About 2.5 million Texas voters recently approved 13 Constitutional Amendments. Several of the propositions involve notable and much-needed investments, while others relate to tax relief and other topics. On the same night, scores of local elections saw the passage of substantial bond packages providing billions of dollars to build and upgrade public school facilities.
The Texas Broadband Infrastructure Fund is now a reality, which will help finance high-speed access to people across the state. Voters also adopted the Texas Water Fund, which will be used to finance much-needed projects. A third major infrastructure investment relates to funding electric power generation investments, which are essential to stabilizing the grid and helping to ensure there is sufficient power during extreme conditions. An “all of the above” strategy is essential to assuring adequate power generation.
Funding for higher education through the Texas University Fund was also established, with ongoing revenues from accrued interest on the state’s Rainy Day Fund. The economic benefits of investing in and increasing the number of nationally recognized research universities in the state range from more grant funding to greater opportunities for discovery and commercialization to attracting additional top research faculty and students.
The Centennial Parks Conservation Fund will be used to increase the numbers of state parks and upgrade existing locations. Parks enhance quality of life for residents and generate tourism spending. Such amenities can also be a factor in location decisions, helping attract and retain the workers needed in the future.
On the fiscal front, property tax relief was provided in several forms, including both increased homestead exemptions and compression of school tax rates. These measures will decrease property taxes to millions of homeowners and businesses, but obviously also reduce funds to local entities (primarily schools). The property tax is the least efficient and equitable of all major levies. Reducing its relative importance is a positive development, but not without its drawbacks. In particular, while the State is using record high surplus funds to make up the difference at present, challenges could occur later if such resources are unavailable.
A tax exemption on equipment and inventory manufactured by medical or biomedical companies will enhance Texas’ competitiveness for this sector. Biosciences offer major potential for expansion in the state, with a variety of major initiatives moving forward.
Childcare facilities can now be exempt from property taxes, which will hopefully result in increased availability of these critical services. Retired teachers will receive cost-of-living adjustments to their annuities, thus enhancing the attractiveness of the essential teaching profession.
Texans overwhelmingly chose to invest in programs that will enhance economic competitiveness as well as our quality of life, with benefits that will persist for generations. It was a good night. Stay safe!