Two Bills Up During The Special Session Would Limit Local Spending

Jul 31, 2017

The Texas Senate has been moving quickly on many of Gov. Greg Abbott’s priorities for the special legislative session. But one item has seen little movement: a spending cap on city and county budgets in the state.

State Sen. Craig Estes (R-Wichita Falls) authored Senate Bill 18, which limits budget growth for cities and counties. Local governments would be limited to either the amount they spent the year before or a limit calculated by multiplying statewide population growth, which has stayed around 2 percent for the past decade, by a state inflation rate. (The U.S. Bureau of Labor Statistics says it doesn't publish state-specific inflation rates. Estes’ office did not return an email about this point).

But even Estes says there may be some potential issues with how the bill is written.

“We know that there are some areas of the state growing faster than the state as a whole,” he told a Senate committee last week. A House companion of SB 18, HB 206, would use local population growth to calculate this limit.

Austin, for instance, saw its population increase by nearly 3 percent last year. Georgetown grew even faster, at 5.5 percent in 2016.

“Of course that means there’s all kinds of things that come with that growth,” said Keith Hutchinson, communications manager for the City of Georgetown. “More demand for police and fire and streets and street maintenance.”

Between FY2016 and FY2017, Georgetown saw a 13 percent increase in its budgeted expenses. Austin saw a 3 percent increase in expenditures over the same period. Hutchinson said a limit on spending could make it difficult for the city to respond to its rapid growth.

“A limit that would impose either a statewide metric or even another metric can be a real problem when you’re trying to meet those demands,” he said.

Supporters of SB 18 say there's a fix for that. The bill would allow a city that wants to bust the limit to ask voters for permission to do so.

It’s a mechanism used by other cities in states that have imposed local spending limits. In the early 1980s, lawmakers in Arizona amended the state Constitution to include a cap on local government spending tied to local population growth and cost-of-living changes. Lawmakers included a provision allowing residents to vote every four years for “home rule,” or allowing local leaders to bypass the limit and go about their usual budget process.

“It’s basically saying it allows Phoenix residents and their elected representatives to continue to locally control the priorities of Phoenix,” said Tracy Reber, the deputy budget and research director for the City of Phoenix. According to Reber, since the state made this change, Phoenix residents have voted for home rule nine times – every time it was placed on the ballot.

And if they hadn’t?

“We exceed the constitutional limitation by almost a billion dollars a year,” Reber said.

Senators could take up SB 18 Monday. Its House companion, HB 206, has yet to be voted on by a House committee.