80th Legislature: HB2 Passed By House (Second Reading); Tax Cuts Given Priority Above And Beyond Human Needs

The Texas House of Representatives today passed HB 2, the appropriations bill to fund bogus property tax cuts for school property taxes promised by the Legislature in last year’s special session.
First off, HB 2 put property tax cuts on a level above everything else, including actual educational spending. In addittion, it made it out of committee too quickly without adequate debate concerning whether the cost of the massive property tax is,  in fact, in fact, worth the costs associated with it.

Combined with SCR 20, which the House will consider on Tuesday (along with HB 2 on third reading), HB2 busts the spending cap utilizing funds from General Revenue to fund the property tax cuts. Further, it takes General Revenue funds that should be rightfully spent on other more paramount state needs and uses them to fund property tax cuts that won’t even make a significant annual dent in the average taxpayer’s bill.

The non-partisan Legislative Study Group summed it up best, noting:

HB 2 is bad public policy because it uses money for other state priorities to pay for an under funded tax cut.  An inadequate amount of revenue has been raised by the tax package that was passed during the 3rd Called Special Session of the 79th Legislature. Only $8.1 billion is available in the property tax fund to pay for the $14.2 billion needed to buy down local school maintenance-and-operations (M&O) tax rates from $1.50 per $100 of property valuation to $1.00.
HB 2 spends $6.1 billion in current General Revenue to make up the amount lacking on tax cuts before the Legislature has the opportunity to review and debate the state budget.  According to estimates from the Center for Public Policy Priorities, the $8.1 billion in the Property Tax Relief Fund would only buy down property taxes to $1.20 for the coming biennium instead of $1.00.

To fund the property tax cuts for 2008, HB 2 spends $4,231,466,000 from the Property Tax Relief Fund and an additional $2,724,934,000 from General Revenue.  For 2009, HB 2 spends $3,846,492,000 from the Property Tax Relief Fund and $3,846,492,000 from General Revenue.
Budget decisions, including property tax cuts, for the 2008-2009 biennium should be made in the General Appropriations Act, HB 1, where all spending priorities can be debated side by side so that members can make a more informed decision.

That last senence there is particularly important, because it goes to the heart of the matter: The Republican leadership in this legislature put the property tax cut above all else. They put it above healthcare spending, education spending, any spending. Rather than putting it in the General Appropriations act where it could be prioritized in relation to more “human” needs like education and healthcare or CHIP, they separated it.

Why? Partially, so it wouldn’t be reduced when it is actually put side-by-side with real, human needs. Clearly, fully funding CHIP, healthcare and education are more important than a fairly insignificant property tax. But, the anti-tax Republicans who push and push the concept of “tax relief” above all others cannot be seen watering it down. Thus, this is how it ends, at least for now.

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