Lawmakers in both chambers passed bloated state budgets that—despite a record $10 billion surplus—somehow failed to reduce school property taxes. Instead, they spent most of it growing government.
But there’s still time to alter course, as budget conferees have yet to negotiate final terms. The House should follow the Senate’s lead—by using the upper chamber’s less-bloated budget as a template—and support the additional tax relief the Senate recently added to House Bill 3.
While the Senate’s budget was bloated, it wasn’t as bad as the House version. Interestingly, even using the Senate’s budget and their added tax relief, the House could keep what they value the most: a $6.3 billion education spending spree.
Property tax reductions have not yet passed the House, which Gov. Abbott has acknowledged publicly. His 2.5 percent limit on school tax increases combined with the House’s $2.7 billion in “relief” would not actually reduce the average Texan’s property tax bill.
Yes. We already plan to spend $2.7 billion per year to reduce property taxes. Without more though that reduction will be eroded by rising property values & the 2.5% tax rate increase allowed by SB 2. Dedicating sales tax makes property tax reduction greater & lasting. #txlege https://t.co/IAw0GkXP9G
— Greg Abbott (@GregAbbott_TX) May 5, 2019
In two years, if lawmakers stick to the measly $2.7 billion, your property tax bill will still be higher than ever before.
The solution? Follow the Senate’s lead, again; it upped the relief in House Bill 3 by redirecting existing revenue. According to State Sen. Paul Bettencourt, relief increased from $2.7 billion to roughly $5.7 billion, enough to buy down or “compress” school tax rates 10 cents rather than just 4 cents.
The 10 cent compression would be enough to offset appraisal growth and reduce what homeowners pay in school taxes.
Since the Senate redirected current revenue streams to “pay” for relief, the House’s $6.3 billion education spending spree was preserved, including a teacher pay raise. But with no spending concessions, lawmakers still have the problem of growing government at a reckless pace.
According to Vance Ginn from the Texas Public Policy Foundation, the Senate budget is still $2.3 billion above the Conservative Texas Budget limit. That excess is about 1 percent over the CTB limit. Passing a CTB would limit budget growth to the increase in population and inflation, which lawmakers agreed to in 2015 and 2017.
The path to cut property taxes for every Texan is clear: The House should follow the Senate by using the upper chamber’s budget as a starting point, find 1 percent in cuts in order to adopt a CTB, and agree to at least $5.7 billion in tax relief.
Of course, they could always do more. The Republican majority all campaigned on cutting spending, not growing it less slowly than the Democrats.
But blowing through a record $10 billion surplus—while failing to reduce property taxes or eliminate Robin Hood—is a terrible re-election pitch. Unless the House changes course, those are the “results” they’ll be running on in 2020.