The Texas Senate’s rejection of the much-hyped proposal by the governor, lieutenant governor, and speaker of the House to ask voters to approve a 1-cent increase in the state sales tax has produced what passes for high drama in the Capitol. The Senate’s outright rejection of an approach promoted by its presiding officer, Lt. Gov. Dan Patrick, only worsened the already obvious problems in the House, where Democrats are publicly unified in their opposition amidst lower-key but palpable skepticism among House members who have to run in GOP primaries next year.
However melodramatic the Legislature’s rejection of the sales tax proposal may seem, voters clearly telegraphed their distaste for increasing sales taxes in the February 2019 University of Texas/Texas Tribune Poll. Those attitudes weren’t very surprising then, and it shouldn’t be surprising now that state legislators, whatever the mixture of carrots and sticks being deployed by their leadership, are not keen to follow.
It’s fair to recognize that, however ill-conceived the politics of the approach, the promises leaders have been making since shortly after the November elections to address the big issues — property taxes and education — require navigating a very difficult public opinion landscape. Texans think property taxes are too high, and spending on public education is too low. But raising the sales tax gets a frigid reception when it comes to considering new sources of revenue. How frigid? Just as icy as the response to creating a state income tax, which is about as cold as it gets in Texas.
Raising the sales tax was the least popular possibility among seven potential revenue sources to pay for an increase in education funding (tied for last for last with creating a statewide income tax). Only 16 percent of Texans, and only 12 percent of Republicans, said that legislators should even consider increasing sales taxes to fund public education. Democrats, likely cued by the question’s explicit connection to education, still registered only faint support as a group (21 percent). Democratic support can only be expected to decrease as Democratic legislators and opinion leaders continue to come out in opposition to the approach — especially as efforts to gain GOP support led to 100 percent of the funds being earmarked for property tax reform. (Early proposals, designed to attract Democrats, would have reserved some of the revenue for public education).
But when it comes to attempts to address property taxes, there are clear political hazards to relying solely on slowing growth in local tax revenue. Legislation limiting future growth of property tax revenue does nothing to address Texans’ current property tax bills, and a majority of voters (58 percent) say that Texans currently pay “too much” in property taxes. But even more problematically, when asked about the effects of bills like House Bill 2 and Senate Bill 2, which would require voter approval for tax increases greater than 3.5%, a majority of voters also expressed the mistaken belief that it would reduce their current property taxes.
If they sound confused, that’s because these issues are mostly opaque to voters. That common confusion isn’t surprising when many in the GOP leadership have been promising to reduce property taxes. Given the volume and stridency of these promises, voters might be forgiven for expecting the Legislature to address the property taxes they currently pay. While leaders have periodically attempted to clarify what they are and aren’t promising — for a recent example, see House Ways and Means Committee Chairman Dustin Burrows layout of the HB2 on the House floor — we shouldn’t be surprised that voters expect politicians who loudly and frequently say they feel taxpayers’ pain to actually do something to reduce that pain.
The sales tax swap was introduced by the Big Three as a means to pay for meaningful, noticeable property tax reform and, at the same time, increased public school spending. For all the confidence projected by the governor, lieutenant governor and the speaker as they unveiled the sales tax increase to a skeptical Capitol (in April!), it’s an open question whether this was a spectacularly failed play, or a stalking horse meant to force the kind of solution that’s currently emerging. It was probably something in between, especially since this plan had three parents, and there is no guarantee that everybody’s motivations or expectations were the same. They may still be going to breakfast in May, as Speaker Dennis Bonnen joked at last Friday’s shore-up-some-support news conference, but that doesn’t guarantee that everyone’s dining from the same menu.
As the morass of conflicting and sometimes contradictory impulses that shape public opinion meet the various components of Texas’ Rube Goldberg structure of public school finance and taxation, we shouldn't be surprised that the mechanisms of representative government as deployed in the Legislature don’t provide a textbook study of successful problem-solving. It’s also fair to acknowledge the public’s frequent lack of interest in accepting trade-offs as voters form opinions about complex issues based on limited information and even more limited attention spans. But it’s also the job of elected officials in this particular system of government to manage those conflicting preferences. We may never find out whether the sales tax idea was a doomed but sincere effort to provide leadership, or just a means for getting to yes on a significant, if incremental, set of measures that saves face for everyone involved, particularly the GOP leadership.
We do know that in setting expectations, state leaders tapped into, and then amplified, public expectations that they may be structurally unable to meet without taking risks even bigger than a penny increase in sales tax.
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