Chairman Bettencourt and members of the committee, Thank you for holding this hearing. I am Dr. Vance Ginn, president of Ginn Economic Consulting, Texan, and father who is concerned about Texas's housing affordability crisis. While the state can’t address general inflation and interest rates, as those have been failures of Washington, policymakers can tackle restrictive local zoning and high property taxes. First, restrictive zoning regulations restrict the housing supply, driving up housing prices faster than many can afford.
Second, regarding the 11th most burdensome property taxes, achieving affordable housing means committing to eliminating them.
These reforms can benefit Texans, but achieving them will require political courage. Combining local zoning reform with a path to eliminate property taxes provides a practical approach to housing affordability that the Legislature can accomplish in the next session. Thank you for considering these ideas to remove government obstacles and make housing affordable for Texans. Vance Ginn, Ph.D., is president of Ginn Economic Consulting and contributor to more than 15 think tanks, including Americans for Tax Reform and Texans for Fiscal Responsibility. Dr. Ginn was previously a lecturer at multiple higher education institutions, chief economist at the Texas Public Policy Foundation, and chief economist at the White House's Office of Management and Budget. He earned his doctorate in economics at Texas Tech University. Follow him on X.com at @VanceGinn and get more of his research at vanceginn.com. Originally posted at The Sentinal. Read my full testimony here or watch it at YouTube below at minute 38:00. Kansas is spending too much and needs to reform the way it creates the yearly budget, was the message Dr. Vance Ginn — a senior fellow at the Kansas Policy Institute, told a state legislature committee on Oct. 2, 2024. Dr. Vance Ginn Ginn, who was also the former chief economist in the White House Office of Management and Budget and is president of Ginn Economic Consulting, told the Special Committee on Budget Process and Development the “main problem of government” is how much is spent. “Unfortunately, in Kansas, there’s too much that’s being spent,” he said. “I know that’s why you’re looking at budget process reforms and how to spend less over time to make sure that you have the best use of taxpayer money that’s coming out of the productive private sector.” Ginn pointed to Colorado as a good example. “When you look at Colorado, which has (gone) from red to purple to blue over time, one of the things that’s helped them to restrain spending, no matter what the political situation has been, is their Taxpayer Bill of Rights,” Ginn said. “TABOR, as it’s called, is a spending limit that limits the growth of the budget to no more than population growth plus inflation, which is a good measure of the average taxpayer’s ability to pay for government spending. “Now it’s been weakened a little bit over time by some courts and by politicians and things of that nature, but it still has been able to hold their spending to population and inflation and keep taxes down lower than it otherwise would be.” Ginn noted that other countries are doing something similar as well. “We’ve also seen spending limits work in other countries. Sweden and others. The Swiss debt break is another example of that, ” he said. “So it’s not just the states, which I think is important, as we’re talking about here in Kansas today, but also to look at what other countries have done.” Ginn also suggested looking at a longer-term budget — if perhaps not as long as the federal government’s 10-year budget projections. “I don’t know how far in advance you want to go, but maybe a couple of years, two or three years, I think looks good to figure out what’s happening for the future,” he said. “How are the trends looking for different areas of the budget, whether you look at health care, education, transportation, I think those things are really important. It’s something that’s been able to work in Florida to help to restrain the spending over time.” Ginn suggested other measures as well, including independent efficiency audits, such as Texas uses, to help find waste within state departments. He also said the state should look at an annual budget analysis. “So you have the budget that’s passed, but then look at it throughout each year to ensure that those dollars are being spent wisely and that we’re getting the effectiveness — the intended goals are being met for each one of these programs as well,” he said. Ginn is also an advocate of “zero-based” and “priority-based budgeting,” as well. “I think it is really important to adopt priority-based budgeting,” Ginn said. “Zero-based budgeting is important. Start from scratch and build your way up. It’s kind of costly, it’s time consuming to do some of those things. But there’s also performance-based budgeting to make sure that you’re getting the performance out of these. So a combination of those is priority-based budgeting, which I think, if you’re looking at the annual reviews, would be a great opportunity for you all to make some suggestions, make some changes.” Spending per resident in 2022Kansas spent $4,941 per resident in 2022, excluding federal and debt-related spending, as reported by the National Association of State Budget Officers. By comparison, Colorado spent $3,935 per resident. Missouri ($3,110) and Oklahoma ($3,404) also spent a lot less per resident to provide the same services as Kansas. Only Nebraska spent more, at $5,268 per resident. Just getting to Colorado’s level of efficiency would save taxpayers almost $3 billion annually. Responsible Kansas Budget would meet many of Ginn’s suggestions Ginn pushed something KPI has proposed for two years now. “The Responsible Kansas Budget” is a model to achieve a sustainable budget through tax-and-expenditure limits based on transparency and performance-based budgeting, which will rein in government spending to avoid deficits. In 2022, KPI released its first edition of the Responsible Kansas Budget for 2023. The model proposed a limit on All Funds (state funds plus federal funds) appropriations in 2023 at $21.0 billion based on limiting spending increases to the combined rate of population growth and inflation. Instead, the Legislature approved an All-Funds budget of $22.9 billion—nearly $2 billion more than the RKB. The RKB uses a simple calculation of finding the growth rate of the state’s resident population and adding it to the growth rate of the state’s Consumer Price Index [a common measure of inflation] to set maximum appropriation limits. Indeed, from fiscal 2005, through fiscal 2023, state appropriations grew from $7.2 billion to 17.1 billion. Had the RKB’s appropriation limits been in place, the growth would have been to “only” $11.4 billion, saving Kansas taxpayers roughly $5.7 billion. Originally published at Texans for Fiscal Responsibility and full testimony there.
The following piece is taken from Dr. Vance Ginn’s Testimony to the Texas House Select Committee on Sustainable Property Tax Relief: Over the last decade, the Texas Legislature has made some progress in providing property tax relief, but the housing affordability crisis demands more action. Moreover, property taxes are not just a financial burden but are fundamentally immoral as they force Texans to perpetually rent from the government, functioning as unrealized capital gains and wealth taxes paid annually. This system makes it difficult for many families to build or pass on a legacy. As noted in the following three charts, property taxes have risen too fast for too long. Read the full testimony with charts and data here: https://www.vanceginn.com/letpeopleprosper/testimony-before-the-texas-senate-committee-on-finance-presented-by-vance-ginn-phd-on-september-4-2024
Chair Huffman and Members of the Committee, Thank you for the opportunity to testify today. I am Dr. Vance Ginn, president of Ginn Economic Consulting. Over the last decade, the Texas Legislature has made progress in property tax relief, but the affordability crisis demands more action. Property taxes are not just a financial burden—they are fundamentally immoral. They force Texans to perpetually rent from the government, functioning as unrealized capital gains and wealth taxes paid annually. This system makes it difficult for families with low or fixed incomes to build and pass on a legacy. Last session, despite a $32.7 billion surplus, new property tax relief was limited to just $12.7 billion. And the state budget increased by a record 32% in state funds from GAA appropriations to appropriations Although this was the second-largest tax relief amount in Texas history, property taxes increased by $165 million last year from excessive spending by local governments. The path forward is clear: spend less and reduce property tax rates rather than complicating the housing market with homestead exemptions, discounts, and abatements that make elimination more difficult. To eliminate property taxes, consider three simple steps:
This three-step process will help curb soaring property taxes and pave the way for a more prosperous future without property taxes to preserve life, liberty, and prosperity. Thank you for your time, and I’m glad to answer any questions.
The hearing is scheduled for today at 10 am ET at Longworth House Office Building: Hearing on the U.S. Tax Code Subsidizing Green Corporate Handouts and the Chinese Communist Party. Below is the video of the full hearing (my statement starts at time 27:30 with other comments throughout the 4-hour-long hearing). And below that is my written testimony based on this recent research on The Inflation Reduction Act's Costly New Tax Credits for Electric Vehicle Batteries and the policy brief. Your browser does not support viewing this document. Click here to download the document. Your browser does not support viewing this document. Click here to download the document. Texans are facing a crisis when it comes to paying for their skyrocketing property taxes, inflated bills, and saving for a rainy day. In fact, many Texans are living with the fear that exorbitant taxes could take their home away or keep them from buying their first home. The Foundation has developed a balanced, practical solution to lower property taxes by eliminating the maintenance and operations (M&O) property taxes while also funding the needs for critical services. Invited Testimony Before the Texas Senate Finance Committee https://www.texaspolicy.com/lower-taxes-better-texas-3/ Texans are facing a crisis when it comes to paying for their skyrocketing property taxes, inflated bills, and saving for a rainy day. In fact, many Texans are living with the fear that exorbitant taxes could take their home away or keep them from buying their first home. The Foundation has developed a balanced, practical solution to lower property taxes by eliminating the maintenance and operations (M&O) property taxes while also funding the needs for critical services. Invited Testimony Before the Texas House Ways & Means Committee https://www.texaspolicy.com/lower-taxes-better-texas-2/ Testimony before House Ways & Means Committee for HB 28 by Dr. Vance Ginn, Economist in the Center for Fiscal Policy.
https://www.texaspolicy.com/content/detail/texans-prosper-from-eliminating-business-franchise-tax AUSTIN – Texas Public Policy Foundation Economist Dr. Vance Ginn today gave invited testimony before the Texas Senate Finance Committee on an interim charge to study the economic benefits of phasing out the franchise tax and public testimony on an interim charge to improve budget transparency.
“Simply put, businesses don’t pay taxes; people do in the form of higher prices, lower wages, and fewer jobs available,” said Dr. Ginn. “No matter how you evaluate the franchise tax, commonly called the margin tax, it fails to be a simple tax, fails to meet revenue expectations, and fails to allow Texans the opportunity to reach their full potential. Texans would be best served by eliminating this onerous tax so that they will have available billions more in new personal income and thousands of new private sector jobs. Given the economic and fiscal uncertainty with the current state of the economy, a valuable path to elimination could be to phase it out over the next two budget periods, preferably by reducing the tax rates. For a more prosperous Texas, last session’s progress of cutting this business tax by 25 percent should be continued by putting the margin tax on a path to elimination. “Regarding budget transparency, it is reasonable to expect the Legislature to provide transparency and accountability of taxpayer dollars. A great way to do this is for the Legislature to convert from a strategy-based budget format to a program-based budgeting layout and provide budget information online in real time throughout the budget process. These would be great steps toward improving budget transparency so Texans can better evaluate how their dollars are spent.” Simply put, businesses don’t pay taxes; people do in the form of higher prices, lower wages, and fewer jobs available. Given that taxes exist to fund essential government services, the least burdensome taxes should fund conservative budgets, which grow by no more than population growth plus inflation.
The full testimony can be found here: http://www.texaspolicy.com/content/detail/testimony-eliminate-the-margin-tax-to-reach-texans-full-potential |
Vance Ginn, Ph.D.
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