The exploding costs of gas, groceries, furniture, and everything in between hurts millions of Americans—especially those with lower incomes. Washington DC’s solution to this problem is more spending and bigger government. In his State of the Union address, President Biden argued his Build Back Better proposal would help lower costs for American families.
But several states across the country are taking a different approach and adopting something called a conservative budget—which limits state government spending to no more than population growth plus inflation.
Pioneered by the Texas Public Policy Foundation, a conservative budget prevents state governments from burdening citizens with higher taxes they can’t afford.
Here’s how it works. If Texas, for example, saw a population growth of 3.2 percent in 2018, and the inflation rate was 4.8 percent, passing a conservative budget the following year would mean lawmakers kept spending below 8 percent (3.2+4.8=8). In other words, if the state government spends more than 8 percent, it is spending money that taxpayers don’t have and can’t afford.
As the Texas Public Policy Foundation’s Vance Ginn explained: “Any increase in the state budget should be less than the average taxpayer’s ability to pay for it, as measured by population growth plus inflation, which is why Conservative Budgets are essential for continued opportunities that best let people prosper.”
For years, Texas’ state budget often grew considerably faster than Texans’ ability to pay for it. The Texas Public Policy Foundation knew this expansive growth was harming Texans, so TPPF introduced the Conservative Texas Budget (CTB) in 2015. Through a comprehensive outreach and communications campaign, TPPF educated Texas lawmakers and the public on the benefits of a conservative budget. Texas took TPPF’s recommendation and adopted its first conservative budget in 2015.
Conservative state budgets prevent state lawmakers from burdening Americans with higher taxes. States that pass conservative budgets keep tax rates low—which can spur economic growth, create jobs, and allow hard-working Americans to keep more of their money.
Since its inception, the Conservative Texas Budget has saved Texas families hundreds of dollars in taxes per year. These families can use this money to pay for necessities such as rent, groceries, and childcare. With skyrocketing inflation and the rising costs of basic goods, Americans need low tax rates more than ever.
Adopting a conservative budget can also help a state prepare for the next recession or pandemic. By not spending beyond its means, a state government will be better suited to address the next economic crisis.
Texas passed its first conservative budget in 2015 and has continued to pass conservative budgets in the following fiscal years. Thanks to the Texas Public Policy Foundation, Texas has become a national model for other states looking to adopt responsible budgets that restrain the growth of government and the burden felt by taxpayers.
TPPF is partnering with other state think tanks to spread this good idea to other states. The Foundation is working with the Alaska Policy Forum, Frontier Institute in Montana, Kansas Policy Institute, and Mackinac Center in Michigan.
In 2021, with the help of TPPF and the Frontier Institute, Montana passed Conservative Montana Budget. Frontier Institute President and CEO Kendall Cotton noted: “By adopting common-sense fiscal restraints like Montana and Texas have done, governments at all levels can start putting taxpayers first.”
Thanks to the Iowans for Tax Relief Foundation, Iowa also passed a conservative budget in 2021.
The 2023 Conservative Iowa Budget
Iowans for Tax Relief Foundation and Texas Public Policy Foundation
A Conservative Budget for Tennessee
Beacon Center of Tennessee and Texas Public Policy Foundation
The Montana Example
This Year, State Governments Can Put Their Fiscal Houses in Order
Iowans for Tax Relief in National Review
Approve a Sustainable Michigan Budget
Mackinac Center for Public Policy and Texas Public Policy Foundation
2023 Responsible Alaska Budget
Alaska Policy Forum and Texas Public Policy Foundation
A Responsible Kansas Budget
Kansas Policy Institute and Texas Public Policy Foundation