Author:
Kris Seago
Subject:
Government/Political Science
Material Type:
Full Course
Level:
Academic Lower Division
Provider:
Austin Community College
Tags:
ACC Liberal Arts, ACC OER
License:
Creative Commons Attribution
Language:
English
Media Formats:
Text/HTML

Course Inventories

Introduction: Financing State Government

Overview

Introduction: Financing State Government

Chapter Learning Objective

By the end of this chapter, you will be able to: 

  • Analyze state financing issues in Texas

Introduction

In Texas, local governments, including school districts, cities, counties and special districts, are financed through ad valorem taxes, which multiply the appraised value of the property by a tax rate set by the governing body of the local government. As real estate values in Texas climbed after the oil bust of the 1980s, many homeowners became increasingly incensed at local government leaders proudly proclaiming that they hadn’t raised taxes while presiding over huge increases in revenue provided by rising property tax appraisals.

Conservative radio talk show host Dan Patrick was elected to the state senate in 2006, with outrage over property taxes his key issue. Senator Patrick helped pass a law creating a 10 percent cap on single-family residential property tax appraisal increases that could be realized by taxing authorities in any given year, allowing homeowners to “ramp up” to large sudden appraisal increases over time.

For the 2019 legislative session, Texas Republicans vowed to do something to curb property tax increases, even as they recognized the need to increase the state’s share of funding for local school districts. One alternative: a “tax swap” that would raise Texas’ 6.25% state sales tax rate by a penny, using that money to provide additional state money for public education and to offset required reductions in school property tax rates. Despite enthusiastic support from the “big three” – Governor Greg Abbott, Lieutenant Governor Dan Patrick, and House Speaker Dennis Bonnen, the proposal encountered stiff opposition from Republicans and Democrats across the political spectrum, and quietly disappeared from the legislature’s agenda without a vote.

How does Texas fund its state government, and how is that money spent?

Licensing and Attribution

CC LICENSED CONTENT, ORIGINAL

Financing State Government: Introduction. Authored by: Andrew Teas. License: CC BY: Attribution