Everywhere one stops to discuss the Texas legislative session now well underway in Austin, the conversation almost immediately turns to the state’s enormous projected budget surplus and what to do with it. The Texas Taxpayers and Research Association (TTARA) has called it “a once in history cash bonanza” and it’s hard to find a better description. Based on the analysis from the TTARA of data from the State Comptroller of Public Accounts and after accounting for almost identical spending bills from both House and Senate totaling $130 billion, there will be an unobligated excess of over $42 billion for the next biennium, truly a once in a lifetime event. And as has been noted by these authorities, that number doesn’t include the state’s “rainy day fund” that is fully funded under current law at $27 billion, which means that the projected surplus is available for one-time strategic investment. So how should it be invested?
As you can imagine, proponents of every major project from every corner of the state are lining up for presentations on the merits of their particular pleading, and I can think of many such needs and opportunities that are worthy—from education to pension funding to various infrastructure needs to health care and on and on—but for me they all are secondary to what I believe is the one use that best addresses and invests in our state’s human resources—a major tax refund and tax cuts for individuals and business. After all, it’s their money, and I believe that millions of taxpayers acting independently are better suited to productively employ this one-time bonanza than most of the experts that will be called upon to advise the legislators.
What do you think?
Give it to the taxpayers.
Build a wall on our side of the entire border along with Arizona as soon as possible so it cannot be removed except by the US military if a real USA border is constructed.
Ken
Jim, your logic is inescapable. 30 million Texans would better decide on THEIR priorities than the 180 people in Austin although THEY would do it so much better than any other state. One could consider it a form of voting with their own money.
Build a wall and refund the rest.
Fully fund all state pension plans including teachers pension, protect the border, and return the rest to the taxpayers.
Put the money in 1, 2, and 3 year treasury bills and notes giving currently an average yield over 4% and then spend some time THINKING about the proper course. Many of the projects from education, to pensions, to giving it out could then be considered out of the heat of the moment.
Jim; If my math is correct and the excess over expenditures is $42Billion, that is approximately a 30% surplus. If this is correct, the legislature (elected by the people) should reduce taxes by at least 14% to 20% and remain well within the boundaries of sound fiscal responsibility. This would give virtually all citizens (who elected these representatives) a certain amount of financial relief. Additionally, this excess could be invested in Treasury Bills and Notes out to 2 years well in excess of 4.00% which would add additional income to the state coffers and possibly reducing further tax obligations of the citizenry. Of course, now we are speaking of common sense and politicians in the same breath, which could be construed as an oxymoron.
We have owned a furniture store for 30 years. We pay income tax and social security tax on salaries taken. We pay property tax on our commercial building and our home. We like most people pay income tax.
IN Texas we pay franchise tax for the sales we manage to make and we pay inventory tax every year for the furniture we are trying to sell even if it was on the floor the previous year. We pay inventory tax on our equipment and even furniture on trucks coming to our store before year end. Inventory tax is 2.5% -and it is a significant financial number. Texas is one of a very few states that penalize small business with inventory tax and franchise tax. In reality these are hidden sales taxes to the consumer. These should be done away with.
Just a thought: high quality teachers abandon their calling for better paying jobs. Is there a merit system to use some of this excess to encourage the best educators to return?
Good thinking, Ann. Actually we once had a performance-based incentive compensation plan for teachers in Houston, called “value-added”, and it worked very well for several years in terms of student performance growth and enhancement of compensation for good teachers. But the union didn’t like it and the superintendent moved on, and his successor pulled the plug on the plan.
It’s really very simple. Property tax refund to the homeowners (homesteads only), farmers and ranchers (ag exempt only) in Texas. No multi-family or business for profit property tax refund or business tax refund. Legislature and execs have promised ad valorem tax relief since Danny Patrick took his first bus trip to Austin before he and Bettencourt ever ran for office.