Austin – Leaders of at least sixteen diverse statewide organizations gathered in Austin today to announce their unanimous support for the Texas Legislature to return at least one-half of the budget surplus to the taxpayers this legislative session as Governor Bush proposed at the beginning of the session. The leaders supported a joint resolution calling for across the board direct tax cuts and property tax relief and will be intensifying their communication and lobbying efforts with the legislature over the coming weeks. Organizations represented include the American Family Association, Christian Coalition, Citizens Against Government Waste, Free Enterprise PAC, Free Market Foundation, Institute for Budget and Tax Limitation, Lone Star Foundation, National Federation of Independent Business, Small Business United of Texas, Texans for Tax Limits, Texas Association of Business and Chambers of Commerce, Texas Citizens for a Sound Economy, Texas Conservative Coalition, Texas Family Research Center, Texas Justice Foundation, and the Texas Public Policy Foundation.

“We don’t want significant tax cuts to get lost in the debate this session,” said Bill Hammond, President of the Texas Association of Business and Chambers of Commerce.

Organization members also pointed out that any increased spending this session will not only increase the growth of government now but also the rate of government growth in future years. “We feel it is fiscally irresponsible to increase spending and expand government this session because it puts Texas on a glide path of government growth that must be paid for in future years when we may not be so flush with cash. This will lead to having to raise taxes or cut programs. Will members be willing to cut spending on these programs when Texas runs a deficit?” said Jeff Judson, President of the Texas Public Policy Foundation.

Governor George W. Bush unveiled a spending plan in January which called for tax cuts in the amount of $2.6 billion — roughly one half of the surplus. In his State of the State address, the Governor said that “budget surpluses are not a license for wasteful spending.” While each spending program proposed by the legislature certainly has its merits, the combined effect of increasing government by up to 15% in one biennium will lead to negative fiscal consequences in future years.

On the other hand, econometric simulations of tax cut proposals show that each $1 billion in biennial sales tax cuts creates over 27,000 new jobs and $2.25 billion in new capital formation, and that each $1 billion in biennial property tax cuts creates over 17,000 new jobs and $2.17 billion in new capital formation.

“Whether the legislature chooses to give taxes back to the people through a sales or property tax cut, we want to see at least one-half of the surplus return to private hands for private decisions about what is best for our future,” said C.A. Stubbs, Texas State Chairman of Citizens Against Government Waste.

JOINT RESOLUTION FOR TAX CUTS

The following statement was unanimously approved by the undersigned statewide organizations for release today:

Whereas,  Texas citizens have been overcharged at least $5.4 billion in taxes represented in the current surplus, and Whereas,  Governor Bush rightly proposed to give roughly one-half ($2.6 billion) back to the taxpayers in the form of tax cuts, and Whereas,  many in the legislature appear to have a proclivity to spend this surplus rather than return it to the taxpayers, and Whereas,  any increased spending this session will not only increase the growth of government now but also the rate of government growth in future years, and Whereas,  spending the surplus will put Texas on a glide path of government growth that must be paid for in future years when the state may not have a surplus of funds (thus leading to tax hikes or program cuts), and Whereas,  surplus funds returned in the form of tax cuts would preclude any expansion or creation of new government programs, and Whereas,  citizens’ and businesses’ private decisions about how to spend their money is better for the economy, for business, for families, and for individual liberty than increasing government spending, and Whereas,  each $1 billion in biennial sales tax cuts creates over 27,000 new jobs and $2.25 billion in new capital formation, and Whereas,  each $1 billion in biennial property tax cuts creates over 17, 000 new jobs and $2.17 billion in new capital formation.

 

Therefore, we call upon the legislature and the Governor to return at least one-half of the surplus in the form of across the board direct tax cuts and property tax relief to Texas citizens this legislative session.

Loralei Gilliam, American Family Association

Chuck Anderson, Christian Coalition

C.A. Stubbs, Citizens Against Government Waste

Albert Cheng, Free Enterprise PAC

Kelly Shackelford, Free Market Foundation

David Hartman, Institute for Budget and Tax Limitation

Jim Cardle, Lone Star Foundation

Robert Howden, National Federation of Independent Business

David Pinkus, Small Business United of Texas

Austen Furse, Texans for Tax Limits

Bill Hammond, Texas Association of Business and Chambers of Commerce

Peggy Venable, Texas Citizens for a Sound Economy

Kathy Seay, Texas Conservative Coalition