The Texas Public Policy Foundation wants every federal grant that a Texas government pursues to pass through a single state office before the application goes to Washington. In a policy brief published Wednesday, TPPF’s Ben Crockett and James Quintero propose rebuilding the Office of State-Federal Relations, the agency that represents Texas in Washington, as an Office of State Sovereignty and making it the state’s “single point of contact” for federal assistance.
Under the proposal, “all federal grant applications, whether submitted by a state agency, county, municipality, or special district, would undergo state-level review prior to submission.” The office would weigh the costs and benefits of major federal funding streams, run a public grants database that local governments would be required to report to, and assess each year how exposed Texas is to swings in federal money. Where it found a program coercive or at odds with state priorities, it would work with the attorney general and the comptroller on alternatives, up to withdrawing from the program or fighting the conditions in court. “Texas should refuse any federal funds that compromise state policy or impose ideological mandates contrary to the state’s priorities,” the authors write.
The brief’s case rests on the scale of the money. Texas state and local governments took in $84.3 billion from Washington in fiscal 2023, up from $45.9 billion in 2017, according to TPPF, and direct federal aid made up between 32 and 44 percent of state revenue over that stretch. Fort Worth, the brief notes, estimates that replacing its federal funding would take a 19.8 percent increase in its property tax rate.
Numbers like those are the ones critics of Texas independence cite as proof that Texas leans on Washington. “Can Texas Make It?”, the Texas Nationalist Movement’s fiscal assessment, runs the same money through Washington’s own books and the Comptroller’s, and the ledger comes out the other way.
Federal grant money arrives only after Texas spends its own first. The Medicaid match releases nothing until Texas commits $16 billion to $20 billion a year of state funds, and highway money waits on Texas covering its fifth of the cost. About a fifth of what Texas spends from its own funds, on the order of $20 billion a year, goes to programs Washington mandates and only partly funds. Congress promised to cover 40 percent of the added cost of special education and pays closer to an eighth, a shortfall of about $2.3 billion a year in Texas alone. “Much of what critics count as Washington’s spending in Texas is money Texans paid for twice,” the assessment says, “once in the federal taxes that fund the grant and again in the state taxes that unlock it, on terms they had no vote in setting.”
The studies that show Texas taking more than it pays count Washington’s borrowing as income. Washington spends about $1.37 for every dollar it collects, and Texans co-sign about $150 billion a year of that new debt. The assessment treats the gap as what it is: “Borrowed money is not income. It is a tax postponed.” On that basis Texans pay about 8 cents of every dollar the federal government raises and draw back about 7 cents of every dollar it spends. By USAFacts’ accounting for fiscal 2024, Texas sent Washington about $68 billion more than it received, which the assessment ranks as the third-largest net contribution of any state, behind California and New York.
The assessment then counts every federal grant, base, agency, and contract in Texas as a cost Texas would carry on its own, and still finds that Texans already raise enough at today’s tax levels to fund the full cost of governing Texas. “The finding is self-sufficiency, a people paying very close to what their government costs,” it says. “Not a windfall, and we claim none.”
The brief asks lawmakers to write the office into statute and cites a 2011 Utah grant-review law and a 2013 Indiana executive order as precedents. The Legislature next convenes in January.
The brief treats the conditions attached to federal money as the problem, and the assessment’s numbers show what those conditions cost Texans. An Office of State Sovereignty could refuse the worst of them. It would still be screening money that left Texas first. Only independence keeps it here.
Comments have moved. The real debate about Texas independence now happens with thousands of Texians in the app.
Get the TEXIAN app
