» House, Senate set to negotiate spending cap,

House drastically alters, then approves measure limiting state spending.

A bill the Texas House approved Wednesday would further limit state spending, but not in the exact way fiscal hawks — or the Senate and Gov. Greg Abbott — wanted.

The Texas Constitution already says state spending cannot grow faster than the state’s economy, although it applies to less than half of the two-year budget. Republicans including Abbott, Lt. Gov. Dan Patrick and conservative groups like Empower Texans and the Texas Public Policy Foundation have called on lawmakers to expand that spending limit to cover all of the budget, as well as change the way it is calculated — in a way that likely would make it lower — and also require a higher vote threshold to exceed it. (Currently, a simple majority vote is needed in the House and Senate).

The version of Senate Bill 9 the Senate approved in early April on a 19-12 vote would have done almost all of those things, stipulating that the rate of growth in the state’s economy be defined as the growth of population plus inflation — rather than personal income growth — and requiring a three-fifths vote in the House and Senate to exceed the spending limit. It al- so would have made the cap apply to all state general revenue rather than just state money that is dedicated for a specific purpose.

The House, however, voted 104-42 Wednesday to significantly alter the bill.

The committee substitute for SB 9 would expand the new cap so it actually would apply to the entire budget, including all non-federal revenue. But it also reinstates the simple majority vote threshold currently needed to exceed it. And it scraps the blanket population growth plus inflation calculation — with inflation being based on the Consumer Price Index (CPI) — and instead calls for the Legislative Budget Board to recommend caps for individu- al “spending categories,” including education, health care and transportation.

The budget board would calculate those caps based on “the rate of inflation in a representative set of goods and services for which appropriations are made for that spending category.”

State Rep. John Otto, R-Dayton, who authored the revised version of SB 9, said Tuesday that the “use of the CPI as an inflation adjustment is inaccurate for any of the major functions of government since it does not adequately reflect the impact of inflation on the purchasing power of the state government budget dollar.”

“If we’re sincere about truly developing a measuring stick about what population and in- flation does to the state budget, this is the framework we should be using,” said Otto, the House’s lead budget writer, drawing a comparison between the House’s proposed approach and the Senate’s.

The bill now goes back to the Senate, which must decide whether to accept the version the House approved.

State Sen. Kelly Hancock, author of SB 9, plans to reject the changes and request a socalled conference committee to negotiate differences.

Abbott’s press office did not respond to a request for comment about the House’s version of the bill.