AUSTIN (CBS11) – The Texas Senate’s top budget writer, Senator Jane Nelson, R-Flower Mound, said a downturn in the state’s oil and gas industry may delay or limit tax cuts in the next two-year budget.
State leaders said that’s because the state will have nearly $3 billion less to spend during the 2018-19 biennium than the current 2016-17 budget.
As a result, Nelson said, “I would love to give extra property tax relief. I think we’ll be able to do some, but not as much as we would like if the economy was cooking.”
She and other lawmakers are hoping the oil and gas industry will improve and boost the state’s economy before they finalize their budget by the end of May.
Last session, the state doubled the homestead exemption.
Republican leaders have said they want to do something because property taxes are the sixth highest in the nation.
Texas Rep. Ramon Romero, D-Fort Worth, questioned, “For the last 20 years, we’ve given $9 billion in property tax cuts. But go to any particular homeowner and ask if they’ve felt those tax cuts, I’m sure they haven’t felt them.”
That’s because property values have been rising in the Dallas-Fort Worth area, which has increased property taxes.
Nelson and Texas Rep. Matt Krause, R-Fort Worth, said one proposal that may be considered is to require the public to vote when property values increase by a certain percentage.
Another priority by Republicans has been to cut the business franchise tax.
Last session, Nelson said lawmakers lowered the franchise tax by $4 billion.
But she said before further cuts can be made, the state’s economy must improve.
“If we have more money than the comptroller estimated, we can buy down the franchise tax. I’d love to eventually be able to eliminate it, but doubtful that’s going to happen this session,” said Nelson.
Romero and Texas Rep. Eric Johnson, D-Dallas, said they’d like to tap into the state’s economic stabilization fund, also called the rainy day fund.
The state’s savings account now stands at more than $10 billion and Texas Comptroller Glenn Hegar projects it could grow to nearly $12 billion by the end of 2019.
“The idea that somehow we have to cut to the bone because we had a dip in our economy is just political. It’s mis-direction. What we really need to be doing at a time like this is looking at going into our economic stabilization fund for $1 (billion) to $2 billion,” said Johnson.
The state’s $800 million in spending to secure its border is again up for debate.
Both Nelson and Johnson said they wish the state could spend that money on other programs.
But Republicans like Nelson said the state must continue to spend the money until the federal government adequately does the job.
“I’m going to put it in the next budget. I don’t want to commit on that happening and leaving our border unprotected,” said Nelson.
She said she hopes now that Donald Trump will be President, he will not only work with the Republican majority in Congress to increase border security, but will reimburse Texas for what it has spent.
While Johnson said the federal government could be doing a better job, he said, “We really didn’t have a border security issue to the tune of $800 million last session. It was an exorbitant amount of money to spend.”
One area in which Republicans and Democrats agree, is spending to fix Child Protective Services, a system state leaders have called broken.
Lawmakers in both parties say they’re confident the state will spend the money needed to fix CPS.
The state is now spending an extra $140 million to address the crisis by hiring more caseworkers and giving them a raise.
It was last March, when four-year-old Leiliana Wright of Grand Prairie was beaten to death, allegedly by her mother and her boyfriend , while CPS was investigating and supervising the case.
At the same time, the state found caseworkers weren’t investigating child abuse reports in a timely manner as required or at all.
The state also found many caseworkers quit their jobs because they had too many cases to handle and not enough help.
Lawmakers believe there could be an extra $300 million spent to fix the issue during the next two year budget.
“I think we’re going to see movement,” said Rep. Krause. “It’s a high priority, a huge priority and it needs to be, so I’m confident we’ll take great strides to reforming that system.”
“I’m in total agreement with that,” said Rep. Johnson. “It doesn’t get any more vulnerable than a kid who’s in an abusive situation.”
The Texas foster care system has also come under sharp criticism from a federal judge who’s ordered major fixes.
On the first day of the session, all 150 members of the Texas House voted unanimously to make Joe Straus, R- San Antonio, Speaker for his fifth term tying a state record.
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