By Ken Paxton, Capitol Steps
Texas has built one of the strongest economies in the nation based largely on relatively low taxation and generally limited government interference in the private sector economy. Our business-friendly and family-friendly policies have helped Texas weather the economic downturn better than every other state and have made Texas the economic envy of the nation.
In 2007, for instance, the Legislature voted to devote more than $14 billion to property tax relief over two years. This followed on the heels of the action taken in the third special session of the 79th Legislature, in which a one-third reduction of school district property tax rates by 2008 was ensured through the creation of the Property Tax Relief Fund.
In 2009, my colleagues and I resisted attempts to spend the State’s Rainy Day Fund, which has helped to maintain a high bond rating. This is critical because it keeps borrowing costs low and therefore allows the State to fund costly infrastructure projects over the long term.
While the central challenge of the 2011 Legislative Session will be to again balance the budget without raising taxes, legislators must keep their eyes on the bigger picture. Fiscally-responsible policies are what have kept Texas’ economy head and shoulders above the rest of the nation. Continuing on this path is crucial.
At its core, the system of school district property taxation remains outdated and inefficient. Continued reform and reduction of the school district maintenance and operations property tax is imperative if Texas is to remain an attractive place to own a home and start or expand a business.
Ensuring that the State’s tax climate remains strong is imperative and can be achieved by reducing the negative effects of the business margins tax. At minimum, the Legislature must make the $1 million revenue exemption permanent for small businesses and seek to protect all businesses from the worst aspect of the tax, namely high compliance costs.
In short, while Texas’ economy is among the strongest in the nation, there is still much work to be done to keep our State competitive. I look forward to beginning this process when the next Legislative Session begins in January, 2011.
Ken Paxton represents Collin County in the Texas House of Representatives.