For the Texas Legislature, having too much money to spend may turn out to be as big a challenge as not having enough.
Lawmakers returning to Austin on Tuesday, Jan. 10, were greeted with Comptroller Glenn Hegar’s assessment that they have a surplus of $32.7 billion. Under state law, some goes to the “rainy day fund” and some to highway projects. But about two-thirds is available for spending.
Of course, there are myriad demands, including calls to spend little at all, except on tax cuts. And there are procedural and political hurdles. Nonetheless, the surplus is a tremendous opportunity to set Texas’ course for the future by addressing some longstanding problems and boosting the infrastructure needed to maximize the potential of a booming state.
Lt. Gov. Dan Patrick and House Speaker Dade Phelan have both talked about the rare opportunity the surplus affords lawmakers. They’ll differ on the details, but they and Gov. Greg Abbott must keep their eyes on the goal: improving opportunity and prosperity for all Texans.
TEXAS HOMEOWNERS NEED MAJOR PROPERTY TAX BREAK
Tax cuts are a must. A surplus is at some level a sign of over-taxation, and returning to the people some of their own money is the right thing to do.
At the state level, revenues are collected primarily through the sales tax and levies on oil and gas drilling. Some will argue for some kind of sales tax rebate, but by focusing on local property tax cuts, legislators can address two related problems. Housing affordability is one; it’s becoming a serious cost-of-living issue, as booming appraisals drive higher tax bills.
And by increasing its share of school funding, the state can require that school districts, which charge the largest portion of local property taxes, significantly reduce their rates. This represents a greater state commitment to public education, which is appropriate. It must be sustained in the future, when surpluses might not be available, so it’s important to be prudent and not overreach.
As he was re-elected House speaker, Phelan, a Beaumont-area Republican, also mentioned the need for a longer-term fix on property taxes. “Time and time again, we have seen the Legislature provide some form of property tax relief, but to make it lasting, we must do something about runaway appraisals,” he said. Here’s hoping he forces a serious examination of the issue.
SPEND MORE ON TEXAS SCHOOLS, TEACHERS
Significant tax cuts should still leave lawmakers with chances to make important investments in Texas’ future. Education is the highest priority. Texas schools are not performing well, and it’s time for a serious conversation on what it will take to fix it. Money isn’t the only answer. But good teachers are one of the most important factors, as is keeping them with pay raises, better benefits and more resources to do their jobs.
Republican leaders are making a big push for school choice, including letting parents use state money to enroll students in private schools. Competition is important for improvement, and a sizable experiment in school choice is overdue. But it can’t come at the expense of public schools. Lawmakers must craft a targeted program that gives families more and better options but preserves resources to improve the very schools and systems that are failing them.
In higher education, university leaders are agitating for a budget boost and promising tuition freezes in return. That’s a good trade-off, but as with public schools, it can’t come at the expense of reform that helps more students avoid high costs and debt in the first place.
One of the most exciting developments in higher education is the Texas A&M University System’s commitment to a major expansion in downtown Fort Worth. The city and county are stepping up with resources, and the state should, too.
To ensure Texas is economically resilient amid its robust growth, the Legislature must ensure the lights stay on. Leaders differ on whether enough has been done to fix the power grid since the 2021 winter freeze, but one fact remains: Texas needs more power capacity as people and companies move here. Ideally, the market will adjust through private investment, but this is a task that cannot be left to chance. Patrick has said the state needs more natural gas-powered electric plants.
MENTAL HEALTH TREATMENT AND CPS REFORM
The surplus also provides an opportunity to address two lingering areas of shame for Texas: mental-health services and child protection. These are also areas where money isn’t the sole answer.
The state’s inadequate capacity for mental-health treatment is well-documented, but here’s one example. A shortage of hospital beds means local jails sometimes have to keep prisoners who should be taken to state facilities. Local taxpayers are funding their care in just about the least efficient manner possible. Child Protective Services and foster care seem to be in a perpetual cycle of crisis and reform. But good investigators and caseworkers are crucial to preventing child abuse and providing better homes for children, and that means more of them, making better salaries.
There are other priorities. And there will be distractions, such as the political fight over lawmakers busting the state constitution’s cap on how much spending can increase. Voting to do so can be politically fraught, especially in Republican primaries, but it may be the only way to provide meaningful tax relief and address needs.
Legislative leaders recognize the opportunities before them to build a better Texas. Now, they need to demonstrate the resolve and courage to take advantage.
>> Fort Worth Star-Telegram
