September 1 marked the first day of Texas’ fiscal year (FY) 2016. The budget reset and 678 new laws took effect. Texas Comptroller Glenn Hegar will soon provide detailed information about the revenue collected during FY 2015.
I was on KEYE News yesterday discussing the end of multiple Texas taxes and the end of the Emerging Technology Fund (ETF) that was simply corporate welfare. These measures and others make yesterday a good day for all Texans.
There’s been some concern about tax revenue given lower oil prices. Comptroller Hegar noted in a Wall Street Journal commentary this week that oil production tax revenue of nearly $2.9 billion was above what his office estimated of almost $2.8 billion for FY 2015 despite lower than projected oil prices. Oil production tax revenue is dependent on the quantity of oil produced, which is up about 200 thousand barrels per day at 3.46 million through June 2015 (latest data available) than August 2014. This will be an area to watch as oil prices may remain low for an extended period.
Entering the 84th Legislative Session, Comptroller Hegar had a goal of repealing nine state taxes. He aimed to remove outdated statutes, reduce administrative burdens, and provide tax relief. Fortunately for taxpayers, the Legislature eliminated several of these taxes that contributed to the historic $4 billion tax and fee relief package. This package was dominated by property tax relief that will be on the November ballot for voters to decide and a permanent cut to the business franchise tax that will start on January 1, 2016.
Several taxes that were eliminated on September 1 include the Inheritance Tax, Oil Regulation Tax, Sulphur Regulation Tax, Fireworks Tax, Controlled Substance Tax Certificates, and the Airline/Passenger Train Beverage Tax. These six taxes provide savings of $18.3 million that will now remain in the productive private sector, boosting opportunities to prosper, and remove headaches along the way.
Ending the ETF that assisted startup companies statewide by purchasing a share of the company in many cases is a great step in the right direction for Texas. Government ownership of the means of capital is the definition of Socialism, an economic system that has repeatedly failed. Texas should continue to avoid this sort of activity as it ended the ETF and should work towards eliminating the Texas Enterprise Fund.
The evidence is clear that the Texas model of low taxes, no individual income tax, less regulation, and a good lawsuit climate promotes economic prosperity and individual liberty. For example, Texas’ unemployment rate has now been at or below the U.S. average for an incredible 103 consecutive months. Expanding on these proven attributes should be the goal to give Texas families and entrepreneurs the best opportunity to succeed.