From The Texas Tribune: Renewable energy proponents brace for last-minute attack on tax breaks for wind and solar

Tax breaks for wind and solar energy are discussed in the policy chapters of 2306.

- Click here for the article.

In the waning days of the 86th legislative session, as House and Senate lawmakers spend hours debating and voting on bills, wind and solar groups are watching for any last-minute attempt to make renewable projects ineligible for a local tax abatement program that benefits all types of industrial and commercial developments.

They have good reason to be on high alert.

Ahead of the legislative session, the conservative Texas Public Policy Foundation — the Austin-based policy institute that is an ideological beacon for many Republicans — launched a crusade against renewable energy subsidies at all levels of government. Locally, the foundation has zeroed in on property tax abatements granted under chapters 312 and 313 of the state tax code that cities, counties, school districts and other taxing entities have wielded for almost two decades to lure oil refineries and — more recently — wind farms alike.

The crux of the foundation’s argument against renewable energy subsidies is that they distort the electric market, leading to artificially low prices.

The billions in taxpayer-funded subsidies that have been awarded to renewable projects at the local, state and federal level — $16 billion, according to the foundation — “has allowed renewable energy generators ... to sell their electricity at whatever price they need to get it onto the market, which drives prices low, into negative territory,” Bill Peacock, the foundation’s vice president for research, said in an interview earlier this year.

Still, lawmakers are moving to renew both programs; Chapter 312 would otherwise expire this year, followed by 313 in 2022.

No legislation has been filed that would strip renewables from the abatement programs. But lawmakers always have the option of proposing last-minute amendments to bills just before the House or Senate vote on them.

And that’s what Jeffrey Clark, president of the pro-renewables Advanced Power Alliance, is expecting.
Mentioned in the article:

- 86th legislative session.
- property tax.
- tax abatements
- Texas Public Policy Foundation.
- state tax code.
- subsidies.
- Advanced Power Alliance.
- last-minute amendments to bills.
- University of Texas at Austin’s Energy Institute.
- corporate welfare.
- school districts.
- Todd Staples.
- Texas Oil and Gas Association.

From the Texas Tribune: House proposal aims to limit increases in Texas property tax bills

Some 2306 students are focusing on property tax reform for their papers.

- Click here for the article.

Saying there needs to be more transparency in how property taxes are assessed in Texas, the head of the House Ways and Means Committee unveiled legislation Friday that would reduce the maximum increase allowed in taxes on individual properties.

House Bill 15, dubbed the “Property Taxpayer Empowerment Act” and authored by state Rep. Dennis Bonnen, R-Angleton, would reduce the maximum increase in taxes for a property — from 8 percent to 4 percent. The legislation would also require local governments to annually publish a “No New Taxes Rate" — which is the rate that would raise the same amount of money as the previous year — and restrict debt service taxes to debt that has been approved by voters.

“Government only works when citizens can hold their leaders accountable, and accountability begins with transparency,” Bonnen said in a news release. “Our property tax system is needlessly confusing and discourages citizens from taking an active role in the local rate-setting process. The Property Taxpayer Empowerment Act will give Texans the information and clarity they need about their tax bill to hold local leaders accountable.”

From the Texas Tribune: Analysis: Rising local school property taxes ease state budget woes

This is good news, I guess.

- Click here for the story.

It would not be completely accurate to say billions in local school tax money is being used for general state spending.

But it wouldn’t exactly be wrong, either.

Property-rich school districts in Texas hate sending money to the state to help property-poor school districts. But the state has little incentive to change that system: Every dollar the rich districts send in is a dollar the state itself doesn’t have to spend.

The money coming in from those property-rich districts is quite a pile, too. For lawmakers writing the 2018-19 budget, that “recapture” money will increase by an estimated $1.44 billion, freeing that much state money for other general spending.

The richer school districts (“richer” here refers to the value of their real estate and not to the incomes of the residents) are sending $3.69 billion to the state in the 2016-17 budget period. The state has to use that money on public education; it’s an effort to level out the differences in how much money is available to educate kids from different parts of the state.

That said, any money that comes in from the rich districts allows the state to spend the dollars it would have spent on education on other programs and services. The numbers are rising, too. The Texas Education Agency estimates it will “recapture” $5.13 billion during the next budget period, up from $3.69 billion in the current budget.

At the same time the agency’s official budget request to state lawmakers would require the state to spend 8.4 percent less from general revenue than the current budget a drop that’s partly attributable to the increase in recapture money available to the state.

Intentionally or not, it’s a great political deal for state lawmakers. They can squawk at local school districts for high property tax rates at the same time they’re using some of that money to lower the state’s expenses for public education.

The locally raised taxes recaptured from property-wealthy districts lower the amount of state-raised money — sales taxes and so on — that have to be spent on schools. Local taxpayers, in this case, are saving state taxpayers some money.

Intentionally or not, it’s a great political deal for state lawmakers. They can squawk at local school districts for high property tax rates at the same time they’re using some of that money to lower the state’s expenses for public education. The state budget is easier to balance because of the local tax money marbled into school spending.

From the Texas Tribune: Analysis: In Texas, You Can Fight City Hall

It looks like local control will be a major issue during the next legislative session.

- Click here for the article.

“Local” might be the byword for fancy farm-to-market restaurants, but it can be a dirty word at the Texas Capitol.

The state Legislature has become the appeals court for the state’s local governments. Companies and industries snubbed by local laws are increasingly asking state lawmakers to turn things their way — and it’s working.

. . . The next tests will start when the Legislature meets for its next regular session in January. This time, one big fight involves local regulation of drivers for ride-hailing companies like Lyft and Uber. Another is a straight-up attempt by the state to limit local officials’ ability to raise taxes without voter approval.

The ride-hailing issue sets up like the fracking issue did. Austin voters were asked whether the ride-hailing drivers should pass security checks, like cab drivers do. Uber and Lyft said they would leave if voters approved the regulations, irking voters with their methods and the explicit threat. Voters backed the regulations. The companies left. They threatened to leave Houston, too, over regulations there.

Industry allies in the Legislature have promised to file a statewide ride-hailing law that doesn’t hobble the companies.

. . . The property tax proposals are the latest attempts by state officials to control local property tax increases. The state doesn’t have a property tax itself — that’s unconstitutional — but cities, counties and school districts are state inventions and are subject to state regulation and some control. And in this case, some state officials want to give voters more control over property tax increases.

That’s not how the local governments see it, however. They believe, with some evidence, that state officials just want to make it harder to raise the money they contend they need to do what their voters demand of them. Some take it further, saying the need for more tax money is driven, in part, by what the state requires local governments to do.

You might argue that the property tax debate is a case of checks and balances, of one set of elected officials keeping another set of elected officials in line. You might even be right.
Other cases — fracking, smoking, texting while driving, hailing rides, banning plastic supermarket bags among them — are efforts to replace local laws with state ones.

From the DMN: Dallas County property values see record increases. Will officials cut taxes or keep the cash?

Building of the post on property taxes below:

- Click here for the article.

Property values rose more than 10 percent across Dallas County this year, the highest jump in at least two decades.

The increases mean steeper tax bills for many property owners and unexpected jackpots for local governments, prompting debate among officials over whether to keep the cash or cut tax rates.

"Our middle class didn't get raises like this, and they can't afford these increases,"

Dallas County Judge Clay Jenkins said Tuesday. "We can always find a way to spend a windfall, but it's best in this economy for us to give people back their money."

Jenkins cited a Dallas Morning News analysis that found the rising preliminary property values increased disproportionately for middle-class homeowners. It's unclear whether that disparity remained after property owners' protests ended and many won reductions. The official numbers were released this week, though some properties remain in dispute.
The potential tax windfall far exceeds the budget predictions of many government entities, such as the county, the city of Dallas and Parkland Memorial Hospital. Dallas Independent School District, meanwhile, anticipated a greater increase.

"It's the largest increase we've seen since I have records," said Ryan Brown, the county budget director. The records date to 1989. The closest the county has come was in 2008, when values rose 9.8 percent before plunging during the recession.

This year, the average home valued at $149,000 would cost nearly $400 in county taxes alone -- an increase of $37 from last year.

Government bodies across the county will set tax rates in September.

From Watchdog: Commercial lawsuits blow back on Texas taxpayers

For our discussion of local government and taxes - who bears the burden of property taxes in the state?

- Click here for the article.

Lawsuits over commercial property appraisals are on the rise in Texas, and taxpayers are footing an ever-bigger legal bill.

In Austin, 413 lawsuits are pending against the Travis Central Appraisal District. Property owners are contesting $11.3 billion in values.

Of the nearly 4,000 cases tried in the past 12 years, commercial property owners won an overall 7.5 percent reduction in tax exposure.

In San Antonio, companies sued Bexar County over $19.4 billion in appraisal disputes last year, more than double the amount litigated in 2012. Thus far, lawsuits shaved the valuations to $17.5 billion.

The rising tide of lawsuits comes as large commercial entities contest double-digit increases in property values that produce correspondingly bigger tax bills.

The latest on budgeting in Texas

All from the Texas Tribune:

- Oil Patch Schools Facing Budget Nightmare.

In December 2014, the week Pam Seipp became interim superintendent of Runge schools, the tiny South Texas district held a symbolic groundbreaking for schools and sports facilities to be paid for by a $22 million bond that local voters overwhelmingly approved just as oil prices began to slip.

Seipp’s main responsibility since then?

“The bearer of bad news,” she says.

Four months into the job, she had to inform the board of trustees that local property values were expected to drop by more than half from the previous year because of a major slowdown in oil and gas drilling, and that the $6 million savings account the 300-student district had built up during the recent boom would quickly evaporate. She delivered a similar message this year with property values expected to plummet another 42 percent amid the lingering low oil prices that have brought drilling in the state — and across the U.S. — to a near halt.

The district is now operating on a deficit budget and moving to restructure its bond because it can’t afford payments.

“It’s not been a good experience for me,” Seipp said. “I can hardly wait ‘til they get a permanent person here.”

Runge is a worst-case example of the budgetary difficulties facing school districts in oil producing regions across the state, where a drilling frenzy raged for nearly a decade until oil prices tanked.

- State Leaders Ask Agencies to Cut Budgets by 4 Percent.

Texas' top elected officials are asking state agencies to scale back their budget requests by 4 percent, seeking to further rein in state spending for the 2018-2019 cycle.

In a letter dated Thursday, Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Joe Straus said agencies should propose the 4 percent reduction as a "starting point for budget deliberations."

"Limited government, pro-growth economic policies and sound financial planning are the key budget principles responsible for Texas' economic success," the three wrote. "It is imperative that every state agency engage in a thorough review of each program and budget strategy and determine the value of each dollar spent."

The letter hints at some priorities for lawmakers heading into next session, making several exceptions to the 4 percent cut. They include funds for public schools, border security, Child Protective Services and mental health resources. The exemptions also include public-employee pensions, Medicaid and dollars needed to meet debt service requirements for bond authorizations. Agencies are also being asked to submit information about zero-based budgeting, a practice in which all expenses must be justified in a new cycle. Patrick and state Sen. Jane Nelson, a Flower Mound Republican who chairs the Finance Committee, have been proponents of zero-based budgeting.

Overall, the letter makes a plea for holding back the growth of state government as Texas continues to deal with a downturn in the oil and gas industry.

- Analysis: No Political Benefit if Voters Can't Feel Tax Relief.

If a state officeholder of any political persuasion promises to cut your property taxes, demand proof.

They made their most recent attempt during last year’s legislative session with a constitutional amendment increasing the homestead exemption. Their hope was that school property tax bills would drop.

Voters approved the amendment in November, giving the average homeowner a $126 tax break.

Hey, if you can’t make it rain, make it sprinkle.

Lawmakers tried the rain thing back in 2006, rewriting property and franchise and other tax laws to bring relief to taxpayers.

State Sen. Paul Bettencourt, a Republican who was Harris County’s tax assessor-collector at the time, watched the benefit get swallowed by “appraisal creep” — the steady increase of property values in a booming state.

This is the problem for Texas lawmakers. They want to get a leash on property taxes statewide, even though there is no state property tax. It requires them to restrain local governments. The local governments, with plenty of evidence, point to expensive state government mandates that drive up their costs.

Your governments, taken together, operate as a circular finger-pointing squad.

From the Houston Chronicle: Texas needs to dump its franchise tax and come up with something better

Texas still doesn't know how best to tax its businesses.

- Click here for the article.

The franchise tax dates to 1907 and was premised on the idea that companies should pay something for the privilege of doing business in Texas. Over the years, it evolved into a payment made by some companies in return for state laws that limited their legal liabilities. These fees and costs were generally low and spread out across the business community.

That changed in 2006 when the Texas Supreme Court declared that because the Legislature limited what local authorities could charge in property tax rates - forcing almost all of them to charge the maximum rate - the Legislature had created a de facto state property tax. Since the Texas Constitution forbids such a thing, the court ordered the Legislature to find new ways to pay for things like schools.

The solution was a franchise tax based on margins of revenues, not on income. There are four methods of calculating the taxable margins on gross receipts in Texas, and companies are allowed to pick the one that is best for them. Unfortunately, that requires many companies to make all four calculations using an accountant with specialized training.

Compliance is therefore expensive, but the good news is that with a $1 million exemption, 94 percent of Texas companies will not have to pay any tax.

That doesn't make Texas a low-tax state for businesses, though. Businesses pay 64 percent of the taxes collected in Texas, compared with the 45 percent national average. Texas' effective tax rate on business is 5 percent, higher than the national average of 4.7 percent.

The business community let out a cheer last year when the Legislature came close to eliminating the franchise tax, but Republican Lt. Gov. Dan Patrick insisted on raising the homestead exemption on personal property taxes. Instead, lawmakers only cut the franchise tax rate by 25 percent with a promise to ultimately phase out the tax.

That was 2015, though, when 1,600 oil and gas rigs were drilling in Texas, sales tax collections were jumping and appraisal districts were raising property values at a breakneck pace. Lawmakers know 2017 will be different.

From the Texas Observer: Free Lunch

The state of Texas has a robust system of tax incentives available to local communities to lure businesses. Critics call it corporate welfare. The following article focuses on the Texas Economic Development Plan - which is also known as Chapter 313, which is where it can be found in the Tax Code.

The story concerns the efforts of business leaders to develop attract liquified natural gas exporters to the valley.

- Click here for the article.

Property taxes are the largest source of funding for Texas public schools, and big industrial projects can add lots of new money to the school system quickly. Annova’s LNG terminal alone would be worth more than the tax base of one-quarter of Texas school districts. Companies pay most of their tax bill to the local school districts. For certain big projects, though, districts can forgive most of that sum using the Texas Economic Development Act, a 15-year-old program that’s often known by its place in the tax code, Chapter 313. That program actually makes it worthwhile for school districts to give away millions in tax revenue.

Under the law, if a school district grants a tax break for a desirable new project, the state is obliged to cover the difference. The cost of the deal comes out of the state budget. In its application to Point Isabel ISD, Annova said its terminal would be valued at $1.4 billion, but wanted the school district to pretend for the next 10 years that it was worth just $25 million. The tax break, Annova told the district, would be “a key component” in its decision to build. In fact, as local activists learned, the whole point of the Chapter 313 program was to lure business to Texas that might go elsewhere. If the school board rejected Annova’s deal, maybe the company really would pack up and leave. The school board vote, then, wasn’t going to be just another sternly worded resolution — it could be, locals hoped, the Achilles’ heel that could kill the project for good.

Residents knew they had momentum on their side, having won over so many other local officials. But as they had recently learned, schools hardly ever say no to a Chapter 313 deal. No district had ever rejected one this big. In fact, the program is built to encourage schools to give away the state’s money. Schools have no incentive to reject a deal, and often gain millions by handing out tax breaks.

For more:

- What is the Texas Economic Development Act?
- Tax Code. Title 3. Subtitle B. Chapter 313.
- Texas Ahead: Tax Code Chapter 313 — Value Limitation and Tax Credits.
- TTARA: Questions and Answers About the Texas EconomicDevelopment Act: Tax Code Chapter 313.

Odds and ends for today's 2306

- Tim Cole Commission begins work, optimistic for recommendations.

Richard Miles was just 19 years old when his nightmare began. In 1994, Miles was accused of murder and attempted murder and, though he steadfastly proclaimed his innocence, he was later convicted and spent 15 years in a Dallas jail — until a court determined he was a victim of prosecutorial misconduct because his Dallas County prosecutor withheld evidence that would have cleared him.

Now 40, Miles recently told the story of his wrongful conviction to the 11 members of the newly created Timothy Cole Exoneration Review Commission, a panel named after the late Texas Tech student who, in 1986, was convicted of a rape he did not commit. Although Cole died in prison of an asthma attack in 1999 — without being able to prove his innocence — a few years later DNA evidence from the crime posthumously exonerated him.

- Group seeks to repeal ordinances regulating where registered sex offenders can live.

Forty-six small cities across Texas are facing a new legal challenge to their ordinances regulating where registered sex offenders can live, the latest development in a national trend to relax residency limitations that opponents say create more problems with ex-convicts than they solve. On Monday, Texas Voices for Reason and Justice, a statewide criminal justice advocacy group, announced that it has “initiated action to compel, through litigation if necessary,” the repeal of the ordinances in so-called “general law” cities, those with populations of 5,000 or less.

Two Bexar County cities — Balcones Heights and Hollywood Park — are among the 46 whose ordinances are being challenged. Similar ordinances exist in hundreds of larger “home rule” Texas cities, which officials say have the legal authority to enforce them. Nonetheless, several larger cities already face litigation on the issue on the grounds that residency restrictions violate the U.S. Constitution.

- Democratic Group Called iVote Pushes Automatic Voter Registration.

As Republicans across the country mount an aggressive effort to tighten voting laws, a group of former aides to President Obama and President Bill Clinton is pledging to counter by spending up to $10 million on a push to make voter registration automatic whenever someone gets a driver’s license.

The change would supercharge the 1993 National Voter Registration Act, known as the “motor voter” law, which requires states to offer people the option of registering to vote when they apply for driver’s licenses or other identification cards. The new laws would make registration automatic during those transactions unless a driver objected.

- Straus Forms Select Committee on Mental Health.

Texas House Speaker Joe Straus announced Monday he's formed a select committee on mental health to take an all-encompassing look at the state's behavioral health system. 

The committee will review and make recommendations on issues including substance abuse, care for veterans, identifying illnesses early and improving delivery of mental health care, the speaker said in a news release.

“We have taken some major steps to address the state’s mental health needs,” said Straus, R-San Antonio. “It’s important not to look at these issues in isolation, but rather to take a comprehensive view of how to improve the system. Many legislators asked that we take a closer look at various issues related to mental health, and it became clear that one committee should look at all of those issues together.”

- Lopsided election puts political target on property taxes.

When property tax relief was approved by 86 percent of voters in last week’s election, you can bet Texas politicians noticed.

Calling the lopsided result a mandate for additional action, Lt. Gov. Dan Patrick vowed to make property tax reform a priority when the Legislature convenes in 14 months. Any reasonable idea will be on the table, Patrick said, although his initial concepts focus on reining in budget increases for local governments, particularly cities and counties.

“I have the opportunity to put my shoulder behind those issues and push, and I don’t intend to sit on the sidelines,” said Patrick, a Houston Republican. One important idea, Patrick said, is to require a rollback election if city or county property tax revenue grows by more than 4 to 6 percent, though the final trigger number will need to be refined. Currently, tax-rollback elections are possible with 8 percent increases, and only if 7 or 10 percent of registered voters sign a petition, depending on the size of the budget.

From the Texas Tribune: Property Tax Relief Comes With Big Cost to State

A series of measures limiting the ability of local governments to collect property taxes may lead to an increase in sales taxes. The author is critical of Proposition One - the first of the proposed amendments to the Texas Constitution to be offered to the voters next month.

- Click here for the story.

If history is any guide, Texans will overwhelmingly approve a state constitutional amendment on Nov. 3 aimed at providing them some relief from rising property taxes.

But the expected savings on homeowners’ property tax bills, estimated at $126 on average, comes with a trade off: a permanent increase in state spending. Texas lawmakers will budget $600 million annually to cover the loss of revenue to school districts, which rely heavily on property taxes. That’s on top of about $8.4 billion already in the state budget each year to make up for three previous property tax relief measures implemented since 1997, according to the Legislative Budget Board.

All together, the state will be spending about $9 billion a year to offset property tax relief measures, or more than eight percent of the budget Gov. Greg Abbott signed in June.

“In many regards, we are creating a double taxation,” said state House Ways and Means Chairman Dennis Bonnen, R-Angleton. “Most Texans aren’t going to see a reduction in their property tax at home and they are now and forever going to pay $600 million a year for this homestead exemption to the state.”

Bonnen was openly critical of property tax relief efforts throughout this year’s legislative session. Faced with strong interest among lawmakers to address fast-rising property tax bills, he ultimately backed a pared-down version of the Senate's proposal as part of a larger tax cut deal.

Random items related to the Texas Legislature

All from the Texas Tribune:

- Long Legislative Road for Voucher Bills Begins.

A preview of the looming battle over school vouchers played out Thursday as a state Senate panel considered two proposals to provide state financial support to parents who want to send their children to private schools.

Debate focused on how to ensure taxpayer funds are well spent at participating private schools as lawmakers traded questions over whether such plans would improve education in the state.

- District Attorneys' Report: Misconduct Exceedingly Rare.

In a report issued Monday morning, an association representing Texas prosecutors disputed what they say are illegitimate claims of rampant prosecutorial misconduct without accountability.

“It’s just not true,” said Rob Kepple, executive director of the Texas District and County Attorneys Association.

The association spent months reviewing 91 Texas cases in which the Northern California Innocence Project in a Marchreport identified prosecutor error or misconduct. The TDCAA said it discovered only six instances “in which a prosecutor arguably engaged in deliberately dishonest or fraudulent conduct that produced unjust results.”

Kepple said the Innocence Project report was “replete with errors” and called it “really kind of embarrassing from a scholarly aspect.”

Cookie Ridolfi, founder of the Northern California Innocence Project, who researched the Texas misconduct data, said she stood by the organization’s findings.

- Ethics Bills Draw Ire of Conservative Activists' Lawyers.

Lawyers for some of the state's most influential conservative groups voiced bitter opposition late Wednesday to several proposals to reform Texas' campaign finance laws, arguing the bills would only make a broken system worse and trample First Amendment rights.

Anticipating the backlash, state Rep. Sarah Davis nodded to the tough crowd after presenting her House Bill 22, which would overhaul the Texas Ethics Commission, particularly to beef up its enforcement authority.

"I love agreed-to bills, but I have a feeling there is absolutely no change that comes before this committee that contains the words 'Texas Ethics Commission' that Empower Texans would not just immediately oppose," the West University Place Republican said, referring to the conservative group that has come under scrutiny by state campaign finance regulators. "But I'm happy to work with them."

The late-night meeting of the House State Affairs Committee offered the latest snapshot of the intense, organized scrutiny some lawmakers face as they put a renewed focus on ethics reform. Gov. Greg Abbott elevated the issue last month by naming it one of five emergency items, and some of the ideas before the panel Wednesday were similar to what he has called for.

- Senate Passes Patrick's Tax Cut Package.

The Texas Senate on Wednesday approved Lt. Gov. Dan Patrick’s multibillion-dollar tax relief package to cut property and business margins taxes, tossing the ball into the House's court.

"Rather than spend excess revenue, the Senate has voted to return $4.6 billion to Texas homeowners and businesses over the next two years," Patrick said in a statement.

The biggest piece of that package, Senate Bill 1, authored by Senate Finance Chairwoman Jane Nelson, R-Flower Mound, passed the Senate 26 to 5. The bill devotes about $2.4 billion to increase homestead exemptions from school property taxes.

- Senate's Property Tax Cut May Stall in House.

While the Texas Senate easily approved a $2.4 billion plan to provide property tax relief to homeowners Wednesday, the measure may lose momentum when it reaches the House, where leaders appear more interested in cutting the sales tax.

“We’re going to present our plan here soon, and you’ll see what we’ll be driving for,” House Ways and Means Committee Chairman Dennis Bonnen, R-Angleton, said. “I think it’s fair to say at this time that we’re focusing on taxes that will have a more meaningful impact on growing the Texas economy, and property tax cuts are not part of the plan.”
Bonnen said he will publicly present his full proposal for tax cuts early next week.

Earlier this month, he filed three tax cut bills, two similar to Senate proposals to cut the margins tax paid by businesses, and a third that would cut the state sales tax.

Catching up with tax proposals in the Leg

We'll build this up over the semester. Tax reform is on the minds of people in the legislature - as well as the governor. Here's what's being written about the various proposals so far:

- Support builds for plan to boost TxDOT funding with vehicle sales tax revenue.
- House leaders: Texas tax cuts could top $4 billion.
- Lawmakers Want Property Tax Cut That Folks Notice.
- Texas House leaders say they can top Senate in tax relief.

I'll add to this over time.

From the Texas Tribune: A Big Idea, With a Big Price Tag

In 2306 we just finished looking at tax policy in Texas. Here's a story that foreshadows a looming fight between those who see property taxes and those who see sales taxes as the best way to collect revenue. The forces opposing property taxes have been gaining steam in the state:

- Click here for the story.

Property taxes are easy to hate, and Texas property taxes are high enough to turn this civic irritation into a full-blown political issue.

So it makes news when a candidate for comptroller of public accounts — the state’s tax collector, treasurer and all-around ace of finance — is running around saying he would like to get rid of property taxes.Glenn Hegar, a state senator who won the Republican nomination for comptroller in this month’s primary, was unequivocal in his remarks about the fairness of those taxes at a Tea Party forum in February, as reported by the Killeen Daily Herald: “As long as we pay taxes we have to ask, do we really own our property?”

His opponent, Mike Collier, a Democrat, is trying to turn a 26-second video snippet of Hegar suggesting an end to property taxes into a fundraising and vote-getting machine. He contends that the Republican is proposing a sharp increase in sales taxes to offset the elimination of property taxes.

Hegar, who has been in the Legislature since 2003, is not running away, other than to say he might phase out the tax instead of ditching it all at once. “I have said since I first ran that I preferred a consumption tax,” he said this week. “I have not backtracked in any way from any statement.”

The idea of eliminating property taxes falls nicely in line with some of the original leanings of the Tea Party, which began with concerns about government spending, debt and taxation. It rolls easily from a political tongue: Kill property taxes and rely instead on consumption taxes, which taxpayers control by simply controlling their spending.

And it is not a fringe idea, unless you consider the Republican Party of Texas part of the fringe. “Abolishing property taxes” and “shifting the state tax burden to a consumption-based tax” are the first two items listed under the “State Tax Reform” heading in the party’s current platform. There’s a line at the bottom of that list to prevent the state’s real estate agents from jumping out of their seats, proclaiming the party’s opposition to “all professional licensing fees and real estate and similar transaction fees or taxes.” The party is also against the creation of a state property tax (current property taxes are local) or a state income tax.

Property Tax Revenues Decease

As housing prices decrease, tax assessments decrease as well. More property owners are challenging their tax assessments and succeeding given the declining economy. But this raises questions about the ability of local governments to collect the revenue necessary to provide essential services like police and fire protection, road and sewer maintenance, trash collection and the other housekeeping activities local governments perform.

The tax appeals and reassessments present a new budget nightmare for governments. In a survey conducted by the National Association of Counties, 76 percent of large counties said that falling property tax revenue was significantly affecting their budgets, said Jacqueline Byers, the association’s research director.

Officials in some states say their property tax revenue is falling for the first time since World War II.

The recession has already taken a significant toll on states’ budgets, as rising joblessness, a weak business climate and a drop in consumer demand have cut sharply into receipts from taxes on sales, personal income and business earnings.

The pain at the state level is trickling down to county and local governments. To compensate, about 10 percent of large counties are raising the tax rates associated with home values to minimize the revenue loss, the county association said.

Two consequences seem to follow from this, neither good for the still declining economy. As cities cut costs they will cut workers -- or the hours they work, which contributes to the worsening unemployment rate and the accompanying drain on services that comes with it. And as tax rates increase, money that could circulate in the local economy will instead go to local government.

But the dilemma is that if services are cut, the infrastructure that allows the local economy to function efficiently will crumble, which also contributes to an increasingly declining economy. Recessions are not fun.

For informational purposes, this paragraph does a great job of outlining one of the difficulties the American federal system has in establishing a coordinated strategy for dealing with the problem. It is not a coordinated system to begin with:

Property taxes are meted out by a disparate patchwork of cities, towns, counties, and school and fire districts, all with their own rules. Because tax formulas vary widely county to county, not every decrease in assessed values automatically lowers a household’s property taxes.