The closing week of the Texas Legislature is like nothing else on the planet.
AUSTIN Texas (Texas Insider Report) This has been an incredibly workman-like Session. Its been a very productive Session. It hasnt made for much good press because there hasnt been that much controversy but members have been working together on their priorities and theyre getting things done said Dale Craymer president of the Texas Taxpayer & Research Association and one of the states top Tax & Budget Policy experts.
The truth of the matter is theres only one bill that the legislature really has to pass and thats the State Budget other than the budget everything else is poetry Craymer tells Texas Insiders Jim Cardle on Austins Right Choice Talk 1370 Texas Insider Radio program.
But the good news is theres an awful lot of poetry this session thats going to be good for Texas citizens.
So lets talk about those things because the closing week of the Texas Legislature is like nothing else you can experience on the planet said Craymer.
Said Craymer:
Were on the verge of putting together a pretty strong and conservative budget this session.
The interesting thing is you hear all these numbers thrown out and about that legislators are passing a 16 spending increase but I dont get wrapped up in those numbers because weve got a lot of one time expenditures that were addressing this session.
Those one-time expenditures shouldnt be included when people are talking about some percentage of increase in spending. Thats why theyre called one-time expenditures Craymer said.
About $5 billion dollars for instance are going to be used for Hurricane Harvey repair or recovery and that includes some absolutely necessary infrastructure investments which is money we wouldnt be spending if we hadnt suffered through an incredible disaster especially in our coastal areas.
Weve got to address that. Itd be fiscally irresponsible for the long-run in fact if we didnt address it and it wouldnt be serving the people of Texas if legislators didnt do that. But thats one time money for an unusual and one-time calamity.
Weve got the money on hand its in the Rainy Day Fund for heavens sake were not raising taxes to do it and it would be irresponsible not to protect our coastal resident from the threats that they face.
In addition were going to spend about $1 billion on the Teachers and the State Employees Retirement Systems thatre at risk which could become fiscally insolvent if legislators dont do something about it.
Those pensions are at risk today because theyve been underfunded in the past. So its absolutely necessary that we protect our pension funds and the good news is that when you read about these other pension disasters across the U.S. in Detroit in California Illinois were no where near as bad as they are yet but if we dont do something about this now were going to be near that type of situation Craymer said.
Then also and interestingly youve got the way our state property tax system works
In order to reduce local property taxes the state has to spend more and actually send that money to the school districts. Theyre talking about somewhere between $3-to-$5 billion dollars of increased state spending but that translates into lower property taxes at the local level.
That moneys going to be used to constrain future tax growth and thats a good thing. Do I get upset that the states spending $5 billion more if its going to save me $5 billion in property taxes? Absolutely not! But thats sometimes viewed as being increased spending when its really only a mechanical difference because those tax cuts then at your local level have really emanated from Austin.
And thats why youve got House Bill 3 the School Bill thats going to dot the is and cross the ts to determine how much of that goes to property tax relief how much goes into the classroom or to teacher pay but Im an economist. The fact is were in the middle of one of the tightest labor markets in history and were going to be losing teachers if we dont pay them more. And we want the best teachers possible to be teaching our kids.
But the good news and the reality is the money were spending is money we already have in hand. Nobodys raising taxes and were able to get ahead of these needs without raising taxes because of the strong economy which is directly related to the fact that the legislature and the governor have been prudent steward of our money in the past.
Im gonna ask you a Trivia Question: When was the last time the state raised taxes?
The last tax increase we had was in 1990 when Bill Clements was governor and he bumped up the sales tax a quarter of a percent in order to address issues in our school finance system.
Thats 29 years! No other state has gone that long without a major tax increase.
So it can and should be said that the budget this legislature is passing is a continuation of years of conservative budgets Craymer said.
