State should return excess tax revenue

Published 11:49 pm Wednesday, April 9, 2014

Here’s a novel idea. If Texas is truly facing a

surplus of revenue in the next biennium,



maybe lawmakers should give it back.

That’s the case being made by the Texas

Public Policy Foundation, which is proposing a

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“Sales Tax Relief Fund,” a temporary reduction in

the state sales tax rate.

“The Texas comptroller’s recent estimate of a $2.6

billion surplus for the 2014-15 biennium is both a

clear indication that Texans are taxed too much and

an opportunity for the Texas Legislature to help Texans

realize those dreams by reducing the state’s tax

burden,” the Foundation’s Arlene Wohlgemuth wrote

in the Austin American Statesman on Sunday. “Returning

tax money to overtaxed Texans so they can

build their dreams is the right thing to do.”

The state could do so, easily, by lowering the state

sales tax.

“Creating the Sales Tax Relief Fund would mean

a noticeable and real reduction in the state sales tax

that benefits all Texans,” Wohlgemuth said. “It’s important

that our neighbors and communities keep

more of what they earn.”

Such a fund also would serve another purpose —

it could help end the bureaucratic practice of spending

every available dollar.

“If every penny of tax revenue is spent, legislators

will risk having to raise taxes during tough economic

times to balance the budget, rather than allowing

Texans to keep their hard-earned dollars,” Wohlgemuth

noted. “This is contrary to the conservative fiscal

policy approach that advocates for pro-growth

policies. It also lets people, rather than the government,

keep more of their money.”

Lawmakers will be sorely tempted to spend that

surplus when they convene in January 2015. We have

undeniable infrastructure needs, sputtering transportation

funding, and calls for more spending on

education.

Some commentators are already calling on legislators

to spend the surplus, rather than send it back

to the taxpayers.

“I’m a little stunned that the Texas Public Policy

Foundation wants the Legislature to create a new

fund next year to hold unspent state tax dollars,”

said Jim Mitchell, of the Dallas Morning News.

“This proposal is short-sighted, even though the reduction

would save a typical household a couple

of hundred dollars a year and more if they happen

to make a really big-ticket purchase like a new car.

But Texas is a growing state and still has a leaky

roof and a bum hot water heater. Education and

transportation funding remain woefully inadequate,

and that is just the top of a long list of home

repairs.”

Mitchell calls for legislators to “invest” in the future,

rather than return money to taxpayers.

Lawmakers should resist this temptation. Our

transportation funding system needs reform, not just

more dollars. The gasoline tax hasn’t kept up with

our needs — mostly due to people driving less, and

cars getting better mileage. The gas tax should be

fixed, not merely augmented from the general fund.

Similarly, education funding should be reformed,

not simply increased.

Sure, it’s harder to reform spending that to just

spend more. But the Texas Legislature should follow

the Foundation’s advice, and give our money back.