Vance Ginn Economics
  • Home
  • About
  • CV
  • Media
  • Podcast/Speeches
  • Blog/Research
  • Research
  • Teaching
    • ECON 2301-Princ of Macro
    • ECON 2302-Princ of Micro
    • ECON 3352-Energy Eco
  • Home
  • About
  • CV
  • Media
  • Podcast/Speeches
  • Blog/Research
  • Research
  • Teaching
    • ECON 2301-Princ of Macro
    • ECON 2302-Princ of Micro
    • ECON 3352-Energy Eco

Remember the Taxpayers

10/7/2021

 
Texas and football go hand-in-hand. There is nothing like the two-minute drill at the end of a game with increased adrenaline pushing you on to victory. Texas lawmakers are likely feeling a similar jolt in an effort to appropriate the remaining $16 billion of the $40 billion that Congress sent to Texas in the American Rescue Plan Act (ARPA) earlier this year.

The Legislature has done a good job so far this year in keeping a responsible budget, but these federal funds could tempt lawmakers to spike the football early—allocating ARPA money that doesn’t help the Texas taxpayer while putting the nation further into debt. In fact, a responsible approach would lead Texas to reject these funds, given the state has a large budget surplus, though there’s likely no political will to do so.

Let’s return to the first quarter of the game.

The Legislature passed the 2022-23 state budget well below TPPF’s Conservative Texas Budget (CTB), which sets a maximum threshold on the budget based on the average taxpayer’s ability to pay for it (as measured by population growth plus inflation). And lawmakers parked $12 billion in the state’s rainy day fund.

This approach maintained the overall strategy that the Legislature has been operating under for the last four budgets. By staying within the CTB maximum threshold, and passing into law a stronger spending limit this year, lawmakers pledged to keep more money in taxpayers’ pocket.

Now the state is in the fourth quarter and is determining how to allocate the ARPA funds, which are your taxpayer dollars. The nearly $16 billion offers plenty of opportunity—both good and bad—for  lawmakers to spend hard-earned taxpayer dollars.

The game plans in the Texas Senate with SB 8 and the House with HB 145 are largely the same, with just a $350 million difference. Most items appear to abide by the restrictions on the use of funds outlined by the U.S. Treasury’s interim guidance. So far, so good. But about $500 million is being set aside for university construction in both bills, which doesn’t count as infrastructure (the feds define infrastructure as sewer, water, and broadband). How is this a good use of taxpayer dollars?

In their current plans, both start strong with over $7.2 billion designated to pay the outstanding debt owed to the U.S. Treasury’s Unemployment Trust Fund and to replenish most of what was in the fund pre-shutdown. This is essential because without paying, this there would be a huge spike in employer taxes that support this fund. But we would recommend $7.8 billion for full funding to provide a better cushion.

The next strong play in both plans is to allocate $3.7 billion for public safety and criminal justice. These funds appear to be allocated to swap with general revenue funds already appropriated in the current budget cycle for border security and wall thereby not further growing spending. This could also free funds up later for property tax relief. This allocation provides serious relief to taxpayers as the state has been subsidizing the border crisis for the rest of the country because of the inept leadership on this issue in Washington.

These strong plays follow two-thirds of the Foundation’s winning strategy for ARPA funds. The third one is necessary to get Texas across the goal line—property tax relief.

Burdensome local property taxes continue to climb, forcing some Texans to delay major life decisions like marriage and home ownership. Using the rest of the ARPA funds to add to the at least $2 billion in SB 1 to reduce school district M&O property taxes for the 2022-23 school year would help lower tax bills at a time when many taxpayers are suffering from the effects of the shutdowns. This combination of plays along with HB 90 and other moves could eliminate property taxes by 2033. Three states have already started cutting taxes using ARPA funds so Texas shouldn’t delay.

In addition to using ARPA funds for the plays above to move the down the field, the Legislature should use best practices with these funds for transparency and accountability for taxpayers. Any use of ARPA funds must be for only one-time expenditures, which will help avoid a fiscal cliff like that after Obama’s one-time “stimulus” funds in 2009 dried up. ARPA funds should also be separated from Texas’ base budget. And lawmakers should post the allocation and distribution of funds on a website.

The Legislature is in the final two minutes of the fourth quarter. This is where champions are made. Let’s ensure Texas taxpayers win the day with a responsible game plan, rather than irresponsibly spending ARPA fund.

Commentary: www.texaspolicy.com/remember-the-taxpayers/

Comments are closed.

    Vance Ginn, Ph.D.
    Chief Economist
    ​TPPF
    ​#LetPeopleProsper

    Vance Ginn, Ph.D., is founder and president of Ginn Economic Consulting, LLC. He is chief economist at Pelican Institute for Public Policy and senior fellow at Young Americans for Liberty and other institutions. He previously served as the associate director for economic policy of the White House’s Office of Management and Budget, 2019-20.

    Follow him on Twitter: @vanceginn

    View my profile on LinkedIn

    Archives

    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    January 2015
    November 2013
    September 2013
    May 2013
    February 2013
    August 2012
    July 2012
    January 2012
    May 2011
    April 2011

    Categories

    All
    Biden
    Book Reviews
    Budgets
    Capitalism
    Carbon Tax
    Congress
    COVID
    Debt
    Economic Freedom
    Economic Prosperity
    Economy
    Education
    Energy Markets
    Fed
    Free Trade
    Ginn Economic Brief
    Healthcare
    Immigration
    Inflation
    Interview
    Jobs Report
    Let People Prosper
    Licensing
    Louisiana
    Margin Tax
    Medicaid
    Minimum Wage
    Occupational Licensing
    Opportunity Project
    Pensions
    Podcast
    Poverty
    Property Taxes
    RAB
    Regulation
    Rules
    School Choice
    Socialism
    Spending Limits
    Taxes
    Tax Foundation
    Testimony
    Texas
    Transparency
    Video
    White House

    RSS Feed

Proudly powered by Weebly