One of many government programs that many Texans have no clue exists is the Texas Enterprise Fund. Millions of tax dollars are distributed from this program, yet it never receives much attention from the public. The program is administered via the Office of the Governor and according to the website:

“The Texas Enterprise Fund (TEF) awards “deal-closing” grants to companies considering a new project for which one Texas site is competing with other out-of-state sites. The fund serves as a performance-based financial incentive for those companies whose projects would contribute significant capital investment and new employment opportunities to the state’s economy.”

Their definition is chock full of bureaucrat euphemisms such as “deal closing grants” and “performance-based financial incentive” but TFR is not afraid to call those euphemisms what they really are –  corporate welfare. These subsidies are given to many large corporations at the expense of both taxpayers and small businesses. As a matter of fact, according to the guidelines established under the TEF, small businesses are explicitly excluded from getting any of the corporate welfare. Rules to be eligible include:

• The site must be in competition with other state corporate welfare programs
• Must include 25-75 full-time employees
• The company must operate in an “advanced industry

Just based on these guidelines alone, most small businesses are immediately ruled out from consideration. These are businesses that not only help contribute taxes to help pay this corporate welfare but also were many of the same types of businesses that were shut down (many permanently) in the wake of executive orders and directives administered by Texas Governor Greg Abbott himself in 2020 in response to the COVID-19 pandemic.

Since its inception in 2004, the Texas Enterprise Fund has given out $700,000,000 in corporate welfare to large, small business crushing, corporate entities. This includes mega-corporations like:

• Raytheon
• Home Depot
• JP Morgan Chase
• Bank of America
• T-Mobile
• Lockheed Martin
• Caterpillar
• Facebook
• 3M
• Visa
• Apple
• Merck
• and Many, Many More

Many of these companies such as Facebook have been caught both canceling conservative voices and donating to opponents of conservatives. Facebook also actively helped advocate against former President Trump in the 2020 election. Why is Texas giving your tax dollars to ‘woke’ corporations that actively oppose your values? The same government that put many small businesses out of business, making it nearly impossible for many hard-working Texans to put food on the table, is giving welfare to multibillion-dollar corporations that don’t need a dime from taxpayers.

TFR asserts that this immoral and unjust program must be eliminated forever so that taxpayers are not forced to fund their own demise. Corporate welfare is a socialistic idea that harms free enterprise, harms taxpayers, and harms small businesses. No politician that calls themselves conservative should continue to allow the Texas Enterprise Fund to remain in existence.

Recently Truth In Accounting released their most recent Financial State of the Cities for 2022. This report analyzed the financial health of the top 75 cities in America during the COVID-19 pandemic. “The report found that 61 cities did not have enough money to pay all of their bills. Despite receiving federal assistance from the CARES Act and other COVID-19 related grants, the majority of cities’ finances worsened. Total debt among the 75 largest U.S. cities amounted to $357 billion at the end of the fiscal year 2020, which was $23.5 billion worse than the last fiscal year.”

Cities being worse off than preCOVID despite billions in aid and grants is a worrisome fact, but this was taking into account all of those big leftist cities, right? Surely in Texas, we faired better since we are a bastion of conservative principles and fiscal responsibility! Would it surprise you to know that every single one of our six most populous cities is insolvent? Dallas, Fort Worth, Houston, Austin, San Antonio, and El Paso could not pay their bills right now if asked to do so. Truth In Accounting labels cities that do not have enough money to pay their bills as “sinkhole cities.” They then take the total burden owed and divide it among the estimated taxpayers in the city, to show the burden carried by every citizen. Here are the burdens that each taxpayer in these Texas cities owe:

• San Antonio (32nd) – $1.48 billion in debt (-$3.1k/taxpayer)
• El Paso (40th) – $977.5 million in debt (-$4.9/taxpayer)
• Ft. Worth (52nd) – $2.5 billion in debt (-$9.3k/taxpayer)
• Austin (55th) – $3 billion in debt (-$10.3k/taxpayer)
• Dallas (58th) – $5 billion in debt (-$12.7k/taxpayer)
• Houston (60th) – $8.98 billion in debt (-$13.2k/taxpayer)

If we add all 6 of these cities’ total indebtedness the figure is roughly $22 billion in debt. Considering the last Texas budget was $248 billion for the biennium this means that just our top 6 cities are carrying debt equivalent to 9% of the entire state budget. This is a disturbing revelation that separates how the state budgets versus how our cities budget. Local debt is out of control in Texas and must be reigned in. This can be done legislatively in the next session and TFR will soon be offering solutions on how to run fiscally responsible cities that are accountable to taxpayers.

It is worth noting that Texas did have two “Sunshine Cities” in the report. These are cities that have enough money to pay their bills. The two Texas cities that were honored for their fiscal responsibility were:

• Plano (4th) – $233.2 million in surplus ($2.7k/taxpayer)
• Corpus Christi (11th) – $72.9 million in surplus ($800/taxpayer)

Texas taxpayers can never hope to achieve victories on things like eliminating property taxes that depend on things like cutting spending when there are such egregious budgeting shortfalls from our biggest cities. The fiscally irresponsible policies of our cities must be dealt with and they must be held accountable for their actions. Taxpayers do that at the ballot box. The first opportunity is coming on March 1st in the primary elections. TFR has created the Fiscal Responsibility Index that identifies how fiscally responsible your state lawmakers are. We encourage our subscribers to use this resource and share it with family and friends to aid in your decision casting your primary ballot. Together we can turn Texas and its cities into an example of responsible governance and fiscal policy!

On January 13, the True Texas Project hosted a Gubernatorial Forum for Republican Candidates for Governor. Among the attendees were former Republican State Sen. Don Huffines, former Florida Republican Congressman and former Republican Party of Texas Chairman Allen West, and conservative humorist Chad Prather. The incumbent Governor, Greg Abbott was not in attendance.

Several questions were asked as a part of the forum including some pertaining to property taxes, a ban on taxpayer-funded lobbying, and government spending. The following is a summary of the responses on the topic of government spending and part three of three in this series:

Cutting Government Spending

Question posed:

“How do you propose to cut the budget?”

Allen West

The first to answer was former Republican Party of Texas Chairman Allen West. He said,

“Number one, we have to go from a baseline-budget system to a zero-based budget system. The other thing is we have to start looking at all of those Sunset Advisory Commission recommendations that have been given to the government, and the thing is that those are just recommendations, they go then to the next legislative session and what do you see happening in most of these legislative sessions? They don’t implement those recommendations and so that is what I want to do, and including in the very first budget that I propose and get these legislators to understand that we are going to be serious about cutting spending here in the Texas state government.”

West continued,

“You know we talk about the budget surplus that we have but really Texas is running about a one-hundred and seven billion dollar ($107B) debt because we are not taking into account the unfunded mandates, the liabilities, the pensions, the things of this nature. We saw what happened up in Dallas, Texas where they did not account for the police pension funds and they had to try to go down to the state government to get them to backfill them. We don’t want to see that happen here in the state of Texas, so we have this Sunset Advisory Commission, we need to look at those recommendations, we’ve got to move away from this baseline budget system, to a zero-based budget system, and it starts with a budget that I will propose, that I will put out there, that will show that I am serious about cutting the spending and not the rate of the increase of the spending.”

Don Huffines

Former Republican State Senator Don Huffines was next to answer,

“Government never has enough of your money. Never. Well, the first thing that we need to do is to make sure that they don’t get it. It’s not how much revenue they bring in, it’s about how much money they are spending. It’s all about the spending. So look, we are going to cap it, when I do my property tax, ninety percent (90%) of that revenue growth is going to be used to buy-down property tax, that alone will eliminate a lot of excess government. The other thing that we need to think about is illegal immigration, how much we are spending on illegal immigration. Most Texans don’t realize that we have been educating hundreds of thousands, the estimates are four-hundred to six-hundred thousand kids, and our government school system, for two or three decades, and they are English as a second language, that’s fourteen thousand dollars ($14,000) a kid, thats six billion dollars ($6B) a year that you are spending for children that aren’t supposed to be here. When I secure the border, which I am going to get done in thirty (30) days, and I am the only person that is ever going to make sure that happens, I’m the actual Republican that is actually going to do something, I’m telling you, we are going to save so much money, healthcare, incarceration, health and human services.”

Huffines continued his response,

“Right now,  eighty percent (80%) of the Texas budget is two buckets, education and health and human services. Everything else is twenty percent (20%) of that. Well imagine if we got rid of illegal immigration, and all of those kids went home. I’m going to have an e-Verify law that’s the toughest you have ever seen. I’ve already got it written. If you employ one person, one person, you are going to have to get e-Verify done. And then we are going to modify it to get a Texas e-Verify system. We are going to get the illegals out of our colleges, where they get in-state tuition, and they are taking chairs away from your children. That’s costing us millions of dollars. We are going to get rid of the Enterprise Fund, the Governor’s personal slush fund to pay Facebook to come to Texas, and we are going to give that back to taxpayers.”

Chad Prather

Conservative humorist Chad Prather was last to answer the question,

“The government is going to spend exactly what you give them. They are going to find ways. As I said earlier, the Operational Fund Transfers, if this agency is running out of money, then they are just going to transfer it from over here, they are not going to give you a refund, so we have got to stop the money that we are giving them. We’ve got to disincentivize them from spending, so I agree with that, when it comes to illegals that are coming across the border, the healthcare, the welfare, the education, all of these things that we are spending, that’s just a perfect example, but there are one-hundred seventy four (174) state agencies typically in the state of Texas, there is more now with the Coronavirus pandemic, and there are so many of those that need to be gone, they need to go away, they don’t serve any purpose. One is the TABC (Texas Alcoholic Beverage Commission). The TABC is just a long arm of the law, it’s another big government form for the Governor to reach out and penalize you in a certain way. You can roll that over to the Department of Licensing and Regulation, and we don’t need another law enforcement arm like the TABC. We can go down the list, we can roll these things into other things, we’ve got to get the government out of our lives, we’ve got to make it smaller if we are ever going to consider Texas great again.” 

Incumbent Governor Greg Abbott

Abbott was not in attendance at the forum but as he has been elected since 2015, he has a record we can review. 

Since first being elected in 2015, the amount the state appropriates to fund the government has grown almost $50B to nearly $250B as approved by the state legislature for the 2022 and 2023 biennium.

Part One: Republican Gubernatorial Candidates on Property Taxes
Part Two: Republican Gubernatorial Candidates on Banning Taxpayer-Funded Lobbying

During this last session, there was a major push to ban the practice of taxpayer-funded lobbying that fell short. This was spearheaded by Senator Paul Bettencourt (R-Houston) and his bill SB 10. This issue was one of the Republican Party of Texas’s legislative priorities for the 87th legislative session, but as with many of the priorities, it came up short despite Republicans holding majorities in both chambers. All of this happened in spite of the fact that almost 95 percent of Republican primary voters voted in favor of a ballot proposition in 2019 in support of a ban and despite polling provided by the Texas Public Policy Foundation and WFAA that showed nine out of ten Texans also supported the ban.

The practice of taxpayer-funded lobbying is when local governments use tax dollars to hire lobbyists, that in turn go lobby for more tax dollars. It is common practice for these lobbyists to receive preferential treatment by committees and lawmakers over the citizens they represent. Texas taxpayers see this as a huge conflict of interest, using our money to go lobby for more of our money… It just seems immoral, doesn’t it? The practice is commonly used by cities and ISDs to lobby against the interest of taxpayers. Before winning governorship Greg Abbott was openly opposed to the practice.  Greg Abbott, in 2013 proclaimed:

“Another practice at the Capitol that must end is using tax dollars to hire lobbyists to lobby for school districts or school boards,” Abbott told those gathered at the North East Tarrant Tea Party, the precursor to TTP, eight years ago. “Using your money to lobby for more of your money is a conflict of interest, and that practice must stop.

However, Abbott has been pretty silent on the issue in recent years. It was not part of his agenda for any of the last few legislative sessions. With top Republicans ignoring taxpayers’ demand for fiscal reforms like property tax elimination and banning taxpayer-funded lobbying will taxpayers send a message this primary?

We will see on March 1st.

On January 13, the True Texas Project hosted a Gubernatorial Forum for Republican Candidates for Governor. Among the attendees were former Republican State Sen. Don Huffines, former Florida Republican Congressman and former Republican Party of Texas Chairman Allen West, and conservative humorist Chad Prather. The incumbent Governor, Greg Abbott was not in attendance.

Several questions were asked as a part of the forum including some pertaining to property taxes, a ban on taxpayer-funded lobbying, and government spending. The following is a summary of the responses on the topic of a ban on taxpayer-funded lobbying and part two of three in this series:

Ban on Taxpayer-Funded Lobbying

Question posed:

“As we mentioned earlier, Governor Abbott has made promises to us that he failed to keep. One of the big ones was to put an end to taxpayer-funded lobbying… what is it going to take to get this issue resolved?”

Don Huffines

The first to answer was former Republican State Senator Don Huffines. He said,

“Let me just point out a simple fact, that most things are downstream of the Governor’s office; our legislation, our culture, our virtues. The Governor of Texas can get almost any bill done he wants, anytime he wants, he’s the Governor of Texas, he’s the leader of the Republican Party of Texas. I’ve seen it! I can tell, I can get this legislation done very quickly. My agenda is your agenda. The Republican Party legislative priorities are my priorities. That’s why I ran for office in 2015. I love our party platform. As a matter of fact, in 2008, when I was a national delegate I shipped 2,5000 of them up to Cleveland and had them distributed on every national delegate’s chair so they could see how great the Texas Republican Party Platform really is. Well, I’ve actually been a victim of this. When I found and discovered one of the largest corruptions in modern Texas history in an elected school board up in Dallas, Texas, they were stealing tens of millions of dollars, they spent $1.3 million dollars of stolen taxpayer money to defeat my legislation to close them down. At three thousand employees, they had a hundred million dollar annual budget, I got six people put in prison with the Texas Rangers, including the city Mayor Pro Tem on the City Council of Dallas. Another bill I was trying to get done was to audit. I’m a businessman, I believe in forensic third-party audits, including our elections. Anybody that doesn’t want to be audited, I get really nervous, and let me tell you, I was trying to audit a tollway authority down in Austin. They hired five lobbyists, you would have thought I was trying to kill their mother or something, it was unbelievable. And, I got the bill out of the Senate but of course they killed it. There is a lot of corruption in Austin, there is a lot of corruption in government, and I am going to find it.”

Allen West

Allen West was next to answer,

“As Chairman of the Republican Party of Texas, the number eight legislative priority was to end taxpayer-funded lobbying  and of course that did not get through. Good example of why that is so important, the Texas Association of School Boards is part of the National Association of School Boards, and it was the National Association of School Boards who came down and said that parents who show up at school board meetings are domestic terrorists. Texas Association of School Boards is a taxpayer-funded lobbyist organization and Texas Association of School Boards will go away if there is a Governor West.”

Chad Prather

Conservative humorist Chad Prather was last to answer the question,

“One of the things that lobbyists learn whenever they get that job is they know that their going to be campaigned against, that’s in the job description, but they are also told that they will never lose that job as lobbyists because no one on either side of the aisle is ever going to get rid of them, they love having the pockets lined. When it comes to bureaucracies, when it comes to people that you didn’t appoint, that you didn’t delegate authority to, those people have to go away, because they are creating the government that you hate so much. These lobbyists and these bureaucrats have got to stop and its going to take somebody with backbone, with a willingness to say we re no longer going to illegally, or immorally say we are going to line our pockets for political gain. The lobbyists have to go.”

Incumbent Governor Greg Abbott

Abbott was not in attendance at the forum but as he has been elected since 2015, he has opined on the subject of banning the practice of taxpayer-funded lobbying before. In fact, as mentioned in the original question, Abbott had actually promised the same group of activists at the True Texas Project in 2015 while campaigning that he would end the practice of taxpayer-funded lobbying as Governor.

Despite this promise, the practice has yet to have been banned. 

During the most recent legislative session, the legislation seeking to ban the practice statewide was never voted out of both the House and Senate State Affairs Committees. The only legislation to even be considered on the subject only sought to end the practice for local jurisdictions. It passed the Texas Senate but when it was considered in the House State Affairs Committee, it was substituted by the bill’s sponsor, Republican State Rep. Chris Paddie (Marshall) who created a massive loophole. Once it was brought up for the overall Texas House of Representatives to consider, it was postponed several times before finally being postponed beyond an impending deadline in the House which precluded its further consideration.

All of this happened in spite of the fact that almost 95 percent of Republican primary voters voted in favor of a ballot proposition in 2019 in support of a ban and despite polling provided by the Texas Public Policy Foundation and WFAA that showed nine out of ten Texans also supported the ban.

The issue was never added to any of the three special legislative sessions that followed.

Part One: Republican Gubernatorial Candidates on Property Taxes
Part Three: Republican Gubernatorial Candidates on Cutting Spending

With the primary season quickly approaching TFR always wants to remind its subscribers and all Texas taxpayers of the free resource that we provide to assist in making decisions at the ballot box. Although TFR no longer makes endorsements, we continue to provide transparency to voters on how their representatives voted through the Fiscal Responsibility Index.

This index is a measure of how consistently lawmakers chose to vote for limited government and spend tax dollars responsibly. This produces a numerical value between 0-100 that correlates with letter grades in school. Those scoring over 90 receive A’s grades and are considered by TFR to be “Taxpayer Champions” by consistently voting in favor of the small government and for fiscally responsible policies. Below are our taxpayer champions of the 2021 87th legislative session for both the Texas House and Senate. These lawmakers deserve accolades for representing their districts with honor and integrity.

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Please feel free to use this resource as a help to you and your family and friends as we strive for a more conservative Texas in a very important election year. Congratulations to all of our 2021 “Taxpayer Champions”.

You can see who represents you and how they scored on the index HERE.

On January 13, the True Texas Project hosted a Gubernatorial Forum for Republican Candidates for Governor. Among the attendees were former Republican State Sen. Don Huffines, former Florida Republican Congressman and former Republican Party of Texas Chairman Allen West, and conservative humorist Chad Prather. The incumbent Governor, Greg Abbott was not in attendance.

Several questions were asked as a part of the forum including some pertaining to property taxes, a ban on taxpayer-funded lobbying, and government spending. The following is a summary of the responses on the topic of property taxes and part one of three in this series:

Property Taxes

Question posed:

“How do you propose dealing with the current property tax system? Would you embrace a plan such as the Texas Public Policy Foundation’s to increase the tax base and move to a consumption tax?”

Chad Prather

The first to answer was Chad Prather. He said,

“First of all, our founding fathers would be rolling over in their graves, if they knew that people were having to rent their property for the rest of their lives. Property tax is not only wrong it is the most immoral form of taxation that anyone could imagine. If you read the Old Testament, God wouldn’t tax his own people in terms of their land, it was a land of promise, it was an inheritance to their children and their children’s children. If Israelites 6000 years ago could figure out how to navigate around property taxes then surely the greatest conservative fiscal minds in the state of Texas in the 21st century should be able to figure out a plan as well.”

Prather continued,

“We have got to cut state spending, We have got to use that to buy down this tax debt. We need to incentivize people to go out there in the private sector to do the things we have expected the government to do over the years in a mediocre fashion. So when we incentivize that, it is going to stop us from being taxed in the form that we have grown accustomed to. It has grown through the roof. As Texans, we need to lead the rest of the nation in abolishing this immoral tax.”

Allen West

Allen West was next to answer,

“Texas has the sixth highest property taxes in the United States of America. When you study and understand the property tax system it is really based upon the philosophies of Karl Marx and the Communist Manifesto and his planks. It’s a progressive tax system and the second thing that he talked about was the elimination of private property rights. Here in the state of Texas you can pay off your land, you can pay off your mortgage, but you can never own your home. There are three different approaches we have to have. First and foremost, I sat on the Texas Sunset Advisory Commission back in 2016. When you look at the fact that we have an agency…a commission that is looking at sunsetting government agencies and programs, I would ask you how many of those actual government agencies and programs actually do get sunsetted? Actually get told to go away? So number one, I want to go back 15 to 20 years and look at all of these sunset advisory commission recommendations and make sure that are actually implemented, because that is how you find the savings to start paying down your property tax relief.The other thing that we have to do is we have to move the Texas state government away from what is called a baseline budget system which means that every single budget cycle they start from the previous baseline and they increase the spending off of that.When they talk about cutting spending, they are talking about cutting the rate of the increase, not actually cutting spending. That’s what we have to change. What you do in your homes, what you do in your businesses is what is called a zero-based budget system. Every single budget cycle, every agency has to once again validate its existence, validate any programs that it wants to have, old and definitely ofcourse new. So those are the two ways, when we look at savings, we can buy down. And I agree, we have to move to a consumption-based tax system because why? Prior to 1917, in the United States of America, when we created the personal income tax, which was supposed to be temporary in nature, we did taxation in America by consumption base. Taxation, they call it the FAIR Tax, should be based on what you are going out there and purchasing. One of the key things we have to do is talk to people, economists, to make sure it is not a regressive tax system against our lower-income tax levels, so that way you don’t have to pay out these rebate checks to these people. So that’s the plan, number one, look at the SUnset Advisory Recommendation over the past 15-20 years, Number two, move from a baseline budget to a zero-based budget system, and number three, get this consumption-based tax program implemented, which we will do in the 88th legislative session in 2023, and we will get it on the ballot for you to vote on to be part of the Texas state constitution in November 2023.”

Don Huffines

Don Huffines was last to answer the question,

“The answer to the question is yes,  I will work with TPPF, the Texas Public Policy Foundation, I’m taking it a step further, they talked about just eliminating the M&O on school taxes. This has been a priority of my campaign from the very beginning. It has been up on my website since the second of May. I’ve worked on it for years. Let me just set the table for you. As these gentlemen just said, everything you see, when you are going home tonight, driving to work tomorrow, everything you see is owned by the government. Your land, your ranch, your farm, your business, your home, they own it all. All you get to do is rent it from them, and guess what, you don’t even have a lease! You don’t even know what the rent is going to be! This is a terrible way to fund the government! It’s a plank in our party platform to do away with it. There is a lot of paths, my path is very specific. I’ve got Excel spreadsheets 6-inches thick on this. This is a math problem. It’s very doable, it’s not political rhetoric. This is going to happen. My plan is it is going to take 8 to 10 years to phase it out, you’re going to get a chance to vote on it, it is going to be a constitutional amendment on whatever plan we get out, so you can weigh in on it, you can decide if we want to move some to sales tax or whatever it is you can go yay or nay on it. We are never going to have an income tax and we are going to keep local governments fully funded and how we are going to do that is we are taking a surplus in revenues from the state of Texas and we are going to buy down property tax with it, then we are going to move some over to sales tax. Let me give you an example, the Comptroller just put out the numbers the other day. He thinks, the next biennium we are going to have a $27 billion surplus in the state of Texas. We can use a lot of that money. My goal is to take 90% of the state’s surplus and use it to buy down property tax about $6 to $7 billion dollars, we get about $68 billion on property tax. We are replacing the money that local political subdivisions get from property tax, that money comes in from the state of Texas.”

Incumbent Governor Greg Abbott

Abbott was not in attendance at the forum but as he has been elected since 2015, he has opined on the subject of property taxes several times and has a record by which we can review.

He recently unveiled what he calls the Taxpayer Bill of Rights to address the issue of property taxes. Though under his leadership the state legislature has attempted to reform the property tax system, it is important to note that they have only limited the rate of increase of property taxes themselves as well as only offer additional exemptions to portions of the property tax for special classes of Texans.

Part Two: Republican Gubernatorial Candidates on Banning Taxpayer-Funded Lobbying
Part Three: Republican Gubernatorial Candidates on Cutting Spending

Yesterday Governor Greg Abbott announced his “Taxpayer Bill of Rights” proposal at a meeting of the Kingwood Tea Party. In response, many grassroots activists reported being underwhelmed after reviewing the plan claiming to put Texas on a path to reduce property taxes and local debt.

So what does the proposal actually claim and purport to want to accomplish? Here is our breakdown of the proposal released yesterday:

Reduce School Property Tax Rates

Abbott claims that under his leadership, Texas has spent $18 billion reducing property taxes since 2015. The problem with that claim is that property tax collections themselves have increased 19% in that same time period. It is likely that what Abbott is referring to is the omnibus education funding bill that was passed in 2019 which reduced the percentage that local governments could raise your property taxes to that of 2.5% before having to get voter approval via an election for anything above that percentage. At issue is that limiting growth from 8% to 2.5% is not “reducing taxes”, it is merely limiting the growth rate.

Texans for Fiscal Responsibility (TFR) has not yet had one taxpayer report to us that their property tax bill has been reduced. In fact, we consistently hear the contrary, from Texans that are continuing to struggle to pay the increasing amount owed and are effectively being taxed out of their homes. This is primarily due to both the Texas legislature and Governor Abbott’s refusal to provide any meaningful relief. TFR’s position has been consistent and we believe that perpetual property taxes are immoral and should be eliminated completely.

Empower Homeowners and Property Owners to Reduce Their Taxes

This section has 4 provisions:

1) A 3% discount if taxes are paid in full by Jan. 31

The problem with this provision is that almost no one can afford to do this with property taxes at their current level. Many elderly Texans on fixed incomes have been forced out of their homes already due to their inability to afford the payments. These folks would not be able to qualify for this, and even if they do, a mere 3% is a lousy and gimmicky discount. The vast majority of Texans roll their taxes into mortgage payments and it is unclear whether this would qualify for the discount proposed. Either way, they are still paying taxes on an ever-growing burden.

2) A reduction in taxes if the purchase price is lower than the appraised value

Although appraisals are out of control and have helped inflate home prices themselves, the newest trend increasing home prices is that of Texas transplants who are purchasing property over their listed values making this a moot point. Many Texans have recently been priced out of the market by Californians and other transplants who are fleeing their states and in turn inflating Texas home values. This contributes to a newer phenomenon that home purchase prices are typically higher than appraised values. For most Texans in hot real estate markets, this provision would not provide any relief.

3) Easier more transparent protests

This provision TFR just simply disagrees with. A more transparent appraisal process does nothing to help reduce property taxes. The appraisal protest process is a major inconvenience for most homeowners and claiming you will make the process more transparent does not ultimately help to reduce property taxes themselves. TFR believes that by eliminating the property tax we can eliminate the appraisal process altogether, or at the bare minimum have one appraisal at the time of purchase.

4) $100,000 exemption for small business equipment

Although this is a well-intentioned reform that might be helpful to some small businesses, it will not help to lower the tax bills of most working-class Texans who are overburdened with property taxes on their homestead right now.

Local Government Debt

Requiring local debt to be passed by a 2/3 majority would ultimately not change much, considering that the most populous local governments in Texas are run completely by elected officials who support increases in government spending. Their tax and spend policies typically pass with overwhelming majorities and they will continue to pass debt obligation proposals without problems, even if this provision were implemented.

A truly conservative and fiscally responsible state government would tie the hands of local governments and not allow for any additional debt until the concerning and ever-increasing debt obligations they currently have are addressed. Texas ranks among the highest in the country of states that have extremely concerning local debt obligations.

TFR’s Final Thoughts

These types of policy suggestions are more of the same old ‘dog and pony show’. This is not the first time Abbott released a Taxpayer Bill of Rights proposal and taxation has only gotten worse since 2015. Claiming that you have reduced property taxes when not one Texan’s property tax bill has gone down is deceptive and all the majority of taxpayers in Texas have to do to refute this claim is look at their rising tax bills. Texas taxpayers have been begging for property tax elimination for years. It is a plank in the Republican Party of Texas’ own platform, a party of which Abbott is a member, and that currently controls all levers of state government including the legislature.

It is not good enough to throw Texans a bone and continue to force them to rent their property from the government and yet, that is precisely what Texans have been doing for decades. Paying the government perpetual rent is immoral and it is unsustainable for many on fixed incomes. TFR has called for the complete elimination of the property tax and we have had a realistic plan to do that for almost a year. Texans want their bills to actually go down, not more empty promises and gimmicks from elected officials. If this is what Abbott plans on doing, should he be reelected, it is likely most Texans will need to prepare for more of the status quo, property taxes that continue to grow while politicians pay lip service to the problem.

In response to our article defining the correlation between inflation and interest rates, TFR has been asked by many subscribers to explain the system that makes this possible.

What is fractional reserve banking?

Fractional reserve banking is a system of banking that requires banking institutions to keep a portion of deposits as reserves. Banks then use these deposits to make new loans, making the banks intermediaries between borrowers and savers. This process allows them to create new money through loans and interest using savers deposits and it provides liquidity to savers that want to withdraw their money. This system was implemented around the time of the Great Depression in response to bank runs caused by depositors making withdrawals all at the same time. The Federal Reserve sets the reserve requirement which has traditionally been 10%. So if you make a $1000 deposit, the bank can lend out $900 but has to keep $100 in reserve.

The original concept of fractional reserve currency was invented in the gold trading era. Consumers would deposit gold or silver coins with goldsmiths and they would, in turn, receive a promissory note. These notes eventually became currency and were used in corporate transactions. The goldsmiths soon realized that not all depositors would withdraw their funds simultaneously due to the notes being used in trade, and in response, they started using the gold deposits to create loans.

This led to the goldsmiths becoming interest-earning banks. When consumers lost faith in these banks they would run on their deposits causing the bank to become insolvent. This led to the first governments creating laws to regulate banks, Sweeden establishing the first central bank in 1668 with the power to set reserves, regulate commercial banks, and be a fail-safe for consumers that fell victims to insolvent banks.

Banks in the modern-day US must keep their reserves in their vault or at the nearest Federal Reserve Bank. As said previously, the reserve requirement has been 10%, however, something remarkable happened in March 2020 when the Federal Reserve announced it had changed the reserve requirement to ZERO. This has allowed banks to lend as much money as they want with no reserve, and as of January 2022, this reserve requirement is still in effect.

With the recent talk about inflation hitting 40-year highs at 7% this past week, there has been a lot of discussions specifically centered on what the Federal Reserve’s strategy is going to be in response. Most of you have probably heard what the Fed is proposing, but not everyone understands the correlation between interest rates and inflation. In this article, we hope to explain what that correlation is.

Both inflation and interest rates are often cited in macroeconomics. Inflation is a term that refers to the rise in the price of goods and services. The most used source of inflation data is the Consumer Price Index (CPI) which is released on a monthly basis from the Bureau of Labor and Statistics. Interest Rates are the amount charged by a lender to borrowers. In the United States, this rate is based on the federal funds rate set by the Federal Open Market Committee (FOMC). In simple terms, this rate is set by the Federal Reserve or the central bank of the US (yes it is a private bank and not a branch of the federal govt).  The Fed attempts to manipulate inflation by adjusting this rate, this essentially allows them to expand and contract the money supply.

The US banking system is a fractional reserve system, and in this system interest rates and inflation tend to have an inverse relation.

Why is this the case? Well, this is because as interest rates are reduced, consumers tend to borrow more money because with lower interest rates it is cheaper for them to do so. As more money is lent out, the money supply increases and typically expands the economy, due to all that money being spent, however, the increase in the money supply also causes inflation.

Conversely, when interest rates are increased, people tend to save more and spend less as the rate increase allows higher returns for saving accounts. With less money in active circulation being spent on goods and services, it causes the economy to slow down and inflation to decrease. To better understand why this is the case, you need to understand the Fractional Reserve Banking system which we will cover in future articles.

We hope this overly simplistic article helps you to understand the inverse relationship between inflation and interest rates. Because inflation is at a 40-year high, interest rate hikes will be coming soon. The Fed has promised at least 3 this year.

Educating taxpayers on our monetary system is crucial to advocating for fiscally responsible policies. TFR’s vision is to educate and empower Texas taxpayers to advocate for sound fiscal policy. If you ever have questions, please feel free to contact us HERE. 

CPI data released this morning revealed that the year-over-year inflation rate has hit 7%. This is the highest rate experienced in 40 years (since 1982) in the USA and there is no sign that we will be inflecting downward any time soon. Inflation is a tax on the working class that makes our salaries and savings worthless over time. As the purchasing power of the dollar falls due to inflation, money simply does not go as far as it did a year ago. In a simplistic example, if your yearly earnings amounted to $100,000 in December of 2020, it is now as if your salary is $93,000.

Vance Ginn, the Chief economist for Texas Public Policy Foundation, tweeted this in response this morning,

“Goodbye to much of your purchasing power as the Fed continues to monetize the national debt made worse from actions taken by #Biden and #Democrats.”

The current administration has continued to downplay the disastrous numbers caused mostly by the increase in money supply over the last few years. Most economists estimate that since the beginning of the pandemic the Federal Reserve has increased our money supply somewhere between 30%-40%. In one year! Fiscally responsible economists have been sounding the alarm that massive inflation was coming and it has finally arrived.

Inflation coupled with massive supply chain shortages has many economists and taxpayers worried. The general consensus is that things are going to get worse before they get better. With a monetary system based on fiat currency, one of the only weapons we have against inflation is interest rate increases. The Federal Reserve has already promised this will happen, at least 3 times this year! The typical equation (the one used in the 80s to get inflation under control) is multiplying the inflation rate by 1.5%. This would mean at current inflation levels we would need an interest rate increase to 10.5% in order to rein in inflation.

The Federal Reserve is proposing a rate much lower than that. The question is, will inflation begin to inflect downward on its own in the next few months as many advocates of Modern Monetary Theory are claiming, or will it continue to persist into hyperinflation?

We will have to see what the numbers show us over the next few months as new CPI data is revealed. TFR remains extremely skeptical this problem is going to “take care of itself” and will not improve until massive economic policy changes are implemented.

Tuesday, Texas Lt. Gov. Dan Patrick announced that he was naming Republican State Sen. Joan Huffman (Houston) as the new Chairman of the Senate Committee on Finance, replacing outgoing Republican State Sen. Jane Nelson (Flower Mound) who has chaired the committee since 2013.

Huffman has served in the Texas State Senate since 2008 and currently represents Texas Senate District 17. Huffman most recently served as the Chairman of the Senate Committee on Jurisprudence and Special Committee on Redistricting.

In his announcement, Patrick said,

“When Finance Chair Jane Nelson, R-Flower Mound, decided not to run for re-election, I immediately began thinking about who I would name as the next Finance Chair. The position of Finance Chair is one of the most powerful positions in the Senate. That person, along with the Senate Committee on Finance, oversees the budget of the 9th largest economy in the world.”

Huffman’s track record on fiscal issues is less than ideal for Texans who might be concerned about government spending. She has a career rating of a ‘C+’ on the Fiscal Responsibility Index, and during the most recent legislative session was rated a 69 out of a possible 100 score.

Patrick continued,

“Sen. Huffman has served on the Senate Committee on Finance since 2013. She has served as chair of various finance work groups, and I have selected her to the important 5-member conference committee that negotiates the final budget with the House 4 times. She has taken on many key issues in finance and championed the issue of pension reform.”

The first Fiscal Responsibility Index was released in 2007 as a tool to provide Texas taxpayers with the transparency needed for a system that was created to protect incumbent lawmakers. Before the existence of the index, no other organization had the sole purpose of serving citizens and not the Austin swamp by specifically working to hold lawmakers accountable. The index is now on its 8^th iteration and has served Texas taxpayers for nearly 16 years.

Over that period of time not much has changed in the way that TFR administers the index. Transparency, honesty, and consistency have been our primary goals in serving citizens while scoring lawmakers based on their voting record. The public and lawmakers are still notified in advance on which votes will count toward the index and are also provided reasoning on why TFR supports or opposes each vote.

The index is a measurement of how lawmakers perform on issues that involve the size and role of government. The scores that lawmakers receive are an objective metric that reveals their “philosophy of governance” using their own voting records as the basis for their score. The index has revealed over the years that many politicians campaign as “fiscally conservative” but instead have a voting record that many times does not match their own rhetoric.

The average taxpayer simply does not have time to go through the thousands of votes that are taken on varying pieces of legislation, let alone read all of the bills and amendments, which are usually written in a confusing and deceptive manner to suppress voters from engaging altogether. Instead, TFR  reads through thousands of bills and votes every legislative session, doing the hard work for citizens and in turn, gives them an easily understandable metric by which to judge the performance of lawmakers. This is the reason we exist, to assist and educate taxpayers on what their own representatives are doing in Austin while they are busy producing the tax dollars that fund that very government.

With the primary election season ramping up, voters are about to be inundated with campaign ads and mailers from incumbent lawmakers claiming to be courageous conservatives that advocated for small government on their behalf.  It can be hard for voters to hear the truth through all the noise. Politicians can lie, but facts and objective measures never do. We want to remind taxpayers that we are always here to be a resource to you and want to encourage you to use the Index this primary election season as part of your research before you cast your ballot. It is the ultimate result of thousands of hours of labor and it begins and ends with taxpayers in mind.

Please visit our index page where you can look up who represents you and then see how they have scored on the index going back all the way to 2007.

The 2022 Primary Election season is already well underway and for voters choosing to participate in the Republican primary election, among choosing between a litany of candidates up and down the ballot, they will also have the ability to consider a ballot proposition specific to property tax elimination.

Republican Primary Election Ballot Proposition on Property Tax Elimination

Proposition 2, on the upcoming Republican primary election ballot specifically says,

“Texas should eliminate all property taxes within ten (10) years without implementing a state income tax.”

Voters will simply be given the opportunity to vote yes or no.

Undoubtedly, the results will be used to lobby and influence lawmakers in the lead-up to both the general election in November 2022 and in the 88th legislative session set to start in January of 2023. The results will particularly be used on Republican lawmakers in renewed efforts to put Texas on a path toward the elimination of ad valorem taxation or perhaps put more bluntly, having Texans no longer perpetually pay rent to the government after purchasing a home.

Recent Legislative “Efforts”

Republicans have controlled every statewide office and the state legislature for almost two decades. Despite this reality and despite promises to provide substantive tax relief over the course of that time, property taxes have increased exponentially.

In March of 2021, the Tax Foundation reported that Texas is ranked as the state with the sixth-highest property tax burden in the United States.

In June of 2021, after the conclusion of the 87th regular legislative session but before the three special legislative sessions that followed, the Texas Public Policy Foundation published a poll that suggested 76% of registered voters agreed that property taxes are a major burden for them and their families. That same poll found that 71% of registered voters would be upset if the current legislative session ended with nothing done to address property taxes.

The 87th legislature had several opportunities over the course of 2021 to put Texas on a path toward property tax elimination. The special legislative sessions came and went and despite legislation being filed and heard in committee that would have set Texas on a path to property tax elimination, the legislature instead chose to provide for ‘trinkets’ of relief for specific classes of Texans.

They did this by increasing the homestead exemption from that of its current amount of $25,000 to $40,000 in the third-called special legislative session. In the second-called special legislative session they passed legislation that allowed someone who acquired property to also qualify for the homestead exemption within the first year of that acquisition, as well as by passing legislation that puts the question to voters to choose to compress tax rates for those that are over the age of 65 or disabled, but not that of all Texas property owners.

The legislature did those things but chose not to consider legislation that sought to bring the school maintenance and operations (M&O) taxes down to zero by using the budget surplus to “buy down” those rates. Put another way, the legislation would have provided for the framework for school M&O tax rates; the largest portion of the property tax valuation, to approach zero over a specific period of time by having the state provide for that decrease.

In the third-called special legislative session, that legislation passed out of the House Ways & Means Committee but was never considered by the House Calendars Committee to be sent to the overall House of Representatives for its consideration. As such, the session concluded without the legislature having addressed the issue.

Primary Election Details

The upcoming primary election itself is scheduled to be held on March 1, 2022, with the early voting period set to begin on February 14.

On the Republican ballot will be candidates for elected office as well as 10 ballot propositions for voter consideration.