth and inflation. The taxpayer’s money has been spent as fast as it has been coming in.

This is a cause and effect of politicians campaigning on the promise to bring more government spending and more government programs to their district. Now those who have spent our money to ensure their own re-election are facing a harsh reality; that their promises have outpaced the economy.

These politicians will now fight tooth and nail to continue to fund their programs, by raiding the Rainy Day Fund. Some legislator need to do this because government programs have become their platform and spending is their voice. In other words, government produces their relevancy.

And since relevancy is the key to re-election, expect the rhetoric to grow louder and the push to raid the Rainy Day Fund to grow stronger as the budget process moves along.

This is the reason we must keep in prospective why the Rainy Day Fund was created and be careful how we use it.

Please check back here on Monday for the way and manner the Texas Legislature should treat the Rainy Day Fund.

(Flashback: If you remember anything from last session it had to be the circus and uncertainty that surrounded the Voter ID bill. The senate seperated from the traditional 2/3rds rules and listened to an unprecidented 24 straight hours of testimony, from literally bus loads of activist. In the Texas House, the Democrats didn’t have the votes to stop the bill, so they resorted to “chubbing” to run out the clock on session and therefore kill the bill. That coincidentally killed a lot of other innocent bills in the process causing a near revolt in the Texas Senate. The Senate members even mulled over shutting down the senate in response to the chubbing but cooler heads prevailed.)

When Gov. Rick Perry made Voter ID an emergency item he was immediately called out by the media and the left for “ignoring the budget” and being “too poltical.” But whether you like it or not, Perry made the right decision and I’m not even talking about voter fraud. 

Was this move politically motivated? Probably. But at the same time Perry also knows that the less distractions there are, the less likely the budget shortfall will be pushed into a messy special session. A special session will just increase the budget shortfall and make it harder to pass the budget because there will be fewer issues members can trade to get what they want.

However, the media is only fixated upon that is just ”red meat” for the base but they fail to realize that voter ID is already red meat to the base. In fact, it can’t be made any more red. If Perry really wanted to be political he would have let voter ID slowly make its way through the legislature and call out the opposition every chance he got.

This would have undoubtedly stirred up Tea Party rallies at the capitol, pro-voter ID Facebook pages and Twitter accounts, and massive e-mail campaigns by all compelling interest groups to stand with Gov. Perry. He wants to avoid this scenario because then Perry will been seen by the public as “too political” and not focusing on the budget. 

The same scenario could have been played out for the sonogram bill too but it won’t. These issues have instead been put on the fast track so the budget can be the real number one issue this session.

The next move by the governor must be substantial budget proposals if he wants to stay relevant in presidential talk and be the leader Texas needs. He should have already come out with some of these proposals but now that the senate budget is out my guess is he’ll speak on this matter soon.

“I am going to pay an extra $40 billion in taxes and still face the $27 billion shortfall?” Yes, you read it correctly. It’s not a typo. In fact, I stand by it quite firmly. Let me explain…

When Comptroller Susan Combs announced that Texas had a budget shortfall, a heated debate arose between liberals and conservatives on whether it’s a $27 or $15 billion shortfall. “Conventional wisdom” tells us it’s $27 billion because current revenue cannot fund what the state agencies are requesting. Or it can be said that since Texas has a $9 billion Rainy Day Fund, state agencies are already over-funded and there is no need to fund their wish list in the next biennium, that the shortfall is closer to $15 billion. You might even say that there is no budget shortfall. Texas creates a bottom to top budget each session and you can’t have a shortfall when the budget starts at $0.

I know what you are thinking, “Matt that’s nice and all but you are not explaining how Texans will be taxed $40 billion extra and still face this shortfall.” Don’t worry, we are getting close.

The reason there is a $12 billion gap in shortfall numbers, between liberals and conservatives, is because it’s less of a numbers game and more of an ideological question, “How large or small should our government be?” or better yet, “At what pace should our government be allowed to grow?” The latter is the question I am interested in.

Do not believe the notion that since Texas is not severely in debt, like the federal government, that we control government growth any better. The Legislature artificially grew government; matching dollar for dollar to fund programs until they could no longer be funded. Our government, like the housing market, has produced a bubble and it has burst. 

That is why the state should do now what it should have already done 20 years ago. And that is to set funding levels to adjust with population growth and inflation or use a popular formula that involves the state gross domestic product(GDP), that the South Carolina Legislature is currently considering. Either one of these formulas can curb significant increases in government growth and spending that occurred in Texas over the past 20 years.

Yes, spending limitations were adopted in the Texas Constitution in the late 70′s but the limitation wording is so vague that my guess is as good as ssayyyy… Democratic Ways and Means Chairman Rene Oliveria’s. This is why we need a finite measurement that holds our legislators accountable. If proposed and adopted, these limitations would not be unbreakable, but it would add another obstacle that big government Democrats and Republicans would have to face each session.

If the Texas Legislature would have adopted a spending limit like this in 1990, Texans would be enjoying an estimated extra $40 billion burning a hole in their pocket the next biennium.  Just view the data below from previous years.

The blue bars in the chart shows unadjusted state spending and the green line represents spending levels if were set for population growth and inflation. As you can clearly see, the gap in between the green line and blue bars continues to expand which has led us to the budget crisis we face today.

This discrepancy proves that the Texas Legislature needs to pass a Constitutional Amendment or at least a joint resolution setting in place spending limitations. Otherwise we are going to find ourselves in this hole again paying and owing more than we should in the near future.