at the Transportation Advocacy Group in Houston, Phelan indicated he is focused on using the surplus to fund infrastructure and keeping up with the higher cost of government. “I know there’s a lot of politicians who are going around saying we need to go around spending half this revenue” on property tax relief, Phelan said. “No one is even considering how much more expensive it’s going to be to run the government next cycle.
To complicate matters further, in 1978, Texans voted to amend the Texas Constitution to limit state spending growth every two-year budget cycle to the rate of the state’s economic growth. There are various ways to measure that, but the Legislative Budget Board recently set the limit at 12.3%. This would allow spending growth for the upcoming biennium of about $12.5 billion — almost all of which would be spent on growing government.
First, our state and legislative leaders call for increased spending that will use up most of $12.5 billion. Second, they use the spending limit as an excuse to avoid reducing property taxes by characterizing property tax cuts as spending. Yes, it would be dangerous from a conservative perspective to bust the spending cap for more spending. But it is disingenuous to play on conservatives’ fears by pretending that property tax cuts are equivalent to state spending.
One, use 90% of current and future budget surpluses to replace school property taxes with state revenue to increase state funding of schools to 100% of the total. This reallocation is a no-brainer since the state already pays for 45% of our schools. We can do this replacement within existing school funding formulas, which already control the flow of state and local funds.
Source: Real Estate Daily Report (realestatedailyreport.net)
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