With the 88th Legislative Session set to begin in January, we are increasingly asked by taxpayers and lawmakers alike what winning looks like to Texans for Fiscal Responsibility. That is what we are going to discuss in this article.
As many subscribers know, we released our Texas Prosperity Plan this summer to lay out many of our policy goals for the upcoming legislative session. The three points in the plan that we deemed essential are Banning Taxpayer-Funded Lobbying, Eliminating Property Taxes, and Freezing our Budget Growth.
Although we would love to see all three of these accomplished, there are a number of ways that we could still have a successful session without all of them making it through the legislative process. Below are some metrics we believe would convince us that we had a successful session.
We have made no secret of our opposition to property taxes in this last year. We deem them as an immoral form of taxation that prevents Texans from ever truly owning their home due to paying perpetual rent to the government. TFR’s goal is the complete elimination of all portions of property tax; however, we do not think it is necessary to accomplish that in the upcoming legislative session to put Texas on the right path. As we have written about extensively, we believe the low-hanging fruit of this legislative session is the Maintenance & Operations (M&O) portion of the property tax. In September, Texas Governor Greg Abbott announced his goal to eliminate this portion of the property tax so that Texans can actually own their homes. We think that is a realistic metric of success. We believe that the most important policy victory we can have in the realm of property tax reform is a path toward M&O elimination.
There are a number of ways this could be accomplished, and we likely would support any legislation that seeks to do so. Ultimately, M&O is about 40-50% of most people’s property tax bill, and moving M&O to be funded out of state general revenue would give Texans significant property tax relief and make the way we fund schools more efficient. There are a number of other property tax reforms we would support as well, including appraisal reform and immediate property tax relief in whatever form it takes. However, if history is any guide, the Texas Legislature typically gives us the bare minimum of what they think they can get re-elected with, and that is simply not good enough to declare a victory. We desperately need significant property tax reform giving Texans lasting relief, rather than a temporary patch that gets politicians through the next election cycle.
The Texas Budget
Recently, the Legislative Budget Board (LBB) released its constitutional spending cap of 12.3% growth. This is an extremely high number and is mostly a result of the historic levels of inflation caused by bad monetary policy from both the Federal Reserve and the bad energy and fiscal policies of the Biden administration. As we enter into a significant economic downturn, the wisest fiscal advice is always to tighten the belt, cut spending, and brace for a rough few years. From a budgetary standpoint, this means we need to shrink the size of our government, and this is done through how taxpayers fund the agencies and programs that make up our government.
Recently, Texas Lieutenant Governor Dan Patrick shocked conservatives by announcing we had an “extraordinary opportunity, unlike we have never had before, to chart the future of the state of Texas and create a vision.” Although this was a great sound bite, what he suggested was spending every cent we can by growing the government massively. He suggested a meager increase in the homestead exemption for property taxes, more subsidies for natural gas, and other fiscally irresponsible policies. The position of TFR is that government is already too big; every politician that calls themselves a “conservative” would agree with that statement. The problem is that most of them do not vote according to that principle. Time and time again, they vote for bigger, bloated budgets.
It is now more important than ever that Texas show fiscal restraint. We realize our goal of freezing the budget at 2022-2023 levels is a lofty one, but the reality is that if the government is too large, it needs to reduce its size. TFR is only asking that we don’t grow the scope of government anymore, but this is still seen as a radical stance. We believe if the government is too large, then at the bare minimum, it should not grow at all. It is worth reminding taxpayers that a budget surplus represents an over-collection of tax dollars. TFR would deem it a success if lawmakers would freeze the budget at 2022-2023 levels in order to proactively stop the growth of government.
Banning the practice of taxpayer-funded lobbying is one of the most supported policies in Texas, spanning both major political parties. In 2020, the ballot proposal on the Republican primary ballot passed by nearly 95%. This means that nearly every primary voter in the majority party in Texas wants the immoral practice to end. Using taxpayer money to hire lobbyists who then advocate against taxpayers is unethical and unnecessary. Local officials have every right to go down to Austin to petition state government, yet they would rather use YOUR money to hire corporate lobbyists to do their bidding.
Last session’s efforts ultimately fell short when Republican State Rep. Chris Paddie (Marshall) ended the legislative prospects of his own bill by delaying the bill past the end of the legislative session. TFR Taxpayer Champion and incoming Republican State Sen. Mayes Middleton (Wallisville) has already filed another bill seeking to ban the practice in this upcoming legislative session. There is a real chance to end this practice this session, and it would be another metric of a successful legislative session.
TFR has also written extensively about the soon-to-be-concluded Chapter 313 tax abatement program. Chapter 313 tax abatements make up about $11 billion in property tax subsidies for corporations, ultimately stealing money from homeowners and giving it to wealthy corporations.
In the last legislative session, this corrupt program failed to renew and is slated to be terminated at the end of this year. However, Texas House Speaker Dade Phelan has publicly stated that it is his goal to revive the largest corporate welfare program in Texas in a different form.
In the upcoming legislative session, we want to see conservatives stand up against efforts to renew this corrupt program. We oppose all corporate welfare in any of its forms. Efforts to renew 313s must be opposed and prevented from happening. Successfully defending against new bad policy would be a major victory. We need to keep this corporate welfare program where it belongs, dead and 6 feet underground.
Local Government Spending
Many people do not realize that Texas has some of the highest local debt in the nation. If Texas was forced to pay for its liabilities, we would be insolvent. There are a lot of reasons for this, but one of the most obvious is that local governments have no constitutional spending caps. The state government does, however, and it is a wonderful mechanism to limit how big government grows every biennium. We propose that local governments be given the exact same metric as the state, limiting their budget growth to that of the increase in population and inflation. This would not solve the problems in local governments, but it would be a massive first step in the right direction.
Many more reforms are needed at the local level, but we believe placing a spending cap on all local governments would be a decisive victory for Texas taxpayers.
There are literally hundreds of reforms that we will be supporting in the upcoming legislative session. As a general rule of thumb, we will always support any policy that lowers taxes or limits the size and scope of the government. The above issues are what TFR is comfortable hanging its hat on to declare the legislative session a success. With the help of our subscribers, our demands for property tax reform have been echoed at the highest levels of state government.
With your help, we can declare victory at the end of the legislative session by forcing lawmakers to do the right thing. Because victory is achieved not only by electing good guys, but also by forcing bad guys to do the right thing. This is only accomplished with the effective engagement of taxpayers with legislators. TFR will be here to keep taxpayers up to date with news from the Texas Capitol as a voice of reason and fiscal restraint for all Texans. Together, we can be victorious!