“Except in the case of emergency and imperative public necessity and with a four-fifths vote of the total membership of each House, no appropriation in excess of the cash and anticipated revenue of the funds from which such appropriation is to be made shall be valid.” – Texas Constitution of 1876, Article III, Section 49b
Texas has a pay-as-you-go system, which is a fiscal discipline that requires a balanced budget and only permits borrowing under very few circumstances. This means that, generally speaking, the state must generate more revenue to increase spending — and when revenue shortfalls occur, state spending must be reduced accordingly.
Texas’s balanced budget requirement shapes politics and policy in the state. In the video below, former Speaker of the Texas House of Representatives Ben Barnes discusses how the balanced budget requirement shaped the context leading up to the 2003 regular legislative session.