As Texas goes so goes the nation, it is often said in the Lone Star State and there happen to be numbers to back up this sentiment. According to Vance Ginn, economist at the Texas Public Policy Foundation, “Texas’ 1.5 million total jobs created since the Great Recession started in December 2007 is almost two times more jobs added than the rest of the nation combined.” It’s clear that Texas is important to the economic health of the nation. So it’s good news that, thanks to the pro-taxpayer policy reforms approved by the Texas legislature during its recently-concluded biennial session, Texas is poised to continue as the nation’s economic growth engine and model for fiscal responsibility.
Texas lawmakers also passed property tax relief, raising the homestead exemption to $25,000, subject to voter approval. Texas has lower taxes than most states. Despite this advantage, Texas lawmakers did not rest on their laurels this year. Instead, they used the 2015 session to improve their tax code and make their state more competitive. Lawmakers who blocked pro-growth tax cuts this year in nearby states – such as the defeat of a franchise tax phase out in Mississippi or the stalling of an investment income tax repeal bill in Tennessee – have caused their states to fall behind and only made it harder to compete with the likes of Texas for businesses, investment, and the jobs they produce.
Texas legislators also managed to keep spending in check during a session with a sizable surplus that had many lawmakers and special interests calling for a gusher of new spending. Under the state’s new budget, spending will rise at a clip below the rate of population growth and inflation. The Texas Senate approved legislation introduced by Sen. Kelly Hancock that would prevent state spending from growing faster than population and inflation. While the bill did not pass the House, it was the first time either chamber of the legislature has approved such a cap.
“I am extremely disappointed that the House did not pass this important legislation,” said Lt. Gov. Dan Patrick, whose leadership was key to passing tax relief, about the spending cap dying in the House. “However,” added Patrick, “our state’s next budget is still under the limits of population and inflation and as long as I am lieutenant governor our mission will remain to keep it under the limits of population and inflation.” This new budget proves to skeptics that not only can Texas keep the trajectory of government spending below population growth and inflation, it can prosper while doing so.
The taxpayer victories achieved this session were aided by key rules changes made at the beginning of the year. Before session, there was a two-thirds vote requirement in the Texas Senate to bring a bill to the floor. In January, Texas Senators approved a proposal by Lt. Gov. Patrick to lower that threshold to three-fifths. Thanks to this rule change, a small minority of senators were unable block tax relief this year.