The root causes of our property tax and school funding crisis are three consequential decisions that blew huge holes in state and school funding. First, in 1991, we froze the motor fuel tax at $0.20 per gallon. The resulting annual structural deficit is $4 billion today...
Second, in 1997, we opened a massive loophole in the property tax law allowing owners of large commercial and industrial properties to cheat the system by $5 billion per year...
Third, in 2006, we designed a new business margin tax that caused a $6 billion structural deficit (per then Texas Comptroller Strayhorn). In all, we’ve created $15 billion per year in structural deficits...
After blowing massive holes in our revenue systems, the state went on a borrowing binge to make ends meet. The first $8.4 billion per year raised by the state and school districts goes to service this debt. That's a MOUNTAIN of debt…
More ominously, the Texas Legislature will face a huge Day 1 deficit (approximately $5 billion) when it convenes in January 2019. The #txlege had to pull an Enron-style accounting gimmick (an unlawful one in my opinion) in order to close the books at the end of the last session.
Even WORSE (can it get any worse?), the Texas legislature dramatically underfunded retirement plans. The fund deficits are more than $50 billion. The lege will almost certainly face another “fund it or cut it” decision regarding teacher retirement!
Our state’s finances are a complete mess. Fiscal irresponsibility is too kind a word. It's fiscal gross negligence. The State Auditor resigned 3 years ago and hasn't been replaced. Last week, the top official of the Legislative Budget Board, Ursala Parks, resigned abruptly.
