When taxpayers heard about Texas’ $32.7 billion budget surplus in January, Texans seeking to be free of paying “rent” to the government hoped that this would be the year the Texas Legislature would get serious about property tax relief. After all, despite many recent promises of relief, property tax revenue increased by 12 percent last year.
Unfortunately, the Legislature and the governor are poised to put far more taxpayer money into new spending than into making a serious effort to reduce or eliminate property taxes while using budget gimmicks to hide this from Texans. Yet a path to owning property free of government rent payments is still possible.
This year, according to Senate versions of both SB 30 and HB 1, the Texas Legislature will spend $223.6 billion, a $62.5 billion (38.7 percent) increase over what the Legislature appropriated in 2021. This is by far the largest dollar-spending increase in Texas history and at least the highest percentage increase in recent memory; session-to-session spending went up by 21 percent in 2007. Yet nowhere can taxpayers find this increase reflected in the Legislature’s official budget documents.
Historically, the Texas Legislature uses budget gimmicks when it wants to spend more money than it has on hand, working around the Texas Constitution’s balanced budget requirement. But in recent years, the Legislature has been using gimmicks to hide spending increases from the public.
In 2021, the Texas Legislature appropriated $166.3 billion in state funds for fiscal years 2022-23. Yet, the summary for the Senate’s version of HB 1 this year shows that the expected spending of state funds for 2022-23 is $182.4 billion, $16.1 billion higher. Thus, what taxpayers were told was only a 1.5 percent spending increase in 2021 turns out to be 11.3 percent.
We need more honesty in the budget so that the Legislature is not hiding off-the-books spending. One way the Legislature does this is through supplemental appropriations, which appropriate money “backward” and thus create a higher base that hides spending growth. That is happening again this year in the House version of SB 30. It appropriates $16.6 billion in new general revenue (GR) spending for the current year, which reduced the reported two-year increase of the 2024-25 budget.
On top of that, the House uses another budget gimmick to hide billions of that increase. Higher property taxes in 2022 allows the Legislature use Texans’ property tax and other revenue to reduce current GR spending on education by $8.2 billion. This enables the summary of SB 30 to show an increase of only $8 billion in GR spending, not $16 billion.
Gov. Greg Abbott promised that Texans would get the largest property tax cut in Texas history. But if he signs HB 1 in anything near its current form, that won’t happen. Instead, Big Business will get wealthier and Big Government will get bigger. And because of the budget gimmicks employed by the Legislature this session, taxpayers will only be vaguely aware that this is happening. Until then, they receive their property tax bills in December and find that, once again, promises of real permanent property tax relief did not come true.
The path away from this and toward prosperity for all Texans is twofold.
First, the Texas Legislature and governor should just tell the truth and be more transparent in the budget process, ending the duplicitous nature of the gimmicks designed to deceive Texas taxpayers.
Once that is out of the way, the second step is simple: reduce government spending. Capping annual state and local spending growth to 3 percent or less would create ongoing annual surpluses to first permanently buy down property taxes and later the sales and business franchise taxes.
Texas government doesn’t earn money, it takes your money. The best and only way to truly limit government in Texas is to limit the money.
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