1 00:00:08,800 --> 00:00:14,919 This week's trip cast is sponsored by BNSF Railway. At BNSF we keep our 2 00:00:15,000 --> 00:00:19,239 orange house screen. In fact, we are committed to a thirty percent reduction 3 00:00:19,239 --> 00:00:24,760 in greenhouse gas emissions by twenty thirty. For more info, visit BNSF dot 4 00:00:24,760 --> 00:00:31,440 com and Meadows Mental Health Policy Institute. Register for a free collaborative problem solving 5 00:00:31,480 --> 00:00:36,640 training from Think Kids and Meadows Mental Health Policy Institute. Find out more at 6 00:00:36,880 --> 00:00:53,399 MMHPI dot org. Sense Well, Hello, and welcome to the Texas Tribune 7 00:00:53,439 --> 00:00:56,759 trip Cast for Friday, June second, twenty twenty three. My name is 8 00:00:56,799 --> 00:01:00,119 Matthew Watkins, Managing editor of News and Politics for the trip, and today 9 00:01:00,159 --> 00:01:06,680 we're going to talk again about property taxes. Lamreaker started out this year promising 10 00:01:06,719 --> 00:01:11,400 the biggest property tax cut in Texas history, but when the legislative session came 11 00:01:11,439 --> 00:01:14,400 to an end on Monday, the Republican leadership in the state couldn't come to 12 00:01:14,439 --> 00:01:18,480 agreement on how to do that, and the fighting this week has only intensified 13 00:01:18,799 --> 00:01:23,959 as the first week of a special session in which property taxes are the headline, 14 00:01:23,000 --> 00:01:26,799 got under way. There's three main players in this debate, the governor, 15 00:01:26,840 --> 00:01:30,680 the Lieutenant Governor, and the House Speaker, the Big Three, if 16 00:01:30,680 --> 00:01:33,599 you will, but you might add a fourth to that list. The Texas 17 00:01:33,640 --> 00:01:38,560 Public Policy Foundation, a conservative think tank based down the street from the Capitol 18 00:01:38,560 --> 00:01:42,920 on Congress Avenue. It was at a TPPF event on Tuesday that Lieutenant Governor 19 00:01:42,000 --> 00:01:47,239 Dan Patrick, you know, really kind of blasted House Speaker Dad Feeland's approach 20 00:01:47,280 --> 00:01:51,319 to running the House to the session and seemed to kind of insinuate that Feeland's 21 00:01:51,400 --> 00:01:56,599 plan of pushing the tax cut would kind of benefit benefit his real estate trust 22 00:01:56,599 --> 00:02:01,680 that bears his name. Meanwhile, Governor Greg Abbott essentially in doors TPFs TPFs 23 00:02:01,760 --> 00:02:07,840 short and long term property tax plans, urging lawmakers to adapt them, and 24 00:02:07,920 --> 00:02:12,520 Habit made his own appearance at TPPF on Friday, declaring that he wants to 25 00:02:12,520 --> 00:02:19,199 eliminate property taxes in Texas altogether. Joining us here to discuss these developments is 26 00:02:19,319 --> 00:02:24,199 James Quintero, the policy director for Texas Public Policy Foundation's Government for the People 27 00:02:24,240 --> 00:02:29,639 initiative Tax policy one of his key areas of study. And if you've been 28 00:02:29,680 --> 00:02:32,560 following this fight over Twitter, you've seen the governor and Lieutenant Governor quoting his 29 00:02:32,639 --> 00:02:37,800 tweets and in some cases arguing about them as well. Hey, James, 30 00:02:37,800 --> 00:02:40,280 thanks for joining us. Matthew, thanks for having me on. Yeah, 31 00:02:40,400 --> 00:02:44,879 we're really glad to have you. Also joining us in this conversation is Karen 32 00:02:44,919 --> 00:02:46,879 Brooks Harper, who has been covering the budget this session, and we'll be 33 00:02:46,919 --> 00:02:52,680 watching this kind of play out over the following week as lawmakers try to come 34 00:02:52,840 --> 00:02:54,759 to a deal on this. Hey Karen, Hey, Matthew, and James. 35 00:02:54,759 --> 00:02:58,599 Good to see you guys. Yeah, thanks for joining us. All 36 00:02:58,680 --> 00:03:00,400 right, so I want to just kind of set the table at the beginning. 37 00:03:00,759 --> 00:03:04,919 As I mentioned, the Big Three are in agreement that they want to 38 00:03:04,960 --> 00:03:08,479 cut property taxes, and they've agreed to spend around seventeen billion dollars to do 39 00:03:08,520 --> 00:03:13,400 it over the next two years. Some of that will pay for cuts made 40 00:03:13,400 --> 00:03:15,120 in prior sessions, but a big chunk of it, more than twelve billion, 41 00:03:15,159 --> 00:03:19,719 will go towards new cuts. This much we know, but we don't 42 00:03:19,719 --> 00:03:23,639 know yet is how those cuts will work. And there's basically, over the 43 00:03:23,680 --> 00:03:27,879 course of this debate, been three proposals out there. The first one I'll 44 00:03:27,879 --> 00:03:30,360 mention I don't think we need to spend a lot of time on is the 45 00:03:30,439 --> 00:03:34,479 date Feeling plan, which included, you know, spending state money to lower 46 00:03:34,479 --> 00:03:38,719 down taxes, but also to lower the appraisal cap, basically limiting how much 47 00:03:38,759 --> 00:03:44,199 your property could grow to the taxable value of it could grow it at least 48 00:03:44,400 --> 00:03:47,800 to five percent each year, down from ten percent. This was not a 49 00:03:47,840 --> 00:03:53,919 popular proposal for Dan Patrick. Some business groups came out against it, worried 50 00:03:53,919 --> 00:03:59,840 that it would kind of impact the real estate market. And I think basically 51 00:04:00,000 --> 00:04:03,599 where we are as feelings seem to move past it this week and instead seemed 52 00:04:03,639 --> 00:04:09,159 to focus on what we could maybe say the TPPF plan, the Abbot plan, 53 00:04:09,400 --> 00:04:14,479 something like that, which is the concept of compression, tax rate compression. 54 00:04:14,520 --> 00:04:16,879 And James, that's where I want to start this conversation. If you 55 00:04:16,920 --> 00:04:20,920 could sort of just kind of explain to us what they mean when they say 56 00:04:20,920 --> 00:04:25,959 compression. What is that doing to your taxes? Wow? Great question. 57 00:04:26,040 --> 00:04:30,000 You know, I think the simplest way to think about what tax compression is 58 00:04:30,000 --> 00:04:35,800 is to is to think of it this way. Tax rate compression is the 59 00:04:35,920 --> 00:04:43,680 same as tax rate cutting. And so you know what the what the legislature 60 00:04:43,800 --> 00:04:48,160 right now is getting ready to do, I think eventually, is use surplus 61 00:04:48,240 --> 00:04:58,600 revenue to cut school district maintenance and operations taxes, and they have a particular 62 00:04:58,680 --> 00:05:03,439 focus on school taxes. Now you might wonder why it's because that's the biggest 63 00:05:03,519 --> 00:05:09,120 part of most people's tax bill. So, you know, when when the 64 00:05:09,160 --> 00:05:14,040 average person pays their taxes, about fifty five percent of the total is on 65 00:05:14,079 --> 00:05:17,759 account of school district taxes and the other forty five percent tends to be a 66 00:05:17,800 --> 00:05:23,040 mix of city, county, and special district taxes. Now, when you 67 00:05:23,120 --> 00:05:29,279 look at the school district portion, that usually consists of two buckets. One 68 00:05:29,720 --> 00:05:33,519 goes toward maintenance and operations taxes, which pays for your day to day stuff, 69 00:05:34,279 --> 00:05:39,800 and the other goes to your interest in sinking tax and that usually pays 70 00:05:39,839 --> 00:05:43,279 for buildings. And so what again, what lawmakers are trying to do, 71 00:05:44,399 --> 00:05:47,000 or I think are getting ready to do, is use a lot of money 72 00:05:47,439 --> 00:05:54,000 to shrink that mino tax. And there's a lot of reasons why I think 73 00:05:54,040 --> 00:05:58,399 that's a good thing. But but that's kind of what the what both chambers 74 00:05:58,439 --> 00:06:01,759 seem to have agreement on. Now, they kind of vary in you know, 75 00:06:01,920 --> 00:06:05,079 one wants to also do a homestead exemption increase and the other wants to 76 00:06:05,079 --> 00:06:10,160 do uh an appraisal cap or at least we're considering it. But the compression 77 00:06:10,360 --> 00:06:14,600 element is where there seems to be a large amount of agreement I think, 78 00:06:15,399 --> 00:06:17,959 right right, and a big I think there. And the idea here is 79 00:06:18,000 --> 00:06:21,759 of course that you know, property taxes are levied at the local level, 80 00:06:23,240 --> 00:06:29,920 but the state can particularly influence school district taxes because school district school funding is 81 00:06:29,959 --> 00:06:33,519 basically paid through state and local tax collections, and the you know, in 82 00:06:33,639 --> 00:06:40,240 theory under compression, the more state fundings that you send to you know, 83 00:06:40,319 --> 00:06:46,319 school district, you can then lower the property tax collection from them from from 84 00:06:46,360 --> 00:06:50,800 the local level and things like that, essentially kind of shifting the balance here 85 00:06:50,879 --> 00:06:57,600 right between between state funds and and uh and and local tax collections there. 86 00:06:58,040 --> 00:07:00,759 Yeah, and some in your audience be wondering, well, you know, 87 00:07:00,879 --> 00:07:04,079 how, how exactly is the state able to do this? Are we sacrificing 88 00:07:04,120 --> 00:07:11,240 services? And I would say no, because what the state is doing is 89 00:07:11,600 --> 00:07:16,240 they've set aside a certain portion of money to not only fund the existing needs 90 00:07:16,680 --> 00:07:21,800 but also build upon that. In fact, the legislature passed a three hundred 91 00:07:21,879 --> 00:07:27,040 twenty one billion dollar budget for twenty twenty four and twenty five, and then 92 00:07:27,360 --> 00:07:30,160 in addition, to that, or I guess as part of that, they 93 00:07:30,160 --> 00:07:34,879 have a seventeen point six billion dollars set aside for tax relief, and also 94 00:07:35,319 --> 00:07:41,639 they have ten billion dollars in unspent gr and they're expecting a twenty two billion 95 00:07:41,680 --> 00:07:46,000 dollar fund balance in the Economic Stabilization Fund. So the state is actually enjoying 96 00:07:46,160 --> 00:07:51,759 quite a windfall. And with this windfall, they're investing back into the people, 97 00:07:53,399 --> 00:07:59,000 into taxpayers, and so, you know, I kind of, you 98 00:07:59,000 --> 00:08:03,959 know, it's it's somewhat interesting to me that we're so caught up on the 99 00:08:03,199 --> 00:08:11,519 method of delivery when I think conservatives ought to be more focused on how do 100 00:08:11,600 --> 00:08:16,639 we get that number up even higher, how do we get the legislature to 101 00:08:16,680 --> 00:08:22,600 go even bigger on tax relief and really help people out who are hurting right 102 00:08:22,600 --> 00:08:26,240 now. And you know, based on some of the comments that the governor 103 00:08:26,279 --> 00:08:31,480 made today, it sounded like maybe there was a little bit of wiggle room, 104 00:08:31,600 --> 00:08:33,919 especially if you look at some of the data points that are coming out 105 00:08:33,919 --> 00:08:37,960 from the Legislative Budget Board, which show that we're about a billion six under 106 00:08:39,000 --> 00:08:43,279 the existing constitutional tax and expenditure limitation. So there's at least a little bit 107 00:08:43,320 --> 00:08:48,279 more capacity where we could go bigger on tax relief if the body wanted to. 108 00:08:50,279 --> 00:08:52,960 James and you mentioned that, you know, everyone seems to agree that 109 00:08:54,000 --> 00:08:56,960 they want to spend a major chunk of money on compression. And the question 110 00:08:58,159 --> 00:09:01,799 right now that seems to be before the legislature is whether to spend all the 111 00:09:01,840 --> 00:09:07,240 money they've set aside or to save some of that money for home set exemptions. 112 00:09:07,399 --> 00:09:09,559 And the dan Patrick plan that he is kind of laid out here is 113 00:09:09,600 --> 00:09:15,240 expanding the concept of the home set exempt or expanding home st exemptions for people. 114 00:09:15,440 --> 00:09:18,240 The idea here is basically, if you own the home that you live 115 00:09:18,279 --> 00:09:22,559 in, you can claim a home set exemption. Right now, that number 116 00:09:22,639 --> 00:09:26,639 is forty thousand dollars and you can essentially, you know, subtract forty thousand 117 00:09:26,720 --> 00:09:31,279 dollars from the taxicable taxable value of your home when you're paying those taxes. 118 00:09:31,519 --> 00:09:37,279 Dan Patrick has proposed bumping that up to one hundred thousand dollars. So basically, 119 00:09:37,399 --> 00:09:39,960 right now, if you have a home that's worth three hundred thousand dollars, 120 00:09:41,279 --> 00:09:43,120 under the current rules, it would be tax set of value of two 121 00:09:43,200 --> 00:09:48,279 hundred and sixty thousand dollars. Under this proposed plan, it would go down 122 00:09:48,279 --> 00:09:56,679 to two hundred thousand dollars. This is currently not the plan that Governor Abbott 123 00:09:56,840 --> 00:10:00,600 wants to go with or has talked about it, and it differs the idea 124 00:10:00,679 --> 00:10:07,159 that that that TPPF is pushing. Why do y'all think that focusing solely on 125 00:10:07,240 --> 00:10:11,759 compression is the best way to go? Great question. You know, let 126 00:10:11,840 --> 00:10:16,480 me just say this at the outset, I'm in all of the above, 127 00:10:16,559 --> 00:10:20,080 guy, And so if the legislature comes forward with a mix of different approaches 128 00:10:22,720 --> 00:10:28,360 and those approaches help get tax bills down, then one percent supported. Now 129 00:10:28,399 --> 00:10:33,639 that said, you know, I've been here at the Foundation now for fifteen 130 00:10:33,720 --> 00:10:37,120 years, believe it or not, which is terrifying to think about. And 131 00:10:37,240 --> 00:10:41,919 probably for about thirteen of those fifteen years, I've been on this wild ride 132 00:10:43,000 --> 00:10:48,360 trying to educate people on the benefits of eliminating property taxes. And I think 133 00:10:48,360 --> 00:10:50,879 it comes down to a property rights question, and maybe we can get into 134 00:10:50,919 --> 00:10:58,000 that. But but with respect to this kind of incremental school district Emino property 135 00:10:58,000 --> 00:11:05,039 tax elimination, they're really three benefits here by focusing solely on compression. The 136 00:11:05,080 --> 00:11:11,120 first is that it helps homeowners, renters, businesses, and really properties of 137 00:11:11,120 --> 00:11:16,879 all type. Right, You're you're delivering broad based relief to the most number 138 00:11:16,919 --> 00:11:20,519 of people when you do a tax rate compression plan. The same cannot be 139 00:11:20,559 --> 00:11:26,080 said for a homestead exemption increase, right, that that is a concentrated benefit 140 00:11:26,200 --> 00:11:31,919 to homesteaders only. Now, as a homesteader, I would probably enjoy that. 141 00:11:31,919 --> 00:11:35,279 In fact, I would enjoy it. But but let's also recognize that 142 00:11:35,360 --> 00:11:39,759 renters and businesses are being left out when it comes to that particular approach. 143 00:11:39,320 --> 00:11:46,159 Now, the second reason why we tend to support a tax compression plan is 144 00:11:46,200 --> 00:11:52,919 that it eliminates this really bad school district scheme called recapture, which I'm sure 145 00:11:54,080 --> 00:11:58,200 most in your audience already know, but you know basically works like this, 146 00:11:58,320 --> 00:12:01,799 you take from some to give to others. And I think there are better 147 00:12:01,840 --> 00:12:07,320 ways to do school finance. And so by moving that m Ando tax rate 148 00:12:07,360 --> 00:12:11,960 to zero, what you do as you put Texas on the pathway to eliminating 149 00:12:11,000 --> 00:12:16,360 recapture entirely. And then, you know, the third and probably the most 150 00:12:16,399 --> 00:12:22,200 important reason in my mind again is that by eliminating the m Ando tax, 151 00:12:22,279 --> 00:12:31,919 what we're doing is we're we're recognizing the goal that is that is, you 152 00:12:31,919 --> 00:12:37,080 know, the broader effort to eliminate property taxes entirely. Right, this is 153 00:12:37,279 --> 00:12:45,720 the first step on that ultimate pathway to ending property taxes and moving to a 154 00:12:45,879 --> 00:12:52,840 reformed sales tax approach. And so this is you know, we've talked a 155 00:12:52,879 --> 00:12:54,960 lot about this issue in the past. There's lots of research on our website 156 00:12:56,000 --> 00:13:00,000 documenting how you get from point A to point B. But but ultimately, 157 00:13:00,159 --> 00:13:05,039 by using surplus revenue to compress that mino tax rate to zero, we feel 158 00:13:05,080 --> 00:13:11,919 like that is the first most important marker on the pathway to eliminating property taxes 159 00:13:11,080 --> 00:13:16,360 entirely. I want to there's been a couple kind of criticisms of this plan, 160 00:13:16,519 --> 00:13:20,679 and I want to get into the long term goals of this in a 161 00:13:20,679 --> 00:13:24,639 little bit, but first let's talk about what's kind of before us this special 162 00:13:24,679 --> 00:13:28,759 session. You know, the first criticism of it would be I would say 163 00:13:28,960 --> 00:13:33,080 kind of classify as the Dan Patrick criticism, right, and he has really 164 00:13:33,120 --> 00:13:35,960 focused on feeling the need for some kind of home it set exemption. I 165 00:13:35,960 --> 00:13:39,000 mean, really for the reason that you cited, which is the idea that 166 00:13:39,120 --> 00:13:46,480 homeowners should get a larger tax break than other folks. You know, one 167 00:13:46,519 --> 00:13:50,200 thing about the homestead exemption is that no matter how valuable your house is, 168 00:13:50,559 --> 00:13:54,240 you get the same level of savings. And I'm not sure that Dan Patrick 169 00:13:54,360 --> 00:13:58,159 is making this argument, but you know, you could make the argument. 170 00:13:58,600 --> 00:14:05,440 A very significant chunk of the surplus that came into state coffers this year came 171 00:14:05,559 --> 00:14:09,039 from the sales tax. The sales tax is, you know, a what 172 00:14:09,080 --> 00:14:13,960 people call a regressive tax. It's a tax where the lower your income, 173 00:14:13,320 --> 00:14:18,000 more likely the higher percentage of your income you'll be paying into the tax. 174 00:14:18,320 --> 00:14:24,559 So why not send more of this percentage of the savings? Why not give 175 00:14:24,600 --> 00:14:28,759 people who have lower home values a higher percentage of savings than people who have 176 00:14:28,840 --> 00:14:33,399 higher values. But then, I mean, I think his more specific Yard 177 00:14:33,600 --> 00:14:37,600 argument is that, you know, the Senate Plan gives I'm reading from a 178 00:14:37,639 --> 00:14:41,919 tweet that he published earlier this week, the Senate Plan gives homeowners a permanent 179 00:14:43,200 --> 00:14:46,639 twelve hundred to fourteen fifty dollars tax cut. The Abbot Slash House plan, 180 00:14:46,919 --> 00:14:52,440 which is compression, only gives the average homeowner about seven hundred and forty dollars. 181 00:14:52,600 --> 00:14:56,799 Because they're giving a significant portion of tax cuts to businesses and the top 182 00:14:56,840 --> 00:15:01,720 twenty percent of highest priced homes. What what do you think about that argument 183 00:15:01,720 --> 00:15:05,279 that he's making there. Well, you're right, you know, we are 184 00:15:05,320 --> 00:15:09,480 in the place that we're in because we've had a lot of economic growth which 185 00:15:09,559 --> 00:15:13,759 is translated into sales tax excess, and of course inflation plays a big part 186 00:15:13,799 --> 00:15:22,279 there too, And because it's come from such a broad based revenue source, 187 00:15:22,840 --> 00:15:26,120 I actually think it's only natural to return it in the broadest way possible, 188 00:15:26,200 --> 00:15:31,799 which is, of course, through tax rate compression. I certainly understand the 189 00:15:31,799 --> 00:15:39,559 attractiveness of the Lieutenant Governor's plan, but one thing I think, you know, 190 00:15:39,840 --> 00:15:48,080 may not be most readily, most readibly recognized as the fact that when 191 00:15:48,120 --> 00:15:56,480 we pass along these tax savings to businesses as part of tax compression, you 192 00:15:56,519 --> 00:16:03,840 know, those ultimately translate into lower prices for consumers, higher wages for employees, 193 00:16:03,919 --> 00:16:10,720 more investment gains for those who've invested in those businesses. So, you 194 00:16:10,720 --> 00:16:18,759 know, there may not be an immediately recognizable benefit to the average taxpayer, 195 00:16:19,759 --> 00:16:22,480 but when they go to the store, their stuff is going to be cheaper, 196 00:16:23,240 --> 00:16:26,320 or they're going to get a raise, or they're going their investments are 197 00:16:26,320 --> 00:16:30,320 going to perform better. And so those are things that I think may not 198 00:16:30,480 --> 00:16:34,120 necessarily be accounted for in some of the numbers coming out of the Upper Chamber. 199 00:16:36,240 --> 00:16:38,679 Okay, okay, Karen, I want to pause right here before we 200 00:16:38,720 --> 00:16:41,960 get into the long term question and talk a little bit about the short term 201 00:16:41,960 --> 00:16:48,639 politics of this. It's been a very interesting week in the legislature. You 202 00:16:48,639 --> 00:16:52,679 know, on Monday, when the legislature was wrapping up usually sort of a 203 00:16:52,759 --> 00:16:57,200 ceremonial day for the two chambers, we kind of went long wondering whether a 204 00:16:57,279 --> 00:17:02,320 last minute tax deal would be strung that did not end up happening. And 205 00:17:02,360 --> 00:17:07,079 then hours later, you know, while many of us were partying and celebrating, 206 00:17:07,160 --> 00:17:11,119 you know, having our traditional siney die parties, Abbott calls a special 207 00:17:11,119 --> 00:17:17,240 session and he sort of kind of lays out his chosen path. The governor 208 00:17:17,279 --> 00:17:22,240 can control what the lawmakers can kind of discuss the parameters of a special session, 209 00:17:22,519 --> 00:17:26,119 and he basically said, you know, I want the lawmakers to consider 210 00:17:26,960 --> 00:17:33,200 property tax savings solely kind of centered around the idea of compression. That didn't 211 00:17:33,240 --> 00:17:37,359 really seem to settle the debate though. The House comes in they pass a 212 00:17:37,400 --> 00:17:44,480 bill, an entirely compression pression tax cut bill in which and then immediately adjourned 213 00:17:44,519 --> 00:17:48,880 Siney Die sort of kind of sending the message to Dan Patrick. You know, 214 00:17:49,119 --> 00:17:52,200 here's our plan, take it or leave it. Dan Patrick at this 215 00:17:52,319 --> 00:17:57,039 point has neither taken it nor left it. He adjourned the Senate for several 216 00:17:57,079 --> 00:18:00,559 days. They came back briefly today, and we'll be coming back tomorrow I 217 00:18:00,680 --> 00:18:07,720 mean, sorry, not tomorrow, early next week. We seem to be 218 00:18:07,759 --> 00:18:11,400 in a stalemate here. I mean, are there any signs of people kind 219 00:18:11,440 --> 00:18:15,880 of uh, you know, coming to an agreement at this point? Well, 220 00:18:15,880 --> 00:18:17,799 that's um, that's first of all, I just want to say, 221 00:18:17,799 --> 00:18:25,799 that's like the longest question I've been asked ever. Um, Well, so, 222 00:18:26,160 --> 00:18:30,599 um, are we are we seeing signs of an agreement? Well? 223 00:18:30,720 --> 00:18:36,279 I think that James James's point about how there does happen to be agreement on 224 00:18:36,559 --> 00:18:38,920 buying down M and O, and there even seems to be, you know, 225 00:18:40,119 --> 00:18:44,559 agreement at least publicly on ultimately eliminating all emin O. Right. We 226 00:18:44,680 --> 00:18:48,720 hear Abbotts saying that we hear some of that. Um um, but but 227 00:18:49,079 --> 00:18:55,119 you know, beyond that, Um, we've just adjourned or the Senate has 228 00:18:55,200 --> 00:18:57,640 just adjourned. When you cover the whole session, you start saying we even 229 00:18:57,640 --> 00:19:04,480 though you're not wanting um, they've adjourned until Tuesday. The Senate has of 230 00:19:04,559 --> 00:19:08,039 course, we know the House is adjourned altogether for the remainder of the session. 231 00:19:08,359 --> 00:19:12,039 Um and uh. And so the Senate's coming back on Tuesday night. 232 00:19:12,160 --> 00:19:17,680 So my guess is that it's not nearly as quiet in the back rooms. 233 00:19:17,799 --> 00:19:21,640 You know, over the weekend there's plenty of activity going on where we can't 234 00:19:21,640 --> 00:19:23,039 see them, although a lot of it has been happening in public. You've 235 00:19:23,039 --> 00:19:26,400 seen a very public kind of war of words or debate, you know a 236 00:19:26,400 --> 00:19:30,640 little bit of both maybe among you know Abbott and Dewhurst and um, you 237 00:19:30,680 --> 00:19:34,920 know the party really you know, what I thought it was interesting in this 238 00:19:36,119 --> 00:19:41,119 kind of difference is uh, you know the head Texas GFP head Matt Ronaldi 239 00:19:41,319 --> 00:19:45,799 and is having um with you know, the house plan he's on. He 240 00:19:45,160 --> 00:19:51,680 favors Senator's plan. Is he did say, um that he's not convinced that 241 00:19:51,720 --> 00:19:57,440 the people supporting compression are actually really aiming to reduce taxes, which I mean, 242 00:19:57,480 --> 00:20:00,799 but to eliminate property taxes right at the m and taxes. Um. 243 00:20:02,079 --> 00:20:06,839 And so what I heard Abbot say right out of the gate. First thing 244 00:20:06,839 --> 00:20:10,319 out of his mouth after property tax was was, you know, how, 245 00:20:10,880 --> 00:20:15,440 um, how they need to eliminate the mno tax entirely. And that was 246 00:20:15,480 --> 00:20:19,920 pretty much his whole message. So, um, you know, I guess 247 00:20:21,000 --> 00:20:26,000 where where where we're seeing some you know, agreement is eliminating the property taxes 248 00:20:26,119 --> 00:20:30,559 entirely. But but we're you know, whether we're going to get there this 249 00:20:30,599 --> 00:20:33,519 session or the next special session or the next special session after that kind of 250 00:20:34,279 --> 00:20:38,160 I don't know, someone's going to have to give right. Um at the 251 00:20:38,519 --> 00:20:41,799 day, he would call them back as many as it took, and he 252 00:20:41,880 --> 00:20:45,319 did say that they were going to do property taxes before anything else. Um, 253 00:20:45,359 --> 00:20:48,119 I guess except for the border thing that they also did this week. 254 00:20:48,240 --> 00:20:51,119 But um, you know, school choice and that kind of thing. So 255 00:20:51,839 --> 00:20:53,119 you know, I guess, I guess the very The short answer to your 256 00:20:53,119 --> 00:20:57,759 long question is, UM, I don't know. I don't know if there's 257 00:20:57,880 --> 00:21:02,880 for seeing these lines agree? Do you mean? Is it? Say anybody? 258 00:21:03,200 --> 00:21:06,839 Yeah? I mean I think it has been interesting to watch this because 259 00:21:07,519 --> 00:21:15,000 Dan Patrick is obviously a passionate, emphatic Lieutenant governor. He does not he 260 00:21:15,279 --> 00:21:18,160 you know, does not like to back down, and it does seem a 261 00:21:18,200 --> 00:21:22,000 little bit like I mean, we saw him speaking on Tuesday at TPPF. 262 00:21:22,039 --> 00:21:26,160 As we mentioned at the top of the show, did not seem happy with 263 00:21:26,240 --> 00:21:29,279 Dad Feelin, was not happy with the way he run the house ran the 264 00:21:29,319 --> 00:21:33,599 house, and then Dad Feeland came out and really kind of you know, 265 00:21:33,839 --> 00:21:37,079 sort of backed him into a corner there by passing his bill and immediately leaving, 266 00:21:37,119 --> 00:21:41,680 basically giving him the choice of sort of you know what I think a 267 00:21:41,720 --> 00:21:47,759 lot of people would perceive as sort of admitting defeat on this issue or or 268 00:21:48,079 --> 00:21:52,400 or forcing another special session. And you know, it is interesting to see 269 00:21:52,400 --> 00:21:57,680 this Republicans fight this much over tax cuts because you know, that's one of 270 00:21:57,680 --> 00:22:02,160 the key planks to the the party there. But I don't know, it 271 00:22:02,200 --> 00:22:03,759 just seems like there's a lot of tension there and they're going to have to 272 00:22:03,799 --> 00:22:07,720 figure a way to help people kind of save some face here. And one 273 00:22:07,720 --> 00:22:11,079 of the things that I like to kind of keep in mind, and you 274 00:22:11,119 --> 00:22:15,799 know, the numbers of how how much each homestead are you know, I'm 275 00:22:15,839 --> 00:22:19,359 a homeowner as well, um would save you know, with each plan is 276 00:22:19,359 --> 00:22:22,480 going to vary, right, It's going to vary by home value. Is 277 00:22:22,480 --> 00:22:25,559 going to vary by you know, tax rate, school district, you're in 278 00:22:25,759 --> 00:22:27,960 just a lot of things. But the numbers that are being thrown out twelve 279 00:22:29,000 --> 00:22:33,599 hundred and fourteen hundred, you know, five hundred for you know, for 280 00:22:33,680 --> 00:22:37,319 in one version of a plan for a two hundred and fifty thousand dollar house, 281 00:22:37,359 --> 00:22:40,960 and in nine hundred and another version of a plan. We're if we're 282 00:22:41,000 --> 00:22:44,599 looking at the real impact. It's the biggest, one of the biggest ticket 283 00:22:44,640 --> 00:22:48,720 items in terms of new money in the budget is you know, if you 284 00:22:48,799 --> 00:22:52,359 add the money from the last plan and the money for the new plan, 285 00:22:52,480 --> 00:22:56,039 seventeen point six billions and that nothing else comes close to in terms of that. 286 00:22:56,599 --> 00:23:00,160 But you're looking at reality somewhere in the neighborhood between four hundred I mean 287 00:23:00,200 --> 00:23:04,519 forty and one hundred dollars a month for somebody with a three hundred and fifty 288 00:23:04,519 --> 00:23:11,240 thousand dollars home in an average tax a school district taxing situation, right, 289 00:23:12,720 --> 00:23:17,359 it's going to vary a little bit. But but that's the amount we're talking 290 00:23:17,400 --> 00:23:19,759 about, which and I'm not You're never gonna find me sneezing at forty bucks 291 00:23:19,799 --> 00:23:22,960 a month or one hundred bucks a month or two hundred bucks a month or 292 00:23:22,960 --> 00:23:26,480 whatever. But when we're talking about numbers, is giant is seventeen point six 293 00:23:26,559 --> 00:23:32,160 billion. And I can't imagine there's anybody that would agree with me that would 294 00:23:32,200 --> 00:23:34,039 say, if there is going to be a tax, you know, a 295 00:23:34,039 --> 00:23:37,680 property tax cut, who's going to vote against higher numbers at any point? 296 00:23:37,799 --> 00:23:42,200 Right? However, it's way more nuanced than that. And what it always 297 00:23:42,200 --> 00:23:48,680 helps to remember is this isn't you know the numbers as they come down is 298 00:23:48,160 --> 00:23:53,759 there? They're They're not enormous. And I think that the where we could 299 00:23:53,799 --> 00:23:59,480 probably see agreement with everybody is that down no matter what they do this time, 300 00:24:00,079 --> 00:24:03,200 the goal would be to keep working towards lower properties taxes for the people 301 00:24:03,200 --> 00:24:07,920 that are fighting right now, right, that makes sense? Yeah, you 302 00:24:07,960 --> 00:24:11,279 know, I mean the real impact on home hone owners is very interesting to 303 00:24:11,319 --> 00:24:15,720 keep in mind during all this. Definitely, as I was watching this, 304 00:24:15,880 --> 00:24:19,160 you know over the weekend. Um, we are of course all very tired 305 00:24:19,200 --> 00:24:22,759 after covering a very long session. James, I'm sure you have your own 306 00:24:22,759 --> 00:24:26,680 fatigue there. I started trying to do the math of like how much would 307 00:24:26,720 --> 00:24:29,640 I pay for them to just figure this out? And we could all go 308 00:24:29,680 --> 00:24:32,160 home and rest. It is it less than what I would save on my 309 00:24:32,200 --> 00:24:40,559 property taxes? You know? Yeah, I'll throw a month out of property 310 00:24:40,559 --> 00:24:42,519 text savings out on that. All right, Well, let's let's pause for 311 00:24:42,519 --> 00:24:45,680 a moment and here from our sponsors, and then I want to talk about 312 00:24:45,680 --> 00:24:49,920 the long term plans. Here. DHR Health Level one Trauma Center in Edinburgh, 313 00:24:49,920 --> 00:24:53,680 Texas provides the highest level of patient care and four counties in the Rio 314 00:24:53,759 --> 00:24:59,880 Grand Valley with state of the art technology, groundbreaking research, compassionate care for 315 00:25:00,119 --> 00:25:03,440 each patient, and is the largest health system south of San Antonio. For 316 00:25:03,519 --> 00:25:11,599 more information, visit dhrhealth dot com and lone Star College works for Texas, 317 00:25:11,839 --> 00:25:15,920 providing real world workforce training in state of the art facilities to meet employers demands. 318 00:25:17,440 --> 00:25:21,599 Learn more at lone Star dot edu. Okay, so James, I 319 00:25:21,680 --> 00:25:23,839 want to talk a little bit more about this long term goal. I believe 320 00:25:23,880 --> 00:25:30,880 it was tppf's number one legislative priority this year to you know, eliminate or 321 00:25:30,920 --> 00:25:34,799 begin the process of eliminating that mino tax that you talked about. I'd imagine 322 00:25:34,839 --> 00:25:38,920 it was probably, you know, pretty exciting to for y'all to see abbot 323 00:25:38,920 --> 00:25:44,240 embrace this idea. In the last couple of weeks. I believe it was 324 00:25:44,279 --> 00:25:47,680 maybe one of your tweets that he quoted and said, you know, I 325 00:25:47,759 --> 00:25:51,920 support the TPPF plan. Here. Does it feel like there's more momentum around 326 00:25:51,920 --> 00:25:56,559 that idea than there has been, you know, in the past. Yes, 327 00:25:57,279 --> 00:26:03,039 you know, I think part of the part of the interest in moving 328 00:26:04,119 --> 00:26:11,400 in the tax compression direction is that there's this general frustration that you know, 329 00:26:11,440 --> 00:26:18,039 over the last several sessions, the legislature has taken different steps to try and 330 00:26:18,119 --> 00:26:22,000 get a handle on the property tax problem. You know, they've done various 331 00:26:22,000 --> 00:26:27,559 things like institute revenue limitations. They've increased the homestead exemption. You know, 332 00:26:27,640 --> 00:26:32,200 back in O eight and O nine they actually compressed tax rates by about a 333 00:26:32,279 --> 00:26:37,200 third. They've done all these things over the years to try and wrestle with 334 00:26:37,240 --> 00:26:41,400 the bear. But unfortunately, it seems like every couple of years we're just 335 00:26:41,559 --> 00:26:48,359 back here in the same situation, trying to reimagine how to tackle this problem. 336 00:26:48,359 --> 00:26:52,039 And so, you know, I think at least within the conservative movement, 337 00:26:52,119 --> 00:26:57,160 that's why there's been something of a spike in the interest in our plan, 338 00:26:57,319 --> 00:27:00,839 because it offers a permanent Now, well, let me let me let 339 00:27:00,880 --> 00:27:06,759 me offer a caveat with that, because the Lieutenant Governor actually made a very 340 00:27:06,759 --> 00:27:08,359 good point the other day when he said, look, if we increased the 341 00:27:08,440 --> 00:27:15,440 homestead exemption, you know, that's a constitutional change that really isn't going to 342 00:27:15,400 --> 00:27:22,799 vary over time because it's very difficult to to change the constitution. If you 343 00:27:22,880 --> 00:27:26,839 do a tax compression effort, that's just a statutory change, and any future 344 00:27:27,000 --> 00:27:32,599 legislature could come in and revisit that issue. And I actually I agree with 345 00:27:32,680 --> 00:27:36,240 him, um. And one of the things that I was pleased to hear 346 00:27:36,279 --> 00:27:41,440 from the governor today, I think is he said something along the lines of 347 00:27:41,000 --> 00:27:48,240 he hoped the legislature would take up, you know, a constitutional amendment to 348 00:27:49,039 --> 00:27:56,279 pinpoint where we want to go, which is a zero dollar, zero dollar 349 00:27:56,279 --> 00:28:03,200 mino tax rate, and and by codifying that in the Texas Constitution, you 350 00:28:03,240 --> 00:28:07,160 know, we set our goal and that's where we're marching to, and you 351 00:28:07,200 --> 00:28:14,720 know, we wouldn't really have to worry about any future legislatures changing our course. 352 00:28:15,559 --> 00:28:18,640 And so, you know, I hope that's something the body considers moving 353 00:28:18,680 --> 00:28:22,839 forward, because because the Lieutenant Governor's point is well taken, the legislature does 354 00:28:22,920 --> 00:28:26,880 need to do something to make sure that if we're going to embark on this 355 00:28:26,960 --> 00:28:32,079 pathway to elimination, we stay the course. And I think we can do 356 00:28:32,119 --> 00:28:37,319 that with some some good government changes up at Capitol Hill well, and also 357 00:28:37,359 --> 00:28:40,400 the added challenge of figuring out how to replace the money in the school finance 358 00:28:40,440 --> 00:28:42,400 system, right and you know, with whatever kind of school funding, because 359 00:28:42,400 --> 00:28:47,720 you would have to do both of those things within the same timeframe. I 360 00:28:47,720 --> 00:28:51,200 would think that's what you're saying, right, Yeah, Yeah, you know. 361 00:28:51,240 --> 00:28:55,480 One of the one of the encouraging bits about being here in Texas is 362 00:28:55,480 --> 00:29:00,400 that our economy is an absolute powerhouse and I don't see that variable changing necessarily 363 00:29:00,400 --> 00:29:04,000 in the near future. Yes, we may be on the cusp of a 364 00:29:04,119 --> 00:29:10,279 mild to moderate recession, but I think on the long term, Texas' economy 365 00:29:10,519 --> 00:29:14,480 is poised to, i mean just grow leaps and bounds. In addition to 366 00:29:14,599 --> 00:29:18,880 that, I think the inflation situation is not going to abate anytime in the 367 00:29:18,880 --> 00:29:23,559 near future. We're probably going to endure a period of modest to high inflation, 368 00:29:25,119 --> 00:29:29,559 which means, for state revenue purposes, our sales tax collections are going 369 00:29:29,599 --> 00:29:33,400 to be elevated as compared to years past. And so when you marry those 370 00:29:33,440 --> 00:29:37,319 two factors together, at least in my mind, what you get is a 371 00:29:37,400 --> 00:29:42,599 lot of excess revenue in the years to come. And because the state has 372 00:29:42,640 --> 00:29:48,319 done such a good job to a ENaC constitutional and statutory spending limits, that 373 00:29:48,400 --> 00:29:52,359 means you, by and large, we're not blowing the doors off the budget 374 00:29:52,400 --> 00:29:56,920 every time, and we're going to have the ability to enjoy those surplus revenues 375 00:29:57,319 --> 00:30:00,319 in the future, which then, of course raises a questionable what do you 376 00:30:00,359 --> 00:30:04,440 do with them? And at least according to our plan, you would redirect 377 00:30:04,480 --> 00:30:08,160 those moneies as much as possible, as much as you know makes sense, 378 00:30:08,640 --> 00:30:15,759 down to the school district level, and you replace those finances with surplus dollars 379 00:30:15,759 --> 00:30:18,000 over time. And I think we can actually get all of this accomplished in 380 00:30:18,000 --> 00:30:21,960 ten years or less. That's what some really smart people here at the Foundation 381 00:30:22,079 --> 00:30:26,519 suggest. At least, you know, I should note that Another thing kind 382 00:30:26,519 --> 00:30:30,799 of Dan Patrick said this week is he called that plan. He said that 383 00:30:30,839 --> 00:30:36,480 plan is not realistic and everyone knows it. And he floated the idea that 384 00:30:36,559 --> 00:30:40,160 in order to end property taxes for good, it would this is I'm quoting 385 00:30:40,200 --> 00:30:44,400 him here, It would require increasing the local sales tax from around eight and 386 00:30:44,400 --> 00:30:49,680 a quarter percent to about nineteen percent. I mean, is there a a 387 00:30:51,079 --> 00:30:55,039 sales tax increase that would be necessary in order to do this? So, 388 00:30:55,160 --> 00:30:57,680 I mean that was one idea that was floated I believe in twenty nineteen, 389 00:30:57,759 --> 00:31:03,160 and lawmakers ended up projecting it right, So terrific question. Let me offer 390 00:31:03,240 --> 00:31:07,880 just one point of clarification because for a lot of years, what we were 391 00:31:07,920 --> 00:31:14,720 trying to encourage the body to consider is this wholesale change, moving from the 392 00:31:14,799 --> 00:31:19,039 existing property tax system to a reform sales tax. And that's really where the 393 00:31:19,079 --> 00:31:23,240 Lieutenant Governor's comments are aimed, because yes, you would need to adjust the 394 00:31:23,440 --> 00:31:29,000 rate and the base. Now I don't depending on you know, what you 395 00:31:29,160 --> 00:31:34,200 actually included in that reform sales tax. I don't think you'd have to go 396 00:31:34,319 --> 00:31:38,240 necessarily above ten percent. You could probably actually stay around eight to nine percent 397 00:31:40,160 --> 00:31:42,359 based on some of the recent math we've done on the strength of the economy. 398 00:31:42,440 --> 00:31:48,680 But again, we kind of set aside that plan for future discussion because 399 00:31:48,680 --> 00:31:52,880 it ultimately proved to be too much of a paradigm shift at the capital and 400 00:31:52,960 --> 00:31:57,799 we tried to scale down our approach, and so really what we're focused on 401 00:31:57,880 --> 00:32:04,480 right now is a is an incremental version of that long term plan, which 402 00:32:04,480 --> 00:32:10,400 really again focuses just on using surplus tax dollars to get out the MINO part 403 00:32:10,559 --> 00:32:16,440 of the equation, and so that would require no sales tax rate or base 404 00:32:16,640 --> 00:32:22,839 adjustment. We're only using existing tax dollars that are above the spending limit, 405 00:32:22,119 --> 00:32:27,480 and we're trying to get at the problem that way. James, you know, 406 00:32:27,480 --> 00:32:32,039 we've talked about the biggest property tax cut in history. The current record 407 00:32:32,079 --> 00:32:36,680 holder, I believe for that is two thousand and six, when the state 408 00:32:36,759 --> 00:32:42,480 spent billions on reducing the MINO by I believe one third. Two years later, 409 00:32:43,640 --> 00:32:46,640 the economy crashed, you know, and we ended up getting a twenty 410 00:32:46,880 --> 00:32:52,559 eleven session that forced the state to cut thirty one billion dollars from the budget. 411 00:32:52,319 --> 00:32:55,440 Five point four billion of that ended up being cut from schools. We 412 00:32:55,440 --> 00:33:01,519 saw teacher cuts, larger class sizes, and it took multiple sessions to kind 413 00:33:01,519 --> 00:33:05,039 of catch up with that, I believe. You know, really it might 414 00:33:05,039 --> 00:33:08,440 have been even to the twenty nineteen session where you know, there was there 415 00:33:08,519 --> 00:33:14,200 was more money available to kind of to finally catch up from the cuts that 416 00:33:14,279 --> 00:33:17,480 were made you've mentioned, you know, there's questions about whether we're headed into 417 00:33:17,480 --> 00:33:22,319 a recession. Obviously two thousand and eight was of a fairly extreme recession. 418 00:33:22,359 --> 00:33:25,920 We call it the Great Recession for a reason. But I mean, I 419 00:33:27,519 --> 00:33:31,400 have to ask about the kind of what The second argument I was going to 420 00:33:31,519 --> 00:33:35,680 raise, in addition to the dan Patrick argument against this, was the what 421 00:33:35,799 --> 00:33:43,359 about the rainy day argument? What even if Texas's economy is growing at an 422 00:33:43,400 --> 00:33:47,079 incredible rate and has been for you know, generations, now there we're also 423 00:33:47,119 --> 00:33:51,759 tied to the national economy. There are things that can happen that can kind 424 00:33:51,799 --> 00:33:55,440 of, you know, bring down Texas with it. Are we not setting 425 00:33:55,440 --> 00:34:02,880 ourselves up for every time we increase the state you know, we buy down 426 00:34:02,920 --> 00:34:07,320 those taxes, as opposed to spending that surplus money on say, one time 427 00:34:07,360 --> 00:34:13,079 expenses, setting up a situation where when things turn south, we're going to 428 00:34:13,159 --> 00:34:21,639 have to make significant cuts to balance the budget. Horrific question. A couple 429 00:34:21,679 --> 00:34:25,559 of things come to mind on that. One is I feel that the legislature 430 00:34:29,079 --> 00:34:36,440 has actually, I think put a lot of money toward one time expenses and 431 00:34:36,920 --> 00:34:42,280 expenditures of an unusual nature in this current budget. And I think that's why 432 00:34:42,360 --> 00:34:49,320 you see kind of the expenditure growth that you do from the twenty twenty two 433 00:34:49,559 --> 00:34:52,000 twenty three by a EM to the twenty twenty four twenty five by an EM. 434 00:34:52,880 --> 00:34:55,480 And so for anybody, and I know your audience is in the know, 435 00:34:55,639 --> 00:35:00,079 but for anybody who's not, you know, the budget that the the 436 00:35:00,239 --> 00:35:06,320 last legislature passed, the eighty seventh legislature, they they spent two hundred and 437 00:35:06,360 --> 00:35:12,239 forty five billion dollars. That was the budget total in the last eighty seventh 438 00:35:12,280 --> 00:35:16,639 regular session. This session, that budget has grown to three hundred and twenty 439 00:35:16,639 --> 00:35:22,239 one billion dollars, right, so there's a very sizable increase. Now, 440 00:35:22,920 --> 00:35:30,239 um, you know, some of that is again they're counting tax relief as 441 00:35:30,239 --> 00:35:32,960 an expenditure, So seventeen point six billion dollars of that three hundred and twenty 442 00:35:32,960 --> 00:35:38,559 one billion is embedded with that within that amount, and then you have money 443 00:35:38,559 --> 00:35:44,480 for border security and the grid and school choice and so again, you know, 444 00:35:44,519 --> 00:35:49,760 there's lots built into that three twenty one. But all of that to 445 00:35:49,840 --> 00:35:59,079 say they I think the legislature has has really utilized a lot of resources this 446 00:35:59,159 --> 00:36:02,760 session, so I don't don't have as much concern about, you know, 447 00:36:02,840 --> 00:36:06,519 how are we going to provide for needs in the future, because I feel 448 00:36:06,559 --> 00:36:09,119 like we've done a lot this session and we probably need to tap the brakes 449 00:36:09,119 --> 00:36:14,199 a little bit as we move forward. But that said, you know, 450 00:36:14,280 --> 00:36:19,760 it is a very legitimate concern to raise that, Well, what happens if 451 00:36:19,840 --> 00:36:23,199 we do all these things on tax relief and we hit a wall. And 452 00:36:23,519 --> 00:36:27,480 by the way, a lot of economists will tell you that, you know, 453 00:36:27,719 --> 00:36:32,480 perhaps around the November time frame is when they expect a recession to really 454 00:36:32,519 --> 00:36:37,440 take hold in this country. And you know, Texas is certainly not immune 455 00:36:37,440 --> 00:36:45,480 from that, were that to take place, Texas has ample resources with which 456 00:36:45,519 --> 00:36:52,519 to be able to bridge any revenue shortfall. So appropriators, even though they 457 00:36:52,559 --> 00:36:55,599 spend a lot of money this session, they didn't spend at all. There's 458 00:36:55,639 --> 00:37:05,159 about a ten billion dollars set aside in general revenue that is not being used 459 00:37:05,159 --> 00:37:12,000 for anything they're In addition to that, the we expect that the Economic Stabilization 460 00:37:12,159 --> 00:37:15,800 Fund will grow to about twenty two billion dollars by the end of fiscal year 461 00:37:15,159 --> 00:37:20,760 twenty twenty five. So you pair those two pots of money together and you 462 00:37:20,800 --> 00:37:24,519 see that you know, we've got at least ten percent of the all funds 463 00:37:24,599 --> 00:37:30,320 budget sitting off to the side. In the event that the economy hits a 464 00:37:30,360 --> 00:37:36,760 wall. Now, you know, let's say things get really severe and for 465 00:37:36,800 --> 00:37:45,039 whatever reason those sources of revenue are not enough. Well, at that point, 466 00:37:45,079 --> 00:37:47,559 then I would suggest that we need to entertain the idea of cutting spending. 467 00:37:49,519 --> 00:37:52,000 And I don't just throw that out there willy nilly. If anybody wants 468 00:37:52,039 --> 00:37:57,159 to look at some of the research we put together, I've done a lot 469 00:37:57,159 --> 00:38:00,920 of work to track tax levy growth over time. In fact, I've got 470 00:38:00,920 --> 00:38:06,840 one document out there called just the Facts, where literally try to not provide 471 00:38:06,880 --> 00:38:12,280 any commentary, but really just the data points for tax levy growth in the 472 00:38:12,400 --> 00:38:16,960 thirty largest cities, counties, and school districts in Texas, and then compare 473 00:38:17,000 --> 00:38:22,559 that with population and inflation. And for the vast, vast, vast majority 474 00:38:22,639 --> 00:38:28,280 of the entities that I studied, all of them are exceeding their property tax 475 00:38:28,360 --> 00:38:32,960 revenue collections above that population and inflation threshold leaps and bounds. In fact, 476 00:38:34,000 --> 00:38:42,679 some of the large urban school districts are actually losing enrollment and while at the 477 00:38:42,719 --> 00:38:45,360 same time their revenues are growing. Leaps and bounds, and so there's a 478 00:38:45,400 --> 00:38:47,760 mismatch there is. Effectively, what I'm trying to say, I think there's 479 00:38:47,800 --> 00:38:52,800 a lot of opportunity, based on the data to revisit what we're spending, 480 00:38:52,840 --> 00:38:54,719 not only the state level, but also at the local level. And by 481 00:38:54,760 --> 00:38:58,719 the way, let me leave you with one last little tidbit, because I 482 00:38:58,719 --> 00:39:04,159 found this to be fascinated. Last session or the eighty seventh session, Chairman 483 00:39:04,239 --> 00:39:08,880 Dan Huberty stood up on the House floor and he was kind of grousing a 484 00:39:08,880 --> 00:39:14,440 little bit about a bill that I think Tasby had helped kill, And in 485 00:39:14,480 --> 00:39:17,880 the process of doing so, what he disclosed was that if you if you 486 00:39:17,920 --> 00:39:25,079 took every school district in the state and you combine their excess fund balances together, 487 00:39:27,199 --> 00:39:30,920 you would have about twenty one point five billion dollars in total money. 488 00:39:31,039 --> 00:39:37,400 So basically, school districts are sitting on savings accounts worth more than twenty one 489 00:39:37,480 --> 00:39:39,360 billion dollars. Now, there is, of course a little bit of a 490 00:39:39,360 --> 00:39:45,239 caveat there. TEA requires that school districts put aside about ninety days worth of 491 00:39:45,280 --> 00:39:51,440 operating expense. But even if you were more generous and you took out one 492 00:39:51,480 --> 00:39:55,039 hundred and ten days worth of operating expense for a rainy day, you would 493 00:39:55,039 --> 00:40:00,400 still have more than six and a half billion dollars in moneies that are effectively 494 00:40:01,119 --> 00:40:07,880 just kind of acting as a slush fund. And so, you know, 495 00:40:07,519 --> 00:40:13,679 really, what this signals to me is that there's an opportunity to cut taxes 496 00:40:13,719 --> 00:40:16,920 and be more efficient and do some taxpayer friendly things, not only at the 497 00:40:16,960 --> 00:40:21,960 state level, but also at the local level. I think there's plenty of 498 00:40:22,000 --> 00:40:25,320 opportunity to do that, all right, Karen, really quickly before we go 499 00:40:25,840 --> 00:40:30,159 next week. The Senate comes back Tuesday night. What are we watching for 500 00:40:30,320 --> 00:40:34,559 to see how this actually gets resolved? I guess we're watching to see if 501 00:40:35,519 --> 00:40:42,679 they if they refer the House bill to committee, if they have any discussion 502 00:40:42,719 --> 00:40:47,400 on the floor about how they might move ahead with that, if they do 503 00:40:47,480 --> 00:40:53,079 some kind of move like a journeying signy die so that the governor can just 504 00:40:53,159 --> 00:41:00,679 restart another special session, which is not outside the realm of possibility unless someone 505 00:41:00,719 --> 00:41:04,239 has the reason why they wouldn't do that, But that's you know, or 506 00:41:04,719 --> 00:41:08,960 they'll just gabble out for a few more days while they negotiate. There's the 507 00:41:08,960 --> 00:41:13,960 only thing that's gonna all right, I'm gonna I'm gonna pull a John Batten 508 00:41:14,039 --> 00:41:15,880 here, and the only thing that's gonna get us over the finish line is 509 00:41:15,920 --> 00:41:22,880 when they agree on a plan. So short of that, there's nothing that 510 00:41:22,960 --> 00:41:28,360 could happen on Tuesday that's gonna that's gonna really significantly move until until they do 511 00:41:28,400 --> 00:41:31,480 that. So well, maybe we will all spend a nice weekend to relax, 512 00:41:32,239 --> 00:41:37,039 get some rest, and we'll come back happier and and ready to negotiate 513 00:41:37,159 --> 00:41:40,800 next week. Thank you so much, James for this great conversation. Thank 514 00:41:40,800 --> 00:41:45,159 you, Karen, Thank you to our producer Justin, and thank you to 515 00:41:45,199 --> 00:41:51,559 our sponsors begin SF Railway, The Meadows Mental Health Policy Institute, dhr Health, 516 00:41:51,599 --> 00:41:55,400 and Lone Star College. We'll talk to y'all next week. Thank you. 517 00:42:01,960 --> 00:42:06,599 Join us in June for a series of events unpacking the twenty twenty three 518 00:42:06,679 --> 00:42:10,840 legislative Session. Will have conversations in Dallas, Amarillo, and Houston. Find 519 00:42:10,840 --> 00:42:15,519 an upcoming event near you at Texas Tribune dot org slash events