Considering what works best for Texans to have the best shot to prosper, the Conservative Texas Budget Coalition’s 15 members find abundant evidence that the Texas model of low taxes, less regulation, and a sensible lawsuit climate leads the way.
For example, since the last national recession started in December 2007, Texas employs 1.4 million more people. However, after a long seven years, the rest of the nation employs 276,000 fewer people.
Clearly, Texas has been the job creation engine for the nation.
Though robust economic growth, job creation, and state tax revenue are likely to moderate from a drop in oil prices, the state’s diversified economy and pro-growth policies help block the blow lower oil prices once had in Texas. This was noted recently by the Texas Comptroller’s revenue estimates showing that the 84th Texas Legislature will likely be flush with cash this session.
To build on the success of the Texas model, the Coalition outlined the following legislative priorities at a recent press conference.
Each of these priorities is essential to limiting the footprint of government. The two that I discussed at the press conference were effectively limiting growth in the state budget and the creation of the Sales Tax Relief Fund, otherwise known as the STaR Fund.
- By limiting the 2016-17 budget to no more than the last two fiscal year’s rate of population growth plus inflation of 6.5 percent, our current estimate of what constitutes a conservative Texas budget is $217.1 billion in all funds and $142.2 billion in state funds.
This conservative budget would provide plenty of funds available for legislators to fund essential public services and provide substantial tax relief.
- From our discussions with legislators, they find it frustrating that in the current legislative process funding reduced from an ineffective program A goes to program B without a mechanism for those funds to flow in option C for tax relief.
We suggest that it’s time to end this frustration and help Texans in the process by creating an option C in the form of the STaR Fund.
By creating this mechanism this session, those dollars from program A could be transferred to the STaR Fund that would then be used by the Texas Comptroller to temporarily reduce the state’s sales tax rate. It wouldn’t be available for use until the 2017 session allowing any additional revenue available this session to fund eliminating the costly business franchise or margin tax.
The STaR Fund would provide a dual benefit of first, and foremost, slowing the growth of the budget and second temporarily reducing the state’s sales tax rate.
By implementing the Coalition’s legislative priorities, the Texas model can continue to provide opportunities for the working poor and all Texans to achieve their hopes and dreams.