Governor Greg Abbott stated in his State of the State speech that he would veto a budget that didn’t include business tax relief. He called for a $4.5 billion tax relief package that included $2 billion in business margin tax cuts, $2.2 billion in local property tax relief, and another $268 million for ending taxes and fees. This set the tone for the Texas Senate and House tax relief proposals.
Behind Lieutenant Governor Dan Patrick and Senate Finance Committee Chair Jane Nelson, the Senate set the stage by passing out of the chamber a $4.63 billion package consisting of $2.48 billion in margin tax relief and $2.15 billion in property tax cuts.
Recently, Ways and Means Committee Chairman Dennis Bonnen outlined the House’s roughly $4.87 billion tax package with $2.56 billion in margin tax cuts and $2.31 billion in state sales tax relief.
Table 1 presents a comparison of these tax relief packages including the Foundation’s recommendations.
Table 1: Positive Discussions Continue in Austin Over Historic State Tax Relief for Texans
The Foundation’s recommendations are based on our research finding repealing the margin tax would provide the largest economic stimulus and putting a permanent constraint on excessive local property taxes by calling an election for local voters to approve any revenue increases above a certain threshold.
It’s terrific that at this stage of the budget process state officials are discussing how much to return to taxpayers where it belongs relative to how much more they can spend.