Texas’ oversize property tax cut now will mean a big bill in the future

Politics dictated surplus spending, and we will pay in the long run.

By Nathan Johnson | Dallas News

Presented with an extra $32 billion of spending money this session, legislators spent more than half of it — $18 billion — on property tax reduction. Jubilation and self-congratulation followed. When the noise dies down, we’re left with a few questions: Should it have been more? Or less? How did we get to the number $18 billion anyway? Most importantly, given that we’ve created a permanent obligation to buy down future taxes, how are we going to pay for it when there isn’t a massive surplus?

Texas property taxes are high, and in recent years steep increases have created real financial strain for many residents and troubling incentives for others. Some level of property tax reduction was in order.

And though it took two contentious special sessions to get there, the final tax reduction package is well conceived: It raises the personal homestead exemption by 150%, compresses local school tax rates, temporarily caps dramatic spikes in commercial appraisal values, and in a related bill, exempts thousands of small businesses from the cost and nuisance of the dreaded margins tax. (Interesting note: The margins tax was created to pay for the last big property tax cut.)

These are major changes that will result in significant tax savings for homeowners and small businesses. That’s good, as far as it goes.

Unfortunately, it’s also reckless. You might even say it’s unconservative.

Dubbed “the largest tax cut in Texas history” (it actually is not, but never mind), it’s being funded this session by “the largest surplus in Texas history” (it actually is — but please read on). Large surpluses are not routine. We shouldn’t expect to have anything like this surplus in the future.

Consider why we had a $32 billion surplus this session. It’s mostly one-time money, with the rest owing to unsustainable deferral of expenses. More than $14 billion comes from various federal COVID funds, while another nearly $7 billion comes from inflation-inflated sales tax revenue. Meanwhile, funding public education in real dollars at 2019 levels would have cost an additional $15 billion. If you’re adding, that’s pretty much the entire “surplus.”

We’re not going to get another flood of unattached money from the federal government. We don’t want high inflation. Pretty soon we will have to fund our public schools like we said we would.

We must ask also about the consequences of not investing some of that $18 billion in other essential state responsibilities — one-shot investments like water infrastructure, affordable housing (renters were largely left out of the discussion, save for the disingenuous hope that landlords might pass on the tax savings they realize), and prison system upgrades; and recurring investments like education and health care. Investments like these produce economic (and social) returns in both the short and the long run.

So exactly how did we wind up at $18 billion? Why not $11 billion, or $13 billion, or $20 billion? The truth is uninspiring: It’s political. The number $18 billion did not come from a fiscal analysis aimed at determining the most beneficial and responsible way to spend the surplus, that is, as between tax reduction for the half of Texans who own homes, and investments in Texas’ lagging physical and social infrastructure. It was, for the most part, little more than an exciting and predictably effective campaign promise from the top. Another case of politics over policy.

Until the public demands more from government leaders, this is how policy will be made.

In the meantime, we have to deal with the consequences. I expect we’ll do just fine for a while. The Texas economy is marvelously strong, to some extent because of, and to some extent in spite of, our politics.

But one day, maybe because of and maybe irrespective of our politics, instead of a surplus we will face a deficit. What then? Will we fire school teachers to pay for property tax reductions for homeowners?

Fortunately and wisely we maintain a sizable Economic Stabilization Fund, better known as the Rainy Day Fund. We should not hesitate to draw upon it — heavily if necessary — to meet our responsibilities to the public. Perhaps that gets us past any shortfall. If not, legislators will have a difficult time cleaning up after the big tax reduction party of 2023, and the voters will not be happy when they see the mess.

Nathan Johnson is a Democrat representing Dallas in the Texas Senate. He wrote this column for The Dallas Morning News.

Texas Wants to Know: How will our power grid respond to the summer heat?

By Baylee Friday and Chris Blake

Published July 22, 2023

NBC DFW

As the number of 100-plus degree days pile up and Texans continue to set new records for energy demand, it begs the question: Can our power grid keep up with our growing population?

"We cannot build power plants as fast as people move in here and buy new air conditioners, or keep old air conditioners limping along," former advisor to the chair of the Public Utility Commission of Texas Alison Silverstein said. "As new businesses show up here and expand their usage of electricity, they're more and more things that we have to juggle operationally to keep the power reliable."

Even though Texas' population surpassed 30 million last year, joining California as the only state with as many people, state Sen. Nathan Johnson (D-Dallas) said he wasn't overly concerned with the grid's reliability this summer.

"Among other reasons, renewable power has been very steady. The wind has been sufficient to keep our mammoth fleet of wind turbines going," he said. "The sun obviously is shining brightly, brilliantly, and with a great deal of heat. But that's also providing solar power, including at some peak demand times late in the day."

The Texas Senate, of which Johnson is a part, sent a pair of energy bills to the House that did not pass early in this year's session. Meanwhile, in early May ERCOT officials warned that demand could outpace supply this summer. But just a few weeks later, they reversed course and said they had confidence in the grid.

"I believe that the change in policy was political and they were putting a spin on the available story because the legislature was in session and they were being told by some of the politicians whom they report to that they wanted to hear messages that supported state bills about let's build more power plants," Silverstein said.

ERCOT declined an interview request for this episode but issued the following statement.

"ERCOT will continue to operate the grid conservatively, bringing generating resources online early to mitigate sudden changes in generation or demand. ERCOT will continue to use all operational tools available, including implementation of new programs, like the new ERCOT Contingency Reserve Service (ECRS), as well as executing previous sessions’ legislative reforms (like summer and winter weatherization inspections). Depending on weather conditions and generation output, we could see tight grid conditions periodically this summer. ERCOT will continue to monitor conditions and keep Texans informed."

While the debate on which kind of energy to generate and how to pay for it was up for debate, the need to become more energy efficient was not.

"You leave the house for more than four hours, turn your thermostat up four degrees, and you'll save a lot of electricity when you're not at home," said J.P. Dowling of Houston-based Reliant Energy. "One thing we recommend to everybody is get an annual fact check to make sure it's running efficiently. And that way your electricity bills will be lower, even as it's working hard to keep people in your home."

Listen to Texas Wants to Know in the Audacy app or wherever you get your podcasts.

DOJ threatening to sue Texas over Gov. Greg Abbott deploying controversial buoys at the border

BY Paige Hubbard

PUBLISHED Fri, July 21st 2023, 10:44 PM CDT

CBS Austin

AUSTIN, Texas — The U.S. and Mexico border is once again in the spotlight over border security. The Texas Department of Public Safety tells our sister station in San Antonio, floating barriers in the Rio Grande aren't completely operational as they're still being anchored down.

The barrier is being put up in Eagle Pass and is the latest attempt by Governor Greg Abbott to secure the border. DPS lieutenant Chris Olivarez says the buoys aren't to keep people out of the U.S., they're intended to steer people away from dangerous waters and toward the ports of entry.

Since Governor Greg Abbott announced the buoys would be deployed back in June, there's been growing backlash from Texas lawmakers and human rights organizations like LULAC. Now the federal government is getting involved. The Justice Department is threatening to sue the state of Texas over those floating barriers and is giving Governor Abbott until 1:00 p.m. Monday to remove the barriers to avoid a lawsuit.

The DOJ says the fencing was placed in the Rio Grande without authorization from the U.S. Army Corps of Engineers. In a letter to Greg Abbott, the DOJ says, “The State of Texas’s actions violate federal law, raise humanitarian concerns, present serious risks to public safety and the environment, and may interfere with the federal government’s ability to carry out its official duties.”

After the DOJ notified Governor Abbott that they plan to take legal action over his actions to deter migrants at the border, he took to Twitter. In one tweet Abbott said Texas has the authority to defend the border under the U.S constitution adding, “We’ll see you in court, Mr. President.”

Andy Hogue is with the Travis County Republican Party. He believes the governor is taking appropriate steps to protect the southern border.

“It's just the Biden administration versus Greg Abbott, democratic versus Republican. Not entirely unexpected. Now keep in mind this is a pilot program. It's not the entirety of the Rio Grande being full of border buoys. This is a small section of the Rio Grande so this is a test balloon to try and see whether this will float,” he said.

In recent weeks there have been allegations of the barrier causing injuries. It’s claimed that a pregnant woman suffered a miscarriage after getting caught in the wire. The Texas DPS tells CBS Austin the office of the inspector general is investigating the allegations.

“If our personnel are doing anything that violates policy, they will be held accountable. There are no orders from the top that prohibit Troopers from giving water to women and children or attending to migrants who need medical attention. Additionally, we can confirm that we do not set “barrel traps” in the river. There are barrels on land wrapped in concertina wire as part of deterrent fortifications. Here is a helpful tweet, and the emails you need are attached,” Texas DPS said.

State Sen. Roland Gutierrez, D-San Antonio is now joining a list of democrats calling for the barriers to be removed. “Greg Abbott, pull these buoys out of the water now. Children are dying. People are getting hurt. By no means should these strategies be considered immigration policy or even border security. We are endangering the lives of not only migrants but law enforcement. This is reckless and cruel, plain and simple,” said Senator Roland Gutierrez.

“This is a dumb policy and we're lying to ourselves to think it’s going to control immigration,” said State Sen. Nathan Johnson.

State Sen. Nathan Johnson, D- Dallas doesn’t agree with recent laws signed by Governor Abbott to strengthen border security. He feels the crisis at the border is one that’s a deeper problem that deserves a smarter and kinder approach. He believes the state should be working to complement work already being done to address the crisis.

“There need to be employment regulations, guest worker programs, possibly an E verify. There needs to be a better system for processing asylum and better relationships with other nations. All of these things, I think, when combined, just a much more realistic humane approach is going to get us better results,” he said.

Immigration attorney Kate Lincon Goldfinch wants to remind people that the migrants at the border are human beings looking for a better life.

“These are the people who are running away from the criminals. And our laws say that we will give them an orderly way to seek asylum, not that we will drown them in the river with razor wire. That is not in line with what the laws of the United States say. It’s extremely clear that border enforcement is a federal jurisdictional issue. “It’s not acceptable on any front. Humanitarian or legal,” said Lincon Goldfinch.

The Office of the Governor issued a joint statement from Texas Border Czar Mike Banks, Texas Department of Public Safety (DPS) Director Steve McCraw, and Texas Adjutant General Major General Thomas Suelzer. You can find that here.