Originally published on Substack. 

​Texas has become the latest state to hit pause on data centers.

Gov. Greg Abbott’s new directive⁠ requires the PUC and ERCOT to audit every data center advancing through the grid-connection process before additional projects move forward.

Developers must disclose expected electricity and water use, public incentives, ownership, plans for producing their own power, cooling technology, and efforts to limit noise, traffic, light, and other local effects. Projects that do not comply can be denied access to the grid.

These are reasonable questions. Markets work best with reliable information. But according to ERCOT, the order has effectively paused all pending data-center projects⁠, with no clear timetable for completion.

That uncertainty has costs.

Texans Want Benefits, Not Bans

A new statewide poll⁠ found that only 8% of voters call data centers a top voting issue, while opinions move substantially when people receive more information. Abbott’s proposed guardrails received 82% support, including 94% among Republicans, 81% among independents, and 68% among Democrats.

But voters were not demanding prohibition. Support for nearby projects rose from 46%-45% to 55%-34% when respondents learned about jobs, school revenue, infrastructure improvements, and possible bill relief.
Texans want growth they can understand and see benefiting their communities. That is fair. It is not a mandate for central planning.

The Cloud Will Keep Growing

Data centers are the physical infrastructure behind the cloud⁠. Their servers process and store the information behind GPS, banking, telehealth, logistics, streaming, business software, artificial intelligence, and nearly every digital service Texans use.

Stopping construction does not stop that activity. Texans will keep sharing files, saving photos, navigating roads, streaming shows, and using AI. The servers will simply be built elsewhere.
​
New York has already imposed the nation’s first statewide moratorium on new hyperscale data centers⁠. Texas Senate Democrats now want an immediate Texas moratorium⁠.

Texas should not copy New York. Whether investment is stopped by an explicit ban or an open-ended political approval process, the result can be similar: broken deals, lost jobs, delayed generation, and projects redirected to other states or countries.

Data Centers Are the Convenient Scapegoat

Electric bills and water concerns are real, but data centers did not create every affordability problem.

A recent electricity-rate analysis⁠ found no quantitative evidence that data centers have historically been subsidized by other customers. Rates reflect inflation, fuel volatility, grid investments, plant retirements, market design, and government permitting and interconnection barriers.

Likewise, data centers currently account for less than 1% of Texas water use⁠. Usage varies widely by cooling system, including closed-loop designs that reuse water.

The answer is more supply, not less progress.

Let Texas Build

Texas needs faster permitting, more generation, more transmission, better water pricing, more reuse, stronger property rights, and more private infrastructure. Prices and voluntary contracts already force businesses to weigh land, power, water, labor, and risk better than politicians can.

As I have argued, Texas should choose innovation over intervention⁠, fix government utility failures rather than blame data centers⁠, and compete for this investment instead of regulating it away⁠.

Texas became America’s economic leader by building, not banning what politicians did not understand.
​
Let New York manage decline. Texas should keep building.

Originally published on Substack.

​​Texas leaders are finally talking about spending restraint. That is welcome. But Texans should not confuse a smaller agency request with a smaller government.
​
Governor Greg Abbott, Lt. Governor Dan Patrick, and Speaker Dustin Burrows recently directed most state agencies⁠ to reduce their base budget requests by 3% for the 2028–29 biennium.

Abbott promised “strict standards of efficiency and accountability,” Patrick said the guidance would keep Texas on a “fiscally conservative path,” and Burrows called it the baseline for a conservative budget focused on affordability and property tax relief. Those are worthy goals.

Now comes the hard part: proving it.

Three Percent of What?

A 3% reduction sounds substantial until taxpayers ask the obvious question: 3% below what?

Is the “base” last session’s agency request, the amount lawmakers appropriated, actual spending, or some administratively adjusted figure? The announcement does not make that comparison clear enough.

That matters because agencies are not being ordered to cut state spending by 3%. They are being asked to request 3% less from a baseline, while retaining the ability to seek additional money through exceptional items. Public education, Medicaid caseload growth, debt service, employee benefits, and education savings accounts are among the major exemptions.

Without clear accounting, agencies and lawmakers could maneuver around the target, increase total appropriations, and still claim a fiscal victory during an election year.

Texans deserve transparent budgeting that shows, side by side, the last appropriation, current estimated spending, the proposed appropriation, and the population-growth-plus-inflation benchmark.

Compare Apples to Apples

The correct comparison is appropriations to appropriations, not spending in one period against appropriations in another. Mixing those measures is an apples-to-oranges comparison that can disguise government growth.

On an apples-to-apples basis, state funds appropriations increased 42% over the last two budget cycles, while population growth plus inflation increased about 25%.

As I said in our joint statement from fiscal conservatives⁠, spending has substantially outpaced the average taxpayer’s ability to pay. Without actual appropriations cuts, the 3% request policy risks becoming “window dressing for political points in an election year.”

Jeramy Kitchen put it well: the goal should not merely be a smaller request but “restoring a culture of fiscal responsibility.” Bill Peacock noted that state funds appropriations have risen $110 billion, or 78%, over ten years, feeding a system organized around special interests. JoAnn Fleming was even more direct: conservatives did not fight merely to slow government growth. “We fought to shrink government.”

Property Taxes Still Rise

State leaders also cite $51 billion in property tax relief. But policymakers should explain exactly how that figure is calculated.

It is not all school district maintenance and operations rate compression. It also includes homestead exemptions and other tax preferences. Those are not economically equivalent.

Broad-based compression lowers rates for everyone. Exemptions narrow the tax base, shift burdens among property owners, and require more state tax revenue to finance the same level of government.

Meanwhile, total local property tax levies reached $89.4 billion in 2025, up roughly 22% since 2021. Historic “relief” alongside rising total levies tells us the underlying problem remains: excessive state and local spending.

Cut the Budget, Then the Tax

Texas can eliminate school district M&O property taxes through recurring surpluses dedicated to permanent rate compression. But those surpluses should come from disciplined budgeting, not temporary revenue windfalls or larger tax collections elsewhere.

Lawmakers should cut appropriations, keep future growth below population growth plus inflation, eliminate lower-priority programs, and strengthen state and local spending limits.

Real fiscal conservatism is not measured by press releases or shifting baselines. It is measured by a smaller government, lower tax burdens, and more freedom for Texans.

Spend less. Tax less. Let Texans prosper.

Originally published at Fraser Institute. 

​Texas ranks fourth nationally with an overall score of 8.15 in the Economic Freedom of North America report published by the Fraser Institute. The ranking, based on 2023 data, places Texas firmly among the most economically free states in the country.

But the more important signal in the data is not where Texas ranks now. It is how the state has had excessive spending and high property taxes weigh on economic freedom today and in the coming years. Texas’s economic success is visible first in the labor market.

According to the Bureau of Labor Statistics, Texas had one of the fastest job creation rates in 2023 (and thereafter). Employment growth has consistently exceeded the national average, while unemployment rates have generally remained below the U.S. rate.

When marginal tax rates on work are zero and labor markets are flexible, employers expand, and workers respond. The economic output data tell the same story.

The Bureau of Economic Analysis shows that Texas’s real GDP growth was a leader in 2023, driven by private-sector expansion. Capital flows toward jurisdictions where expected after-tax returns are higher, and policy risk is lower. Texas has benefited from that reality for decades.

The EFNA index explains why.

Texas scores well on taxation and labor-market regulation, largely because it imposes no personal income tax and maintains comparatively flexible employment rules. Those institutional features reduce distortions on work, saving and investment, raising long-run growth potential. Yet the same EFNA data also reveal why Texas’s ranking has flattened rather than improved in recent years. The binding constraint today is not necessarily taxes or labor policy. It is government spending growth at the state and local levels.

Since at least the mid-2010s, state and local spending in Texas has grown substantially faster than population growth plus inflation, meaning government now consumes a larger share of personal income than it once did.

EFNA measures spending relative to income because this ratio determines how much private activity is crowded out. When the government expands faster than the economy and taxes rise to fund it, economic freedom declines. Property taxes are the primary transmission mechanism.

Texas constitutionally bans income taxes, wealth taxes and state property taxes, but relies heavily on sales taxes to fund state spending and local property taxes to finance local budgets. Property-tax collections have risen faster than household incomes, raising effective tax rates even when statutory rates appear unchanged.

From an economic perspective, this is not neutral. Higher property taxes can raise the cost of housing and capital formation, reduce real wages over time, and slow investment, especially in high-tax metropolitan areas.

Government-sector employment growth reinforces the trend. BLS data show government employment rising faster than private employment in recent years. EFNA penalizes this pattern because it signals higher future tax burdens or debt service.

Economic theory predicts the outcome: slower productivity growth and weaker private-sector dynamism.

Directionally, Texas has held its rank while peer states have closed the gap. That is an important distinction. The EFNA report relies on 2023 data, which means recent policy changes about restraint are not yet reflected. What is reflected is the cumulative effect of spending decisions made over the past decade.

Rankings move slowly because institutions change slowly. That is a feature, not a flaw. The Fraser Institute’s findings are consistent across time and geography. States with higher economic freedom exhibit higher income levels, stronger labor-force participation, faster job creation and greater net in-migration.

Texas still benefits from those advantages. But the data now show that fiscal drift could erode the margin. The lesson is not ideological. It is arithmetic. Economic freedom helped build the Texas model. Preserving it now requires discipline.

If government spending growth continues to outpace population growth plus inflation, Texas’s comparative advantage will narrow, then disappear. Growth can mask that reality for a while. It cannot undo it.

Originally published on The Center Square.

Texas lawmakers are right to ask why health care keeps getting more expensive.

Texas Speaker Dustin Burrows created the House Select Committee on Health Care Affordability⁠ this year, and lawmakers have already heard testimony that health costs are consuming more of family budgets. Chairman James Frank said the goal should be to address root causes instead of playing “whack-a-mole with the symptoms.”⁠
​
That is right. The wrong answer is for Texas to copy Tennessee and Arkansas by forcing private health care companies to unwind longstanding business arrangements.

A pharmacy benefit manager, or PBM, is hired by employers, insurers, unions, and government programs to manage prescription drug benefits. PBMs negotiate with drug manufacturers, build pharmacy networks, process claims, help determine formularies, and operate mail-order or specialty pharmacy services. They exist because health plans need help managing drug spending in a system where patients rarely pay directly and prices are often hidden.

That is the larger issue. PBMs did not appear out of nowhere. They are a response to a government-dominated, third-party payer system that has separated patients from prices and doctors from many decisions. 

Federal rules, employer-sponsored insurance, Medicare, Medicaid, tax preferences, mandates, and government programs have created a system where someone else controls the dollars, so someone else controls the terms. 

PBMs, insurers, hospital systems and other intermediaries grow because the system rewards navigating complexity more than providing direct, transparent care.

That does not mean PBMs deserve a free pass. The market is concentrated, and the largest PBMs are tied to major insurers and pharmacy businesses. 

The Federal Trade Commission⁠ has raised concerns about specialty generic drug markups, steering, and affiliated pharmacy revenue. Patients and independent pharmacists have legitimate complaints about opaque rebates, reimbursement, formularies, and networks. 

Texas has already passed PBM reforms⁠, and lawmakers should keep demanding transparency and accountability when conduct harms patients.

But going after vertical integration itself mistakes the symptom for the disease.

Tennessee’s FAIR Rx Act⁠, signed in May, bars companies from owning or controlling both a pharmacy and a PBM or insurer above a 5 percent threshold and gives affected firms until 2028 to divest. 

Arkansas passed a similar law first with Act 624. Both are now legal warning signs. A federal judge blocked Arkansas’ law⁠ after finding it likely discriminates against out-of-state companies and interferes with TRICARE. 

Tennessee was sued almost immediately⁠, with CVS arguing the law threatens pharmacy access and could raise employer drug costs. Express Scripts has also sued Tennessee⁠, arguing the law would limit prescription access for many Tennesseans.

Texas should learn from those states before importing their courtroom experiment.

These access concerns should not be brushed aside. CVS operates retail pharmacies, specialty pharmacies, mail-order services, and clinics that many patients use because they are convenient and integrated with coverage. 

If these arrangements are forcibly unwound, the likely result is not a cleaner free market. It is fewer locations, fewer care options, fewer mail-order choices, more confusion, and longer waits, especially for patients with chronic conditions or specialty medications.

Anti-vertical integration bills do not lower drug list prices, speed generic competition, reduce hospital consolidation, unwind costly mandates, or restore the patient-doctor relationship. They tell private firms how they may organize, then hope lower costs somehow follow. That is not market reform. It is industrial policy.

Vertical integration can create conflicts of interest, and those concerns should be addressed when they harm patients. But integration can also reduce transaction costs, coordinate benefits, support mail-order delivery, and help patients access specialty medications. 

In a system already distorted by government and third-party payment, firms often integrate to navigate policy-created complexity. Punishing that response does not fix the underlying problem.

Texas should judge policies by results, not intentions. If companies mislead patients, require disclosure. If contracts are anti-competitive, enforce existing law. If public plans are overpaying, improve procurement. If patients are steered in ways that raise costs or reduce access, address that conduct directly. But do not assume vertical integration itself is the problem.

A better health care agenda would move control closer to patients and doctors by making prices clearer, expanding choice, reducing mandates, and removing barriers that make care more expensive. 

Texas should lead on health care affordability by restoring markets, empowering patients, and strengthening the patient-doctor relationship, not by following Tennessee into a costly mistake.

Originally published on Substack. 

​I’ve lived in Texas for 43 of my 44 years. I was born near Houston in November 1981. I grew up in South Houston. I earned my doctorate in Lubbock. I’m raising my family near Austin.
​
The only year I lived outside of Texas was during my service in the Trump 45 White House, when my family and I lived in McLean, Virginia.

I’ve spent my life watching Texas become the economic envy of America. People and businesses didn’t move here because government was bigger. They came because taxes were lower, regulations were lighter, housing was more affordable, and opportunity was greater.

The Texas model worked. But success can create complacency. And that’s what concerns me today.
Texas remains one of the strongest economies in America. Yet recent budget decisions suggest policymakers are beginning to drift away from the principles that made Texas successful in the first place.

That’s why the new Sustainable Budget Project⁠ by Americans for Tax Reform⁠ is so important. The project evaluates every state using a simple benchmark: government spending should generally grow no faster than population growth plus inflation. That reflects the average taxpayer’s ability to pay for government without sacrificing economic growth and opportunity.

Texas performs better than many states. But the trend lines deserve attention.

The Good News: Texas Hasn’t Lost Its Fiscal Foundation Completely

One of the most surprising findings from the Texas data in the Sustainable Budget Project⁠ is that Texas remains relatively close to a Sustainable Budget path over the last decade.

Chart 1: Texas Budget Comparison

In fact, ATR’s data show Texas spent less than a Sustainable Budget path on a cumulative basis over the last decade. For state funds, the cumulative amount was about $10,000 less per family of four than the Sustainable Budget benchmark.

That’s worth celebrating. It reflects reforms enacted over many years and the benefits of a growing economy. But it would be a mistake to stop the analysis there.

The Warning Sign Policymakers Shouldn’t Ignore

The decade-long trend looks better than what happened recently. Much better. Over the last two budget cycles, Texas lawmakers had a once-in-a-generation opportunity.

The state collected more than $50 billion in budget surpluses.

Those funds could have been used to permanently reduce the tax burden, accelerate the elimination of school district M&O property taxes, strengthen reserves, or return more money to taxpayers.

Instead, state appropriations surged.

The final 2026-27 budget reached approximately $338 billion in all funds, the largest budget in Texas history. State funds increased by 42% over the last two budget cycles, far exceeding population growth plus inflation.
​
Table 1. Texas State Appropriations Comparison

This is where the Sustainable Budget Project becomes so valuable. It doesn’t merely tell us where we’ve been. It helps us see where we’re headed.

Success Is Not a Permanent Condition

One reason Texas has prospered is because it consistently outperformed states that expanded government faster than their economies.

California provides the obvious example.

High taxes. High spending. High housing costs. Heavy regulation. People and businesses voted with their feet. Many came to Texas. But there is no guarantee that advantage lasts forever.
Economic freedom is not self-executing. It must be protected.

As I’ve written before in both my work on sustainable budgets and in “Texas Is Budgeting Like California,” states that allow government spending to grow faster than taxpayers’ ability to support it eventually lose their competitive edge.

Texas is still winning.
​
The danger is assuming that means it always will.

What a Sustainable Budget Looks Like

The goal isn’t necessarily austerity. It’s sustainability.

Chart 2: FY2027 Texas Budget Limit

According to ATR’s calculations, Texas could increase state-funds spending from approximately $98.2 billion in FY2026 to about $102.8 billion in FY2027 and remain within a Sustainable Budget framework.

Government can grow. It simply shouldn’t grow faster than population growth plus inflation.

That’s the formula I’ve advocated for more than a decade because it aligns government growth with taxpayers’ ability to pay. It leaves more resources in the productive private sector where innovation, investment, job creation, and rising incomes occur. (GINN ECONOMIC CONSULTING⁠)

Three Lessons for Texas Policymakers

First, don’t mistake past success for future success.

Texas remains a national leader, but recent spending trends should concern anyone who values limited government.

Second, surpluses should buy down taxes through lower tax rates, not grow government.

The best use of surplus revenue is permanent tax relief, particularly the state should reduce and ultimately eliminate school district M&O property taxes, considering the state doesn’t have a personal income tax.

Third, Texas needs stronger spending limits.

Recent reforms improved the state’s expenditure limit, but additional reforms are needed. The strongest path forward is a constitutional spending limit based on population growth plus inflation that covers the broadest possible share of the budget at the state and local levels with surpluses towards lowering taxes. (GINN ECONOMIC CONSULTING⁠)

Closing Thoughts

Texas became the Texas model because policymakers generally trusted people more than government. They restrained spending. They kept taxes relatively low. They allowed entrepreneurs, workers, and families to build prosperity. That formula worked.

The Sustainable Budget Project shows Texas remains in a stronger position than many states. But it also highlights a critical warning. Recent budget growth is moving in the wrong direction.

If Texas continues allowing government spending to grow faster than population growth plus inflation, the advantages that attracted millions of Americans here can fade surprisingly quickly.

Texas doesn’t need bigger government. Texas needs to recommit to the principles that made it successful. Economic freedom. Fiscal responsibility. Sustainable budgeting. And the belief that prosperity comes from people, not politicians.

What Do You Think?
​
Should Texas constitutionally limit spending growth to population growth plus inflation

Originally published on Substack.

​My work this week kept coming back to one theme: government keeps finding new ways to trap people.

Property taxes trap homeowners in perpetual payments to government. Exit taxes try to trap residents in failing states. Regulatory barriers threaten to trap innovation before it can grow. Bloated state budgets trap taxpayers with rising future burdens. And the Fed’s oversized balance sheet traps markets in a cycle of distortion and dependency.

Different issues. Same root problem.
Government grows, taxpayers pay, markets distort, and freedom shrinks.

That is why spending restraint, property rights, sound money, and economic freedom are not abstract ideas. They are the difference between owning your home or renting from government, moving freely or being punished for leaving, building the future or regulating it away, and saving in dollars that hold value or dollars that keep losing purchasing power.

Here’s the week’s breakdown.

Stop Renting From Government

A property tax revolt is building across America, and it is overdue.

You can pay off your mortgage, maintain your home, insure it, improve it, and still receive a government bill every year just to keep what you already own. Miss enough payments, and the government can ultimately take the property.

That is not true ownership.

That is renting from the government forever.

This is why states such as Florida, Texas, Wyoming, Nebraska, Iowa, Montana, and others are debating property tax relief or elimination. But too many proposals still miss the core point: property taxes are primarily a spending problem.

My latest piece, Stop Renting From the Government: Consider Wyoming, builds on my new Wyoming brief showing that the state spent roughly $4 billion above a population-growth-plus-inflation benchmark from FY 2017 to FY 2025 while building major reserves. The fiscal capacity for meaningful relief exists. What’s missing is the political discipline to restrain spending and return surplus dollars to taxpayers.

That same principle drives my new national report, Securing Ownership by Eliminating Property Taxes, which uses Montana as a case study. Montana is especially important because it has no broad statewide sales tax, yet spending has still outpaced sustainable limits. That proves the problem is not a lack of revenue. The problem is government spending too much.

Homestead exemptions, assessment caps, targeted rebates, and one-time checks may sound good politically, but they mostly shift burdens and leave the spending machine untouched. The better path is strict state and local spending limits tied to population growth plus inflation, surplus-driven rate compression, school finance reform, and constitutional taxpayer protections.

Read the Wyoming piece here, the Montana framework here, and share the Wyoming property tax thread on X.

Let AI Build

AI infrastructure is not abstract.

It needs land, power, fiber, water, transmission, and data centers on the ground. Kansas can either welcome that opportunity with light-touch rules and fast permitting, or it can let local zoning, regulatory uncertainty, and political fear hand the future to larger, politically connected firms that can afford the compliance costs.

In my piece for Kansas Policy Institute, Kansas Should Welcome AI Growth, Not Zone It Away, I argue that Kansas does not need subsidies or corporate welfare to benefit from AI infrastructure. It needs predictable, market-driven rules that let builders build, communities benefit, and competition work.

Regulatory bottlenecks rarely protect the little guy. More often, they protect incumbents by raising the cost of entry.

The AI economy will not wait for states to get comfortable. The infrastructure will be built somewhere. The question is whether Kansas and other states want more opportunity, investment, tax base, and energy innovation, or whether they want to regulate the future away.

Exit Taxes Admit Failure

When people and capital leave high-tax states, politicians have two choices.

They can reform the policies that drove people away, or they can punish people for leaving.

Too many are choosing the second option.

In my latest piece for AIER, Exit Taxes Won’t Save Failing States, I argue that exit taxes are not serious fiscal policy. They are a confession of failure.

Economic freedom means people can move to where they are treated best. Families leave when taxes are too high, housing is too expensive, regulation is too heavy, crime is too high, or opportunity is better elsewhere. Businesses move when the policy environment becomes hostile to investment, hiring, and growth.

The right response is not to trap people.

The right response is to compete for them.

Flatten taxes. Restrain spending. Reduce red tape. Protect property rights. Make the state worth staying in.

Exit taxes are the policy equivalent of a bad business charging customers a fee to stop shopping there.

Texas Needs Accountability

Episode 200 of the Let People Prosper Show is here, and we did not spend it on a highlight reel.

I sat down with Jeramy Kitchen, president of Texas Policy Research, for a serious conversation on whether the “Texas Miracle” still matches reality. We talked about rising government spending, persistent property tax pain, school finance, corporate welfare, and the need for real accountability in a state that too often relies on branding instead of restraint.

Texas still has enormous advantages: no personal income tax, a dynamic economy, energy abundance, entrepreneurship, and a strong culture of work. But those advantages must be protected. A reputation for freedom is not self-executing.

The state has to earn it every session.

That means real spending restraint, property tax elimination through surplus-driven compression, broader school choice, less corporate welfare, and more respect for taxpayers.

You can listen to Episode 200 on Apple Podcasts, watch it on YouTube, and share the episode thread on X.

Shrink the Fed

With Kevin Warsh now sworn in as Federal Reserve Chair, the moment demands more than rate talk.

The deeper issue is the Fed’s balance sheet, which remains far too large and continues to distort markets, punish savers, reward leverage, and enable congressional fiscal recklessness.

In Kevin Warsh’s Fed Moment, I argue that real monetary reform should mean a rules-based framework for price stability, a path toward a 0 percent inflation target, and a dramatically smaller balance sheet. My North Star is a Fed balance sheet capped near 6 percent of GDP, compared with roughly 20 percent today, until it can be eliminated.

That means letting short-term assets mature without rolling them over, exiting mortgage-backed securities, and returning the Fed to a narrow lender-of-last-resort role until we can ultimately move beyond central banking altogether.

This connects directly to property taxes, exit taxes, and state spending. When government grows faster than the productive economy, people pay through higher taxes, higher prices, distorted markets, trapped mobility, and weaker prosperity.

Sound money and spending restraint go together.

The Bottom Line

This week’s lesson is clear: government is too often trying to trap people.

Property taxes trap homeowners in perpetual payments. Exit taxes try to trap residents geographically. Regulatory barriers trap innovation. Monetary distortions trap markets in dependency. Excessive spending traps taxpayers with rising future burdens.

The answer is not better central planning.

The answer is to constrain government, protect property rights, restore sound money, and let free people and markets allocate resources better than politicians ever can.

That is how we let people prosper.

Five Takeaways for Policymakers

1. Property tax relief without spending limits is cosmetic.

States should enact binding expenditure limits tied to population growth plus inflation, use surpluses for rate compression, and protect taxpayers constitutionally.

2. Exit taxes signal failure.

If people are leaving, fix the tax, spending, regulatory, and public safety problems that pushed them out.

3. AI infrastructure needs permission to grow.

States should streamline permitting, avoid subsidies, reject local regulatory choke points, and let competition work.

4. The Fed’s size matters as much as rates.

A bloated balance sheet distorts markets and enables fiscal recklessness. Rules-based reform and balance-sheet reduction should be central.

5. Texas and every other state must earn their reputation daily.

Prioritize taxpayers over cronies, transparency over branding, and spending restraint over expansion.

Join the Conversation

Thank you for reading and sharing this work. If this added value, please forward it to a policymaker, staffer, journalist, homeowner, business owner, or friend who cares about ownership, mobility, sound money, and prosperity.

I’d especially like to hear from you: What is the best path to eliminating property taxes in your state?
​
Drop your thoughts in the comments, share this post with someone who should read it, and follow me on X for real-time updates.

In Episode 200 of the Let People Prosper Show, Vance Ginn interviews Jeramy Kitchen, president of Texas Policy Research, about the future of fiscal conservatism and liberty in Texas.

The conversation explores the growing disconnect between Texas’s reputation for freedom and the reality of rising government spending, persistent property taxes, corporate welfare, and limited transparency inside the legislative process.

Vance and Jeramy also discuss:

The importance of legislative transparency, spending restraint, school choice, regulatory overreach,
and how Texas can remain a national leader for economic freedom and prosperity.

This special 200th episode also reflects on the importance of citizen engagement and accountability in protecting the principles that made Texas successful.

Listen on YouTube, Apple Podcasts, and Spotify. Show notes at Substack at vanceginn.substack.com. 

Originally published at the Houston Chronicle. 

Friday is the last day for Texans to appeal their property taxes, and there’s no doubt that plenty of Texans are rightly frustrated that their bills keep rising even after years of proclaimed “relief.” Local property tax collections are now about $90 billion per year, even as state lawmakers cite “an overwhelming $51 billion in relief.”

The problem is not that Texas lacks the tax revenue to cover state needs or the policy tools to address the problem. It is that the state has tried to lower property tax bills without fixing the structure that causes property taxes to grow year after year.

The ongoing debate between Gov. Greg Abbott and Lt. Gov. Dan Patrick reflects this tension. Abbott has spoken openly about eliminating school district maintenance and operations property taxes for homeowners, while Patrick has emphasized expanding homestead exemptions on those property taxes. 

Both approaches appeal to voters. But exemptions, limitations on tax revenue growth and other partial fixes do not reduce the size or scope of government. They redistribute who pays for it while allowing spending to continue. Nothing is free, including government spending.

At its core, this debate is not just about taxes. It is about the proper role of government. Government exists to preserve liberty, protect property rights, enforce contracts and provide limited public services. It is not meant to permanently claim a share of what people own or to grow faster than the average taxpayer’s ability to sustain it. When the government exceeds those limits, taxes rise regardless of how they are labeled.

As a native Texan and an economist who has spent more than a decade studying state and local public finance, including detailed work on property tax elimination, I have reached a consistent conclusion. Eliminating property taxes is morally the correct thing to do and can be done either quickly or gradually. What matters is whether lawmakers commit to spending discipline and permanent tax rate reduction rather than temporary relief.

The most logical place to start is school district maintenance and operations property taxes, which make up the largest share of the property tax burden. Public education is already governed by state funding formulas, mandates and recapture rules. If the state largely controls the system, it should fund it directly rather than forcing homeowners to pay a perpetual tax on homeownership.

The lieutenant governor has claimed that eliminating school property taxes would require a massive sales tax increase. That’s not true. According to my calculations, by spending less and broadening the sales tax base — in ways such as by taxing services and currently exempt items — Texas could replace school district M&O property taxes with a sales tax rate no higher than 9 percent, compared with today’s 8.25 percent combined state and local rate. 

The key variable that is too often overlooked is not the tax base or the tax rate — it is excessive government spending. When spending is limited, base broadening can support necessary revenue without punishing taxpayers. That restraint requires a binding limit on state and local spending growth tied to population growth plus inflation, a principle central to sustainable budgeting. 

When the government grows more slowly than the average taxpayer’s ability to pay, excess taxpayer money collected — known as surpluses — emerges. Over the last two budget cycles, Texas has had more than $50 billion in state budget surpluses because of a fast-growing economy. Applied consistently through a surplus buydown with tax revenue collected above population growth plus inflation, those funds could have dramatically lowered school property tax rates without raising taxes.

Local control would remain intact. School boards would still operate schools. Voters would still approve bond elections for facilities and repay that debt locally until it matures. What changes is the funding of day-to-day operations, not who governs.

Cities, counties and special districts should eliminate their property taxes through the same surplus buydown principle applied locally. Local governments should be allowed to rely more on sales tax revenue — but only if that revenue is dedicated to reducing property tax rates rather than expanding spending. Unlike property taxes, sales taxes follow economic activity more closely, naturally capping spending and generating surpluses during expansions while not overly burdening taxpayers during recessions.

Debt should be treated differently. Voter-approved debt should remain local and be paid by the voters who approved it until it matures. The state should not redistribute or socialize local debt across taxpayers who never consented to it.

Texas once led the nation by pairing low taxes with disciplined spending. In recent years, that leadership has slipped as spending has grown faster and relief has increasingly relied on homestead exemptions rather than structural reform. Other states are moving faster on tax modernization and fiscal restraint. Texas risks falling behind if it continues to avoid hard choices.

The time to lead is now. With clear limits on government growth, zero-growth levy rules without voter supermajority approval, surplus buydowns, a modern tax base focused on final consumption rather than property ownership, and political courage, Texas can restore conservative principles to fiscal policy and once again set the standard for economic freedom.

Originally published on Substack.

Texas has a choice: build enough power for the future or regulate its way into energy scarcity.

Today, the Texas House Committee on State Affairs is holding a hearing on microgrids and distributed energy resources. That may sound technical, but it is really about whether Texas families get more reliable electricity at lower cost or whether government keeps slowing down the supply we need.

Energy Abundance, Not Scarcity

Texas became America’s energy leader because it trusted competition, private investment, property rights, and innovation more than central planning.

That should remain the North Star.

The goal should not be to manage scarcity through mandates, subsidies, and bureaucratic control. The goal should be energy abundance.

Electricity prices follow basic economics. When demand rises faster than reliable supply, prices rise and reliability weakens. When supply expands, competition works, and infrastructure keeps pace, price pressure falls.

This is not complicated. Texas needs more power, built faster, with less government in the way.

Families Feel The Pain

This is already a kitchen-table issue.

A University of Houston and Texas Southern University survey found that nearly 45% of Texas households pay more than $200 per month for summer electricity, and about one-third spend 7% or more of household income on energy.
That means higher electric bills are crowding out groceries, rent, medical care, savings, and opportunities for families.

Politicians often respond with rebates, subsidies, or temporary relief. That may sound compassionate, but it does not fix the problem. It often hides the problem.

The real answer is supply.

More generation. More storage. More transmission efficiency. More distributed energy. More private capital. More competition.

Growth Is Success

Texas is growing because people and businesses want to be here.

Families are moving here. Manufacturers are expanding here. Hospitals, logistics hubs, data centers, and energy-intensive industries need more electricity.

The Energy Information Administration expects U.S. electricity load to rise in 2026 and 2027, with ERCOT and PJM among the regions where growth pressures are especially important. EIA also estimates that data center load is emerging as a major driver of long-term U.S. electricity demand growth, though those estimates stew questionable given flawed projections.

That should not scare Texas lawmakers. It should focus them. Texas does not have a demand problem. Growth is success. Texas has an infrastructure, permitting, and regulatory alignment problem.

Microgrids Can Help

Microgrids and distributed energy resources can help meet this moment.

They allow large-load users, hospitals, campuses, rural communities, manufacturers, and data centers to bring their own power, manage their own risks, and reduce stress on the broader grid.

They can add supply closer to where power is needed. They can reduce congestion. They can improve resilience during outages. They can give customers more control over their energy costs.

This is economics at work. Let those who need power procure it, produce it, store it, and pay for it through voluntary contracts.

But microgrids will work only if Texas does not regulate them like monopoly utilities.

Don’t Regulate Innovation Like Monopoly Utilities

Texas should create a clear legal path for off-ERCOT, behind-the-meter, and islanded microgrids to generate, distribute, and sell power to defined customers without automatically triggering full public utility regulation.

If a system does not interconnect with ERCOT, does not use public transmission, and does not shift costs onto ratepayers, it should not be buried in utility-style red tape.

If that system later connects to ERCOT, imports power, exports power, or participates in wholesale markets, then appropriate oversight should apply.

That is the right balance: freedom first, regulation only when the broader grid is affected.

Other States Are Moving

Texas should lead, but other states are already moving.

New Hampshire’s HB 672 created a category for off-grid electricity providers and exempts them from certain public-utility regulations while they remain independent from the regulated grid.

Utah’s SB 132 created requirements for serving large-scale electric loads and helped clarify how large users can be served through new contractual and generation arrangements.

These reforms are not perfect, but they move in the right direction.

Private capital should be allowed to build energy infrastructure without being forced through a regulatory model designed for monopoly utilities.

Texas should do better.

Permitting Is The Bottleneck

America often takes longer to approve energy infrastructure than it should take to build it.
That is economic malpractice.

Permitting delays raise costs, slow investment, weaken reliability, and block markets from responding to real demand. When Texans need more power and private capital is ready to build, government should not stand in the way.

This is where economics and common sense meet. A market cannot solve scarcity when government blocks the supply response.

That is why microgrids matter. They can bypass some of the bottlenecks by allowing private users to bring their own power rather than waiting years for traditional infrastructure to catch up.

China Is A Warning, Not A Model

China’s centralized system is not a model Texas should copy. But its speed should be a warning.

Global Energy Monitor found that China began construction on 94.5 gigawatts of coal power capacity in 2024 after a major permitting surge in prior years.

The lesson is not to imitate China. The lesson is that energy abundance is economic strength. Texas can win the energy race the Texas way: with freedom, competition, private property, and private investment.

Don’t Single Out Data Centers

Data centers are becoming an easy political target. That is a mistake.

They should pay their electric bills like every other customer once they are operating. They should not get special subsidies. They should not shift costs to families. But they also should not be forced to pre-pay, self-finance, or shoulder special grid costs that no other building or industry must pay.

Office towers do not pre-pay the grid before opening. Hospitals do not pre-pay the grid before serving patients. Manufacturers do not pre-pay the grid before producing goods. Retail centers do not pre-pay the grid before hiring workers.

So why single out data centers?

Forcing one sector to meet special obligations that others do not face is not fairness. It is discrimination. It picks winners and losers. It punishes growth. It tells innovators that Texas welcomes investment until politicians decide their industry is too visible.

That is not the Texas model.

The right approach is simple: cost causation, not political targeting. If a customer imposes costs on the system, rates and contracts should reflect those costs. But government should not invent special rules for one industry because it is growing fast.

Four Principles For Texas

First, protect the right to build private power.

Off-ERCOT, islanded, and behind-the-meter microgrids should be allowed to serve defined customers without being regulated like public utilities.

Second, clarify interconnection rules.

Developers need certainty. If a project stays off the grid, it should face a light-touch framework. If it connects to ERCOT, then ERCOT rules and reliability protections should apply.

Third, apply equal treatment.

Data centers, manufacturers, hospitals, campuses, and other large-load users should pay for the electricity they use and the costs they impose. But government should not force one industry to carry special burdens no other customer carries.

Fourth, avoid subsidies and favoritism.

Public-private partnerships and subsidy-driven programs may sound appealing, but they often distort markets, shift costs to taxpayers or ratepayers, and invite government to choose winners and losers.

True resilience comes from competition, redundancy, price signals, and decentralized decision-making.

Let Private Capital Build

Texas does not need more government micromanagement of electricity.

It needs more supply. Faster permitting. Clearer rules. Stronger property rights. More private capital.

Microgrids and distributed energy resources are not a silver bullet, but they are an important part of an energy abundance agenda. They can help Texans add power where it is needed, reduce strain on the grid, strengthen reliability, and lower long-term costs.

The Legislature should resist turning this into another regulatory maze. Let entrepreneurs build. Let consumers contract. Let private capital solve problems. Let large users bring their own power without forcing families to pick up the tab.

More power, built faster, with less government in the way is how Texas can stay the energy capital of America and let people prosper.

Three Key Takeaways For Policymakers

1. Texas needs more supply, not more control. Rising electricity demand is a sign of growth and opportunity. The answer is energy abundance through private investment, faster permitting, and competitive markets.
2. Private microgrids should not be regulated like monopoly utilities. Off-ERCOT, behind-the-meter, and islanded systems that do not shift costs onto ratepayers should have a clear, light-touch path to build.
3. Government should not pick winners and losers. Singling out data centers or any fast-growing industry for special costs no other customer pays would punish investment and weaken Texas’ competitive advantage.

Get Involved

Texas can lead the next era of energy abundance, but only if lawmakers hear from Texans who want reliability, affordability, and freedom to build.

Contact your state legislators. Submit comments on energy policy. Share this newsletter with friends, business leaders, and policymakers who care about keeping Texas prosperous.

Originally published on Substack. 

Yesterday, I submitted written testimony to the Texas House Select Committee on Health Care Affordability with a straightforward message: stop layering new mandates onto a broken system and start rebuilding health care around patients.

That is the foundation of my work at Ginn Economic Consulting, my recent piece Empower Patients, Not Bureaucracies, and the broader Empower Patients Initiative, which I helped advance with Americans for Tax Reform and Dr. Deane Waldman. The same framework is also developed in our re-released book with a different title, Become an Empowered Patient.

The core point is simple: affordable care will not come from empowering more bureaucracies. It will come from empowering patients.

That should be the North Star for Texas policymakers.

Texans do not need another study to know health care is broken. They live it every month through rising premiums, higher deductibles, surprise bills, delayed care, shrinking physician independence, and wages squeezed by employer-sponsored coverage. They see a system with more “coverage” but less affordability, less transparency, and less trust.

That is not a functioning market. It is a heavily distorted system shaped by third-party payment, government favoritism, and bureaucratic control.

Coverage Is Not Care

One of the biggest mistakes in health policy is treating coverage and care as if they are the same thing.

They are not.

A bigger insurance card does not automatically mean better access, lower prices, or stronger outcomes. In practice, the opposite often happens. When patients are disconnected from real prices, doctors are buried in compliance, and payment is routed through layers of insurers and government programs, the system becomes more expensive and less personal at the same time.

That is why serious reform should not begin with “How do we expand bureaucratic coverage?” It should begin with “How do we restore the patient-doctor relationship and let markets work again?”

That is the animating principle of the Empower Patients Initiative: move power away from institutions and back to people.

The Tax Code Helped Create This Mess

One of the most underappreciated drivers of our current system is the federal tax exclusion for employer-sponsored insurance.

That policy helped push coverage into the workplace, hide the true cost of compensation, reward more expensive plans, and disconnect patients from the actual price of care. It encouraged a world where employers, insurers, and government programs make most of the decisions while patients try to navigate the consequences.

That is one reason I argued in Empower Patients, Not Bureaucracies and Solving the Healthcare Affordability Crisis that the real problem is not a lack of bureaucratic oversight. It is a system of warped incentives that suppresses price signals, shields payers from accountability, and leaves patients with less control than they should have.

That is not a market failure. It is a policy failure.

Transparency Helps Only If Patients Can Act

There is plenty of discussion right now about price transparency. Good. People should know what care costs.

But transparency alone is not enough.

What price are we talking about? The hospital list price? The negotiated insurer rate? The Medicare reimbursement? The cash price? The patient’s out-of-pocket estimate? Those can be radically different numbers. So if lawmakers simply require more price posting without changing who controls the dollars and the decisions, transparency becomes one more compliance exercise.

Transparency without ownership is noise.

For transparency to matter, patients need the power to act on the information. That means more direct primary care, more cash-pay options, more flexible health savings arrangements, and fewer barriers blocking real alternatives. That is why the Empower Patients Initiative focuses on restoring buyer-seller relationships in health care rather than just adding new reporting requirements to the old system.

The Reform Agenda Texas Should Pursue

If Texas wants to lead, it should stop trying to patch over a broken structure and instead move toward a patient-centered market.

That means expanding direct primary care and direct doctor-patient contracts. It means reducing mandates that drive up premiums. It means pairing catastrophic coverage with patient-controlled accounts. It means removing barriers to entry so more providers can compete. It means protecting independent physicians from regulatory overload. And it means treating transparency as a tool instead of pretending it is the cure.

I have made that case consistently in Empower Patients, Not Bureaucracies, Solving the Healthcare Affordability Crisis, and Stop Propping Up Obamacare. The common theme is simple: if you keep subsidizing and regulating a broken structure, you get a more expensive version of the same broken structure.

The better answer is more freedom, more competition, and more direct accountability.

Fix Medicaid by Trusting Texans

The same principle applies to Medicaid.

Medicaid is supposed to help vulnerable Texans, but too often it traps them in a system with weak access, low provider participation, and expensive, hospital-centered care. Texas should not define success by how well it processes claims through a bureaucracy. It should define success by whether patients can actually get timely, quality care.

That means pushing for more state flexibility, more patient-centered options, and more room for innovative delivery models outside the usual administrative maze. A Texas model should focus on portable dollars, direct care, community and charitable support, and stronger incentives for responsible use of resources.

Trust Texans more. Trust Washington less.

Don’t Chase Every Villain of the Week

There is also a growing temptation to fixate on individual middlemen, especially pharmacy benefit managers.

They deserve scrutiny. But they are not the root problem.

PBMs are one manifestation of a third-party payment architecture that distorts incentives across the whole system. If lawmakers regulate one intermediary without fixing the underlying money flow, the dysfunction will simply reappear somewhere else.

That is why policymakers should focus less on chasing symptoms and more on repairing the structure itself. Fix the incentives. Fix the payment distortions. Fix the barriers to direct exchange. A lot of the middleman pathology shrinks once patients and doctors regain more control.

This Is Economic and Moral

At bottom, this is not just an economic issue. It is a moral one.

Patients are not billing codes. Doctors are not paper-pushers. Families should not need a bureaucratic decoder ring just to get basic care. A decent health system should be built on trust, choice, responsibility, useful transparency, and accountability grounded in voluntary exchange.

That is why the Empower Patients Initiative matters. It is not just another policy package. It is a shift in orientation away from bureaucratic control and back toward a system that treats people like adults.

That is how we improve access.

That is how we lower costs.

That is how we get better outcomes.

That is how we let people prosper.

Three Takeaways for Policymakers

1. Shift control to patients.

Expand direct primary care, patient-controlled accounts, cash-pay competition, and other models that reconnect people to doctors and prices, as outlined in the Empower Patients Initiative.

2. Fix incentives, not symptoms.

Reduce mandates, unwind third-party distortions, and stop propping up bureaucratic structures that separate patients from care, as I argued in Empower Patients, Not Bureaucracies and Stop Propping Up Obamacare.

3. Use transparency wisely.

Transparency helps only when patients can act on it with real alternatives and more control over their own health care dollars.

Health care reform should start with a simple test:

Does this policy move power from bureaucracies to patients?

If yes, advance it.

If no, reject it.

That is the standard Texas should use.

Thank you for reading, for supporting my work, and for sharing it with others. I’m grateful for the opportunity to keep doing this through Ginn Economic Consulting, helping provide a North Star for policymakers who want sound reforms that actually let people prosper. If you are a policymaker, organization, or media outlet looking to go deeper on these reforms, I am always glad to speak at events, do interviews, join podcasts, and meet with leaders across Texas and the country.
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You can read more at vanceginn.com, subscribe at vanceginn.substack.com, explore the broader reform framework at EmpowerPatients.info, and get the book Become an Empowered Patient.