The Texas Legislature just found out it has a huge opportunity to correct its profligate spending failures made earlier this year. But instead, they’re gearing up to spend more at the expense of strapped taxpayers. This would be a fatal error for the Lone Star State.
Texas Comptroller Glenn Hegar recently released the Comptroller's Revenue Estimate (CRE). This report acts like a financial checkup to confirm sufficient tax revenue available to cover expenditures based on the state’s balanced budget amendment.
The current two-year tax revenue for 2024-25 was updated higher to $194.6 billion available for general spending, an increase of 24.8% from the previous budget. This certified revenue estimate exceeds the $176.3 billion appropriated by the 88th Legislature for general purposes, resulting in a projected surplus of $18.3 billion.
This large amount is from a more vibrant economy than previously estimated and could go a long way to putting school property taxes on a path to elimination. Yet the Texas Legislature’s recent out-of-control spending habits indicate taxpayers probably won’t get more property tax relief than the minimal amount passed this year.
The state wants to increase spending on a government school system in the current third special session rather than on students to have universal school choice. And spending could go up by more than $13 billion outside of the expenditure limit if voters approve most of the 14 constitutional amendments on the state ballot this year.
Add it all up, and it’s no wonder that Texans find living in many places across the state unaffordable.
While Texas has witnessed major economic achievements this year, such as noteworthy records for labor force participation and job creation, the 88th Legislature's actions raise serious concerns about the future.
This year, the Lone Star State passed its largest spending increase, largest corporate welfare, and just the second-largest property tax cut in state history, which the latter will underwhelm homeowners when they get their bills. This could be a major problem for Republicans who have touted this as the “largest property tax cut in the world” or the “largest property tax cut in Texas history.”
While Texans grapple with an affordability crisis, spending the state surplus and voters approving the proposed ballot items, except propositions 3 (prohibit wealth taxes) and 12 (abolish Galveston County treasurer’s office), would add insult to injury.
Rather than squandering the surplus, the Texas Legislature should prioritize strengthening the Texas Model by:
1. Spending less at the state and local levels, strengthen the state’s spending limit with the rate of population growth plus inflation covering all state funds, and have that spending limit also cover local government spending similar to Colorado’s Taxpayer’s Bill of Rights.
2. Taxing less by putting local property taxes on a path to elimination using surpluses to reduce school district M&O property tax rates until they are zero. Local governments should leverage their surpluses to reduce their property tax rates until they are zero.
3. Regulating less by removing barriers to work, removing occupational licensing restrictions, reforming safety nets, and passing universal school choice.
Strengthening the Texas Model isn't just about fiscal responsibility; it's about securing a thriving future for generations to come. Texas, with its unique spirit and determination, can continue to lead the way, fostering an environment where free-market capitalism thrives and individuals prosper.
The surplus, instead of being frittered away on needless pursuits, should be a catalyst for transformation that redefines the Lone Star State's destiny, safeguards liberty, and sows the seeds of enduring prosperity.
Originally published at The Center Square.
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It’s an exciting time as millions of students return to schools in Texas this month. The bright young minds are ready to take the next step in their unique paths for a prosperous future.
But what’s depressing is that few students in Texas will attend the best school for them. This is because Texas – the largest red state – has yet to adopt universal school choice.
Why the delay? Mostly misinformation.
School choice is “any policy that allows families to take their children’s education dollars to the approved education provider of their choosing – be it traditional public schools, public charter schools, private schools, virtual learning, or homeschooling.”
The gold standard of school choice is Education Savings Accounts (ESAs). Universal or near-universal ESAs have been adopted by eight states so far: Arkansas, Arizona, Florida, Indiana, Montana, South Carolina, Utah, and West Virginia. Other states have passed limited school choice.
With ESAs, all parents receive an allotted amount for each child that they can use however they wish for approved education-related expenditures. Some parents choose to send their child to their local public school district and use the money for school supplies. Others put it toward private school tuition, and others toward homeschool curriculum and tutoring.
The possibilities of using ESAs are extensive to best meet the unique needs of students.
But Texas trails behind in school choice because voters living in rural areas fear “that any kind of educational competition will decimate rural public schools and drain them of funds.”
This circular concern proves the point that school choice advocates have been making for years: if a school, be it public, private, or charter, fails due to the existence of ESAs, then that school lacks the competition required to keep and attract parents.
And herein lies misinformation.
A recent article from the Dallas Morning News on this subject claimed, “Did you know parents can take their children to any school they desire? If a parent wants their child to attend a charter, private or public school, the parent has the power to choose.”
If only that were true.
But when the average private school tuition in Texas is over $10,000, and the charter school waitlist is over 70,000, asserting that “parents can take their kids to any school they desire” misunderstands how unattainable alternative schooling options are for many children, especially those in lower-income or single-parent households.
I grew up in a lower-income, single mother household in South Houston, Texas, so this limitation hits home.
Fortunately, I had the opportunity to go to a small private school from kindergarten to second grade because my mother worked there. I attended a government school from third grade to sixth grade. Then my grandparents and father helped my mother fund my home schooling from seventh grade to twelfth grade. I then went on to be a first generation graduate with a doctorate in economics from Texas Tech University.
Unfortunately, too many don’t have those same opportunities that I was blessed to have. This must change.
While ESAs do not remove every barrier, as schools have limited seats and some areas may only have government schools. But they substantially widen the array of options by helping alleviate some of the financial burden by putting tax dollars where they belong: funding students instead of systems.
The states that have adopted universal school choice with ESAs are allowing a more competitive market to work in education, and it will be exciting to see how competition fuels improvements in educational outcomes. Not only are parents in these states more equipped to send their children to the best schooling options for them, but teachers are also empowered with more options for where to take their professional services that best meet their needs.
Are government schools the best option in Texas? Implement universal school choice, and the answer will become apparent. Otherwise, the Lone Star State will lag behind more forward-thinking states that value educational freedom and student achievement.
There is a high likelihood that school choice will be part of a called special session by Texas Gov. Greg Abbott (R) in October. Let’s hope so because the longer Texas waits, the further students will fall behind.
Originally published at The Center Square.
In today's episode of "This Week's Economy," I discuss the latest GDP report, the House Republicans passing a new debt ceiling bill, School Choice, state budgets, social media bans, and more.
Thank you for listening to the 6th episode of "This Week's Economy,” where I briefly share my insights every Friday morning on key economic and policy news at the U.S. and state levels.
Today, I cover:
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2) States: Updates on Universal School Choice and budgets across states, especially Texas and Louisiana; and
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The school choice revolution in the form of universal ESAs is sweeping the nation. This is extraordinary news for students, parents, teachers, and the economy.
Florida recently became the fourth state to adopt universal school choice in 2023. Earlier this year, Iowa, Utah, and Arkansas joined the rebellion against “public” school monopolies by passing universal school choice after West Virginia and Arizona ignited the revolution last year. There are now more than 10 states with education savings accounts (ESAs), and more likely coming soon.
But Texas, Louisiana, Ohio, Alabama, and other states must follow their lead or have their students and economies be left behind.
Although there are still naysayers slowing progress, the tide for school choice is growing as more parents and teachers are persuaded that school choice empowers them and their students. But an often overlooked benefit of school choice is it supports a stronger economy.
Evidence shows that school choice is connected to improved student outcomes, increased teacher pay, and growing economic opportunity, to name a few of its benefits. School choice’s positive effects on these measures counter the problems in the “public” school system, which is an oxymoron.
“Public” schools can exclude students, which a public good can’t do. Also, any positive benefit of this so-called “public good” is questionable at best, given declining test scores and long waiting lines for charter schools.
More accurately named, government schools are funded by taxpayers and operated by government employees. As the only “free” option and a monopoly in states without school choice, government schools have little incentive to improve the flawed one-size-fits-few approach.
This also contributes to many high-quality teachers being underpaid. Government schools have few reasons to efficiently manage funds because they keep getting more taxpayer money regardless of their outcomes. This helps explain why too much money goes to over-paid administrators instead of teachers, and taxpayers don’t get what they pay for regarding academic and work outcomes.
Taxpayers pay about $16,000 per student per year, and that continues to increase over time even after adjusting for inflation. And yet, our students are underperforming academically, falling behind kids in other countries. These outcomes were exacerbated by school shutdowns during the pandemic that left students even less equipped, but this has been a longer-term trend.
More school choice is needed to motivate government schools to stop promoting mediocrity.
In states like Arizona, where all students above the age of five who live in the state are allotted the same amount of funds, parents of all types now have a range of options, no matter their demographic or socioeconomic status.
School choice is finally letting free markets, meaning free people, work in an arena that’s been monopolized by the government for too long.
Yes, taxpayers would still fund ESAs. But until states decide to get out of the schooling market, the next best alternative is to allow competition whereby the dollars follow the child instead of to a system.
In states like Florida with ESAs, parents can vote with their dollars on the best schooling options for their children, forcing all schools, including government schools, to stay competitive if they hope to attract and keep students by providing the best educational outcomes and extracurricular activities.
Giving families more freedom to choose schools, tutoring, and other resources for their unique kids will better equip them to perform better academically and in their careers.
Instead of most students — and almost all underprivileged students — being shuffled through the same one-size-fits-few government schooling system, ESAs allow students to flourish into well-rounded adults, leading to better careers, a more productive workforce, and a faster-growing economy.
The positive economic ripple effects of a society with more access to better education are myriad.
More educated societies tend to experience less crime, decreasing burdens on public services and increasing social trust, which is crucial for the economy. Additionally, more education is linked to higher incomes and improved health. These reduce the number of people in poverty, which reduces the number of people dependent on safety nets funded by taxpayer money, thereby reducing government spending and taxes, resulting in even better economic outcomes.
All these elements are conducive to happier, healthier people with more means to prosper, produce, and innovate, which in many ways is the bedrock of a better economy and livelihoods.
With more than 10 states providing the option of ESAs, including four states providing universal ESAs this year, why not take it to all 50? Texas, Louisiana, Ohio, Alabama, and others ought to be next or risk their students and economies being left behind.
Originally posted at the Daily Caller.
Vance Ginn, Ph.D.