Senator Eliot Shapleigh - El Paso, Texas

How does a state that largely resents tax increases and is often chided for short-changing public services increase spending about 50 percent over eight years?

With help from a growing population, inflation and the federal government, that's how.

The two-year state budget totaled $102 billion in 2000-01. In the past two weeks, the House and Senate approved budgets that would push spending past $150 billion in 2008-09. Key lawmakers will now go to work on a final plan for the Legislature to approve before leaving town May 28.

Whatever they come up with, the latest budget is unlikely to change the fact that, adjusted for population growth and inflation, spending in Texas has actually grown little even as billions of new dollars have poured into state coffers.

From 2000 to 2006, state and federal spending in Texas increased an average of 1.7 percent per year after being adjusted for population and inflation, according to the Legislative Budget Board. The growth has been even slower since current legislative leaders took over in 2003.

The budget for general revenue — the state dollars that lawmakers can spend however they choose — actually decreased about 1.3 percent per year from 2000 to 2006 when adjusted for population growth and inflation, the budget board's figures show.

In actual dollars, "the budget has to grow 8 percent (over two years) just to not get any worse," said Eva DeLuna Castro of the Center for Public Policy Priorities, which supports more spending on programs to help low-income Texans. "There are going to be 24 million people in this state, and the price of everything the state buys will go up."

She pointed out that both the Senate and House budgets would grow more slowly than population and consumer inflation over the next two years, according to projections this year from Comptroller Susan Combs. The Senate plan increases total spending 7 percent over two years; the House budget increases it 5 percent.

Growth in the state leads to greater demand for services, and inflation makes it more expensive to meet those demands. Enrollment in public schools, for instance, grew from 3.9 million in 1999 to 4.5 million in 2006.

During that time, the average salary for teachers grew from $34,336 to $41,744. That average is even higher now because lawmakers gave teachers a $2,000 raise in the fall.

"You've got substantially rising health care costs in not just Medicaid but also the state's insurance costs as the largest employer in the state," said Dale Craymer, chief economist at the business-backed Texas Taxpayers and Research Association. "You also have the cost of education increasing with teacher pay substantially higher today than it was 10 years ago. And on top of that, we have several million more Texans to provide services for."

Because of population growth and inflation — the same factors driving the demand for more spending — sales tax collections have increased over the decade without an increase in the tax rate. The sales tax is state government's largest source of revenue.

But while tax rates have remained flat, college tuition and various other fees that Texans pay have increased, at times dramatically.

Sometimes, budget growth has more to do with decisions in Washington than Austin.

In spring 2003, Texas lawmakers approved a $118 billion budget in the face of a $10 billion shortfall. But by the time they returned for their 2005 session, that budget had grown to $126 billion, largely because of greater-than-expected demand for some programs and the unexpected arrival of billions in federal money for highways, education and health and human services.

Although some complain that the new state budget will grow too much, others say it's not growing enough.

Sen. Rodney Ellis, D-Houston, criticized the Senate version of the budget for setting aside money to pay for future property-tax cuts while providing funding for fewer people to be covered in the Children's Health Insurance Program than six years ago and handing out fewer Texas Grants. Those grants cover college costs for students who take rigorous courses in high school and show financial need.

"We are still sacrificing middle-class and low-income Texans in the best of times," Ellis said. "We're making tax cuts an entitlement while underfunding programs vital to our state's future."

Defenders of the budget, which the Senate passed 26-5 on Thursday, pointed to the $1.8 billion increase it provides to upgrade children's Medicaid in response to a federal lawsuit. Medicaid is the state-federal health care program for low-income people.

The budget also boosts spending on higher education more than 10 percent, increases spending on state parks and attempts to make the beleaguered Teacher Retirement System pension fund actuarially sound.

"Some of us wanted to spend a lot more; some people wanted to spend a lot less," said Sen. Judith Zaffirini, D-Laredo. "So this was a compromise. It's a good bill."