GOP Battle Brewing Over Texas Taxes

A nasty fissure is opening in the leadership team of Texas House Speaker Joe Straus on the issue of property taxes. One House GOP committee chairman is embracing the official platform position of the Republican Party of Texas, even as another has financed a study undermining it.

Jim Keffer
Harvey Hilderbran

State Rep. Harvey Hilderbran (R-Kerrville) last month said he wants lawmakers “to begin the process of abolishing residential and commercial property taxes.” This is no doubt welcome news for many Texans struggling under one of the nation’s highest property tax burdens.

As the Texas Conservative Coalition Research Institute (an entity led by GOP lawmakers) has put it, the property tax burden “abridges private property rights: if one can never take full ownership of land or a house, the constitutional right to private property is a false promise.”

Moving Texas away from such heavy reliance on property taxes has been a key plank for conservatives for more than a decade. Like TXCCRI, the Texas Public Policy Foundation has also written extensively on the issue, providing the intellectual background for discussions in the Capitol and around the state.

Of course, the devil is in the details of which property taxes are abolished, and what – if anything – replaces those revenues.

Mr. Hilderbran has offered no immediate solution on that front, but as chairman of the House Ways and Means Committee, he would have a front-and-center seat in any such discussion.

The official platform of the Republican Party of Texas (pdf) is unambiguous. In calling for “abolishing” property taxes, the GOP says that this should be accomplished by “(s)hifting the tax burden to a consumption-based tax.”

Jim Keffer
Jim Keffer

This doesn’t sit well with State Rep. Jim Keffer (R-Eastland), who paid a lobbyist to draft a straw-man report slamming the official position of the GOP. Mr. Keffer’s study claims sales taxes would double, local control of local government be abolished, and food and medicine taxed.

Mr. Keffer and his lobbyist-prepared report offer no solutions, but their record is one of higher taxes and bigger government.

Why is Mr. Keffer fighting his party? Mr. Keffer has tried – and failed – to lower property taxes using variations of income and business taxes. He once authored legislation to impose a payroll tax on Texas, which died in no small part due to its similarities to an income tax. He later was the author of the now-imposed Gross Margins Tax – an inefficient, complicated tax that hurts small business.

Mr. Keffer claimed his tax on business would reduce property taxes. (His scheme reduced the rate but not the burden paid by most property owners.)

The official GOP platform position on Mr. Keffer’s business tax? “Repeal.”

Texans, and especially Republicans, overwhelmingly reject Keffer-style taxes on income and business. His colleagues have been listening, but Mr. Keffer clearly has not.

Mr. Keffer wants the GOP to learn to love high and growing property taxes, following the path of the Democratic Party in opposing the governor and the Republican platform. Mr. Hilderbran, on the other hand, is open to responsible – and responsive – tax policy, in keeping with the GOP platform.

With an overwhelming majority of GOP incumbents and candidates signed off on the Taxpayer Protection Pledge, as well as supporting Gov. Rick Perry’s Texas Budget Compact, there is no political appetite for new or higher taxes. Indeed, real tax cuts are what voters expect from the GOP.

We don’t have – and never really had – a “revenue problem.” What we do have is a spending problem, at all levels of government. Education spending has far outpaced enrollment growth and inflation, while general spending has grown more than twice as fast as the combined rate of population and inflation.

By putting a strong cap on spending, and dedicating future surpluses to permanent property tax burden relief while keeping the commitment to abolish the property tax, we can put the state on a sustainable path to a less burdensome place. Fiscal responsibility begins with good stewardship and an emphasis on restraining government growth.

Yet even as this battle brews in the GOP-controlled legislature, the discussion is over among voters.

Now Speaker Straus, his leadership team, and the GOP’s rank-and-file lawmakers and candidates, all must decide if they want to govern in accordance with the wishes of their voters – following their party’s platform – or be drawn away by Mr. Keffer’s opposition to meaningful property tax relief.

Rather than devote resources to straw-man studies propping-up big spending and inefficient taxes, lawmakers seeking to represent their constituents should find ways to make Texans stronger. Fixing the burdensome property tax system is a voter imperative, not a request.

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ABOUT THE AUTHOR

Michael is president and CEO of Empower Texans, and its premier project, Texans for Fiscal Responsibility. A graduate of Texas A&M, former newspaper reporter, one-time Capital Hill staffer, think tank vice president and an Eagle Scout, Sullivan is married with three children. He divides his time between the Metroplex, the rest of Texas, and Austin.

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