Austin at Large: Put on Your Shrinking Caps

We all remember last legislative session for its nastiness over "social issues," such as unleashing the Toilet Police on schoolkids or calling ICE on fellow lawmakers. But what really burned everyone's toast was the fight over just how much tax evasion to offer to Texas property owners. The dueling over the proper level of a local tax revenue cap – 2.5% growth year-over-year (Gov. Greg Abbott), or 4% (the Senate), or 6% (the House) – is what, speaking of burnt toast, busted up the weekly breakfast meeting between Abbott, Lt. Gov Dan Patrick, and then-House Speaker Joe Straus. In the end no attempt to "relieve" or "reform" the state's unbalanced tax system proved successful.

This year, Abbott, Patrick, and new Speaker Dennis Bonnen, along with the tax maestros in each chamber (Sen. Paul Bet­ten­court, R-Houston, and Rep. Dustin Bur­rows, R-Lubbock) wanted to make sure everyone saw how united they were behind a single cap proposal, contained in House Bill 2 – or "House Bill 2.5," they joked before the press corps. Local leaders throughout the state aren't laughing, though. A 2.5% year-on-year cap on growth in overall revenue is well below the population-plus-inflation mantra that used to be the greed caucus' gold standard for tax evasion. In other words, your local services are about to be cut.

Or are they? Two years ago, a Legislature with more Republicans than it has now was unable to adopt a higher cap than is proposed now, one that will now apply to politically popular school districts as well as less favored cities and counties. Aside from wishes and promises, details have yet to emerge on how the state will make those schools whole; nobody's even pretending to make whole the cities, counties, college and health districts, and other authorities who would be on a glide path toward fiscal crisis if HB 2 works as promised. Despite state leaders' tone of consensus and confidence, there's a lot of ground that needs covering to establish why, let alone how, we need to "relieve" or "reform" Texas taxes at all.

Fetching Numbers From the Air

The decadent red-state regime has, over its generation in power, effaced for most Texans any link between what government does and what it costs. Regardless of how, as a matter of principle, you think your taxes should be spent, the numbers in play here – whether 2.5% or 4% or 6% or the current 8% – are being fetched from the air, or pulled out of the affluent white suburban asses of the GOP faithful who are so, so, very angry indeed about their rising tax bills. Nobody knows what the "proper" tax rate is supposed to be.

And over decades of drown-it-in-the-tub miserliness championed by anti-tax tub-thumpers like Bettencourt, local government in Texas has already shed most of its fat, conserved its waste, stomped out its fraud, and atoned for its abuse. We've already reduced our level of bona fide wealth transfer to the poorer and browner parts of the state to near-crisis levels that skirt legality and morality, whether for health or education or public safety. (HB 2, interestingly, exempts jurisdictions with annual budgets below $15 million – such as rural communities and pricey exurbs where the white folks are.) We've already instituted laborious workarounds to pay for the highways GOP voters want, the flood control they demand in the wake of Harvey, and the jails into which they want their bogeymen thrown.

Goodies For Our Pleasure

Most of all, of course, we've pushed that spending down to local governments, which can't run deficits to cover their operating expenses, and which have to make payroll in part or in whole by raising property taxes. For schools, that's led to the sticker shock in the suburbs that has driven recent cries for "relief," and districts now rather routinely hold tax ratification elections (TREs) to bust through the current 8% revenue cap just to, say, pay for teachers' health care or buy computers. Unless the state plans on taking back the majority of the cost of public education – which would mean increasing state school spending by at least 50% over current levels, a lot more than is being entertained by leadership – these facts on the ground will not change with tax "reform."

Instead, we'll see more frequent TRE fights, not just at school districts but at the cities and counties. On top of the already enormous bond measures we are asked to approve (and in Austin generally do), to build the infrastructure the state hasn't even thought about funding in decades, we'll now be going to the polls to hire more cops or firefighters, or mow the grass at the parks, or reduce wait times in the court system, or what have you. In Austin those measures will often pass, because we're commies, but they'll have to be positioned as specific goodies for our pleasure, not just assent to the cost of good government.

In theory, Texas law frowns upon citizen referenda on specific programs and line items (you can't petition them onto the ballot, for example), but that's effectively what we'll have, every year or two. Because magically downsizing local government by fiat to fit into an ever-shrinking bathtub, in a growing and purpling state, is just not going to happen. It certainly wouldn't happen for very long before the Texas GOP gets finally driven from power.