TEXAS VIEW: How would you spend $ 16 billion?
For a state whose leaders seem delighted to constantly thumb their noses at Washington bureaucrats, Texas certainly seems comfortable living off the federal allowance.
The last time a recession hit in 2009, the state used billions of dollars in federal aid to maintain government services and pay off debt, allowing Texas years later to indulge in its past. favorite time: reduce taxes.
With $ 16 billion in federal stimulus money left untouched in state coffers – thanks to the US bailout package, which Congress passed in March – and a general revenue surplus, the state has an opportunity to be much more ambitious in its recovery from the pandemic.
Governor Greg Abbott has decided to use the Third Special Legislative Session to finally decide how this money will be allocated.
He didn’t ask regular Texans what they’d like the money to be spent on, but the Dallas Texas 2036 nonprofit did in a recent poll. It found that a large majority of voters polled supported targeting long-term and long-awaited infrastructure solutions – from providing cleaner drinking water to extending high-speed internet access to modernization. state parks.
Advocacy groups are also setting ambitious targets for federal aid, including housing assistance, increasing public funding for education, and early childhood education.
Unfortunately, anyone with lofty goals for the one-time windfall of federal aid will likely be disappointed.
Judging from the bills that have already been tabled, the legislature appears to have much less ambitious plans, such as giving temporary property tax relief to homeowners and using almost half of it. federal aid – $ 7.2 billion – to shore up the state’s depleted UI trust fund. .
Texans who launder at any hint of federal overruns will be happy to know that this money comes with few strings attached. The US bailout specifically allows funds to be used for all expenses incurred by the COVID-19 pandemic, including those involving medical treatment and public health, the economy and those “reasonably necessary for the function of government “.
Bypassing government spending is a great accounting trick when funds are available. But when the well of federal money dries up, if there is no plan to add more revenue – don’t count on a tax hike with Republicans controlling the legislature – the state will find itself once again. more with a gaping deficit.
Sadly, old habits die hard. The legislature is eager to, in the words of State Senator Paul Bettencourt, “give back to the taxpayers”, even if such a gift would ultimately be fleeting.
Bettencourt’s bill would use at least $ 2 billion of state general revenues to reduce the “maintenance and operation” tax rates of school districts over the next two years – meaning that the owning a $ 300,000 home, roughly the median price in Texas, would pay, on average, $ 200 less in property taxes. While the bill does not dive straight into the $ 16 billion, budget experts believe the legislature would not consider cutting taxes without federal funds as a safety net.
Another bill tabled last Thursday by State Senator Jane Nelson, R-Flower Mound, would concern the state’s unemployment insurance trust fund, depositing $ 7.2 billion in federal aid to replenish the fund after it was depleted when the pandemic hit. While it is essential that Texas keep the trust fund fully funded, a one-time infusion of federal funds will simply allow the legislature to continue to underfund it for years to come.
A 2020 US Department of Labor analysis ranked Texas 50th out of 53 states, districts, and territories in terms of unemployment funding. The state intentionally keeps the fund to the bare minimum to avoid tough decisions about raising taxes. The legislature even proceeded to – again – reduce the amount that businesses should have paid in unemployment taxes this year. It would be tax misconduct to use federal funds to cover these missteps without a long-term plan to maintain the fund’s solvency.
These misguided bills underscore just how detached conversations in the halls of the Capitol are from the needs of the people they are charged with spending taxpayer money on.
If the legislature insists on quick hits, let it go to those who need it most while seeking long-term solutions. New York has allocated $ 100 million in federal assistance to provide small business loans. Louisiana implemented a $ 50 million program to grant one-time risk premiums to essential and frontline workers. Texas could use the money to fix its broken foster care system, where 23 children have died since 2019. The state could finally keep its promise to repair and expand its state parks, a magnet for the nation. tourist activity. It could even increase public funding for education, as Texas is still well below the national average for per student funding and teacher compensation.
Too often, lawmakers tell us Texas doesn’t have the money to do these things, only to see Abbott on a whim to raise $ 2 billion for border security by simply moving the money and borrowing from other state agencies. Having this additional federal money is an opportunity for Texas to grow its economy beyond its pre-pandemic status, allow more Texans to share in prosperity, and ensure that fewer families live in the country. limit when the next recession hits. We cannot let Austin fans waste it. Call or write to the governor and your representatives and tell them how you want the money to be spent.