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Texas could be on the cusp of a transformative moment in public finance policy. With the introduction of House Bill 5449 (HB 5449), House Joint Resolution 212 (HJR 212), and House Bill 5532 (HB 5532), some state lawmakers are championing a bold vision of fiscal responsibility and taxpayer-first governance. These bills represent a significant shift toward ensuring government lives within its means, with clear, data-driven constraints on how much state and local budgets can grow over time.
This suite of legislation offers more than just a new approach to budgeting—it provides a mechanism for protecting families and businesses from runaway government growth while making certain that excess tax collections are returned directly to the people. Taken together, these proposals affirm Texas’s commitment to efficiency, accountability, and sound economic stewardship.
HB 5449: Linking Budget Growth to Taxpayer Affordability
HB 5449, authored by State Rep. Steve Toth (R-The Woodlands), seeks to tie state and local government spending growth to a taxpayer’s actual ability to fund that growth. The bill proposes that all funds appropriations—covering everything from general revenue to federal and local monies—cannot grow faster than the combined average of population growth and inflation over the previous three years.
This commonsense approach ensures that government budgets do not expand unchecked but instead reflect the real-world economic conditions of the people they serve. Most importantly, HB 5449 includes a powerful provision requiring that any surplus collected beyond the spending cap be returned to taxpayers through tax reductions. This not only provides immediate financial relief but also strengthens trust in the fiscal operations of the government.
The legislation places the responsibility for calculating these limits with the Legislative Budget Board, which will rely on data from the U.S. Census Bureau and Bureau of Labor Statistics to ensure fairness, transparency, and accuracy in every biennial cycle.
HJR 212: Embedding Fiscal Limits in the Texas Constitution
To reinforce and protect the reforms in HB 5449, HJR 212, also authored by Toth, proposes a constitutional amendment that would permanently establish the same limits on appropriations growth in the Texas Constitution. This move would not only codify responsible budgeting practices but also safeguard them from being eroded by future political shifts or short-term interests.
Under this resolution, the only way for government spending to exceed the cap is through a declared emergency and a supermajority vote in both chambers of the Legislature. Moreover, it mandates that any over-collected funds must be returned to taxpayers by reducing tax rates—ensuring Texans directly benefit from a prosperous economy.
If passed by the Legislature, this proposed amendment will be placed on the ballot for voter approval on November 4, 2025. This gives Texans a direct voice in securing long-term protections against uncontrolled spending growth.
HB 5532: Clarifying and Strengthening the Spending Limit Formula
State Rep. Cody Vasut’s (R-Angleton) HB 5532 complements the other two proposals by enhancing clarity and predictability in how spending limits are calculated. This bill defines the base value for appropriations as the amount authorized in the prior biennium and introduces a refined formula for determining allowable growth.
The new calculation multiplies the rate of population growth by the rate of inflation to produce a precise, economically grounded ceiling for future spending. By locking in this standard, HB 5532 ensures that budgeting decisions are based on measurable factors rather than political discretion.
Addressing Rapid Growth in Texas State Government Spending
Texas has witnessed a significant escalation in state government spending over recent years, underscoring the urgency for fiscal reforms. The proposed budget for the 2026–2027 biennium, as outlined in Senate Bill 1 (SB 1), totals $336.1 billion, marking the largest state budget in Texas history. This represents a 4.4% increase in total funds and an 8.2% increase in state funds compared to the previous biennium. Notably, state funds have surged by 42.7% since the 2022–2023 budget, and total funds have risen nearly 27% during the same period.
This rapid growth in spending far exceeds the combined rates of population growth and inflation, which were 9.2% and 7.1% respectively during the 2024–2025 biennium. Such a trajectory raises concerns about the sustainability of current fiscal practices and highlights the necessity for implementing measures like HBs 5449 and 5532, along with HJR 212. These legislative proposals aim to align government spending with economic realities and taxpayer capacity by capping spending growth to the sum of population and inflation increases, ensuring that government expenditures remain sustainable and reflective of the state’s economic conditions.
Conclusion: Will Texas Lock In Its Fiscal Future?
As of now, HBs 5449 and 5532 and HJR 212 have not yet been referred to a committee in the Texas House of Representatives.
The introduction of HB 5449, HJR 212, and HB 5532 reflects a forward-thinking, fiscally responsible approach to government budgeting in Texas. By tying spending growth to population and inflation, mandating taxpayer refunds for over-collection, and embedding these principles in law and the constitution, Texas lawmakers are offering a smart, effective blueprint for long-term economic stability.
These proposals put the needs and capacities of Texas taxpayers front and center, ensuring that the government serves, rather than burdens, the people. As the Legislature continues its work, these measures deserve timely consideration and robust support from every corner of the Lone Star State.
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