The Lone Star State has long enjoyed the fact that there has been no state income tax levied in its entire history. But that has never been specifically prohibited without conditions in the state constitution — a fact that the Texas state legislature finally addressed this past spring after 179 years of statehood.
But, while a large majority of Texans approve the lack of a state income tax, not everyone is on board with banning it outright — in particular, state public-school educators.
Texas is one of only nine states that don’t have a broad-based personal income tax. With the possibility of adding an income tax being kicked around in Austin to raise additional revenue for several legislative cycles, lawmakers finally moved this past spring to nip such talk in the bud by referring to voters a constitutional amendment to codify a permanent state income tax ban. House Joint Resolution 38, passed on May 9, referred the matter to voters.
The question, which is Proposition 4 on the Nov. 5 statewide ballot, would prohibit the state legislature from establishing a personal state income tax.
An amendment approved in 1993, known as the Bullock Amendment, already prohibits the state from establishing an income tax without approval from voters, and any such tax must be earmarked to support education. Furthermore, two-thirds of revenue generated from any approved state income tax would be offset by cuts in personal property taxes.
But this new amendment would completely override the Bullock Amendment, and that’s what has state educators up in arms.
Several educational organizations, such as the Texas State Teachers Association, have come out against the amendment change, saying that it robs schools of a potential source of future funding.
“Proposition 4 is bad for public education,” TSTA President Noel Candelaria said. “It purports to ban a personal income tax in Texas. It doesn’t. But if adopted, it would remove from the state constitution a guarantee that any revenue raised by an income tax be dedicated to improving education funding.”
Candelaria noted that Texas voters aren’t likely to approve an income tax in the foreseeable future.
“But pressure for a new revenue source eventually will mount as our state’s needs grow,” he said. “Proposition 4 will not prohibit a future Legislature from approving an income tax on a two-thirds vote and spending the revenue however lawmakers wish. They could even use the new revenue to pay for tax breaks for wealthy corporations, while ignoring the needs of public schools.”
There is a second amendment on the Nov. 5 ballot that educators are supporting: Proposition 7, which would boost public education funding by $300 million.
This proposition would allow the state’s General Land Office to double the amount of revenue it could donate each year from state-owned land or properties to the Available School Fund for distribution among school districts.
On Proposition 4, the League of Women Voters notes that there are arguments both for and against a permanent ban on state income tax.
The league notes that a recent poll by the University of Texas at Austin and the Texas Tribune found that 71 percent of respondents oppose an individual state income tax and that the state’s low-tax, pro-growth approach promotes the state’s continued economic expansion and population growth.
However, the league also notes the amendment is not necessary because of the existing constitutional laws in place; and it would be shortsighted for today’s lawmakers and voters to take an income tax completely off the table if the need for one should arise in the future.
Moreover, any future state income tax could reduce the burden on businesses, which pay a higher proportion of taxes in Texas than in many other states. An income tax could also provide relief from high property and sales taxes, which are largely borne by the middle class and poor.
Early voting is underway in Ellis County and ends Nov. 1 in the lead-up to the actual Election Day polling on Nov. 5.