State Budget & Taxation Task Force
The Texas Conservative Coalition Research Institute’s (TCCRI) State Budget and Taxation Task force has long advocated for and supported a responsible state budget that meets the state’s growing needs without raising taxes. The centerpiece of the Task Force’s proposals for more than a decade has been strengthening the state’s limitation on spending by tethering it to growth in population and inflation. The 87th Texas Legislature adopted and passed that proposal in the form of Senate Bill 1336 (Hancock, et al. | SP: Bonnen, et al.). Two years earlier, the 86th Texas Legislature passed another Task Force priority in the form of HJR 38 (Leach, et al | SP: Fallon), which led to adoption of a state constitutional amendment prohibiting a personal income tax in Texas. Notable successes of previous State Budget and Taxation Task Forces include a 25 percent reduction in the franchise tax that was enacted by the 84th Legislature, and balancing the 2012-13 state budget without raising taxes.
The 2021-22 State Budget and Taxation Task Force will continue to monitor the economic impact of the coronavirus pandemic, both from the perspective of state expenditures and state revenue collections, but a major focus of the Task Force will be fundamental reformation of the state’s tax structure. That includes continued advocacy for eliminating the state’s franchise tax, but also to address the state’s system of ad valorem taxation, which remains one of the most burdensome in the nation. The projected surplus heading into the 88th legislative session provides an opportunity to deliver substantial tax relief, and this should be a priority for conservative legislators.
In addition to these primary areas of focus, the Task Force will also continue to develop proposals related to narrowing the permissible uses of the Economic Stabilization (Rainy Day) Fund, and reviewing the state’s economic incentive programs.
Task Force Topics:
Responsible use of unanticipated balance: Comptroller Hager’s 2022-23 Certification Revenue Estimate projects a substantial available balance. The Task Force will explore potential uses for these funds, with a focus on providing tax relief.
Economic Incentives: The Chapter 313 program is set to expire on December 31, 2022. Acknowledging the overwhelming burden that property taxes place on businesses in Texas, the Task Force will discuss the expiration of this major incentive program and consider alternative ways to ensure that the business tax climate remains strong. The Task Force will study a spectrum of reforms
Long term reforms:
Narrow uses of Rainy Day Fund
Franchise and property tax relief
Review economic incentive programs for elimination and/or reform
Enshrine the statutory spending limit based on population growth and inflation in the state constitution.