IssuesTaxes & SpendingSome Texas Local Governments Spend Well Above Population Plus Inflation Line

“Major cities and counties in Texas are spending huge sums that are wildly out of step with what many taxpayers can afford to pay,” said TPPF Chief Economist Vance Ginn. “The data should be a huge red flag that we are heading toward unsustainable spending growth and tax increases that kill jobs, punish families, and drive people and businesses out of the state.”

The organization’s analysis lists the spending increase over that metric for seven cities and seven counties along with the cost per citizen in average taxes paid.

The largest percentage spender over the population plus inflation line is Harris County at 114 percent, while the largest monetary cost comes from Dallas at $2,523 per person. Austin follows right behind Dallas in cost per person, and Lubbock County has the second-highest percentage increase at 65.6 percent.

On the opposite end, the lowest percentage increase lies with Brownsville, which lowered its spending in relation to the metric by 6.7 percent and $170 per person.

The City of Houston posted a 0 percent increase because population growth increased at a sharper rate over the last three years to catch up to the city’s spending. Despite that, its cost per person is pegged at $1,183.

The state operates under a population plus inflation spending limit, and made it harder to exceed last session. However, localities do not have such a restraint and fiscal decisions are left to their own discretion.

“Taxpayers would love to see local governments voluntarily adopt these spending limits, but, as long as cities and counties continue their spending binge, it may be necessary for state lawmakers to impose strict parameters to protect taxpayers,” added James Quintero, TPPF policy director for the Government for the People campaign.

In the 2019 session, the state legislature lowered the voter-approval caps on city and county property tax increases from 8 percent to 3.5 percent. During the pandemic, many cities and counties used a disaster loophole that allowed them to increase property taxes to the old 8 percent during the statewide disaster declaration, which continues to this day. In 2021, that loophole was closed, tying the exception only to physical disasters.

Last year, the body restricted localities’ ability to issue non-voter-approved debt, called Certificates of Obligation.

Local governments in Texas have amassed $8,500 in debt per citizen through last year. Cities and counties account for a much smaller portion of that total than school districts, but still total about $2,300 collectively.

Ginn and Quintero asked the legislature to set its own caps on local government spending, suggesting a restriction of all funds spending to the statewide population plus inflation line. This would mean that if Texas’ population plus inflation increased 5 percent during the previous year, then every locality could only increase their spending that same percentage regardless of the growth or lack thereof in their jurisdictions.

The 2020 Census showed Texas added almost 4 million people during the last decade, and its growth shows little sign of stopping.