Republicans hold all statewide elective offices and run the Legislature. Party leaders don’t want Texas to revert to a pattern that prevailed from 1990 to 2010, when spending rose at twice the pace of population and per-capita income growth, said Talmadge Heflin, a fiscal policy analyst for the Texas Public Policy Foundation, a nonprofit group that promotes limited government.
Governor Rick Perry, a Republican who has held the office since December 2000, wants to tighten limits on spending growth, and opposes new levies or tax increases, according to a “budget compact” he released in April. Disciplined spending policies have helped Texas retain top credit grades from Moody’s Investors Service and Fitch Ratings.
“Today’s revenue estimate is more evidence that we made the right decisions two years ago by budgeting carefully to meet the challenges of the national recession,” Perry said in a statement.
The Texas economy is outpacing other U.S. states because it has the financial strength of Germany and the cost competitiveness of China, said Steve LeBlanc, co-founder of CapRidge Partners LLC in Austin and a former senior managing director at the state’s $110 billion Teacher Retirement System pension fund. “It’s more than just an energy boom,” he said.