spot_img

Op-Ed: Texas can have more tax relief if the legislature stops its out-of-control spending

Date:

spot_img

In 2023, Texas led the U.S. on many fronts: job growth, economic expansion, energy production, and a record surplus of $33 billion. This was when many other states, especially California, were reporting economic challenges and deficits.

Despite Comptroller Glenn Hegar’s warning to spend wisely, the 88th Texas Legislature chose out-of-control, record spending. This isn’t a record Texans wanted because it means less available money for property tax relief.

Texas can reverse course to lead the U.S. in fiscal responsibility by passing sustainable budgets that result in more surplus to return to taxpayers by reducing school property tax rates until they are zero.

In 2023, the Texas Legislature passed the largest spending increase in state history. The fiscal 2024-25 budget increased appropriations by 21.3% to $321 billion, or, excluding federal funds, by 31.7% in state funds to a staggering $219 billion.

Even more disturbing is that currently reported amounts may increase further as some legislation passed in the special sessions increases spending. Either way, the budget growth far eclipsed the rate of population growth plus inflation, which increased by 16% over the prior two years. This rate is a good comparison because it represents the average taxpayer’s ability to pay for government spending.

This record spending, along with records of over $10 billion in new corporate welfare payments even to multi-billion-dollar companies and more than $13 billion in constitutional amendments that move money outside of the state’s spending limit, sets a challenging path forward. The bloated fiscal 2024-25 budget now looms as the new baseline for lawmakers, expanding government to the chagrin of many Texans.

The excessive budget increase overshadowed Gov. Greg Abbott’s historic tax relief compromise signed into law during the Legislature’s second special session. While hailed as the largest property tax cut in Texas history, it fell short.

The total for new school property tax relief was $12.7 billion. It falls short of the $14.2 billion appropriated for reducing school property taxes in fiscal 2008-09 due to a Supreme Court of Texas ruling that the school finance system was unconstitutional. But when the amount is adjusted for inflation since then, the $14.2 billion would be about $21 billion.

Even when factoring in the state’s contribution of $5.3 billion to maintain reductions in school property taxes in prior sessions, the $18.3 billion in combined relief remains well below the $21 billion needed to be the largest in Texas history.

It should be noted that the $14.2 billion for property tax relief for fiscal 2008-09 helped cut school property taxes by just $2 billion in 2007. But then school property taxes increased by $2.3 billion in 2008, surpassing 2006 before the relief by $300 million. Total property taxes decreased by just $450 million in 2007 and then increased by $3.8 billion in 2008.

While those with property received some relief in their property tax bill in 2023, especially those with a homestead exemption, the amount will not be nearly as much as some lawmakers claimed. Worse still, these savings won’t likely last as local governments continue to push to pass bonds and increase spending and taxes.

The Legislature should focus this interim on doing efficiency audits across the government, much like it started with safety net programs. Finding savings across the government with so much excessive spending recently will help maintain the property tax relief passed last year; spending excesses will not lead to calls for tax increases, and resulting surpluses can put school property taxes on a fast path to zero next session.

There will also be an opportunity to put the new, stronger statutory spending limit in the constitution and have this limit cover spending by local governments. There should also be a requirement that at least 90% of resulting surpluses by the state go toward reducing school property tax rates and by local governments to reduce their own property tax rates.

Doing so will achieve fiscal sustainability and put all property taxes on a path to elimination.

In the meantime, Texans have opportunities in the March primary and November general election to consider many candidates’ policy proposals. Do candidates on the ballot support eliminating property taxes, reducing government spending, and increasing prosperity?

We need more politicians pushing for these things because they benefit Texas families and entrepreneurs. Let’s not have big-government socialism creep more into Texas but turn back toward free-market capitalism that has contributed to abundance.

Read the Black Chronicle Black History Edition for Free! Click Below

Read the Black Chronicle Black History Edition for Free! Click Below

spot_img
spot_img

Subscribe

Share post:

Popular

More like this
Related

Down to the Wire: Congress Prevents Another Shutdown

Congress pulled through at the 11th hour, sending a...

Wisconsin Democrats pitch own PFAS proposal

(The Center Square) – Just days after Gov. Tony...

Secretary of State’s ‘misinformation’ program flags factual stories on noncitizens voting

(The Center Square) – An artificial intelligence company working...

Haley campaigns in Virginia ahead of Trump rally

(The Center Square) – GOP presidential hopeful and former...