Corpus Christi Caller-Times. Aug. 13, 2014.
Plenty for Texas to brag about, but there are limits
Texas Comptroller Chief Revenue Estimator John Heleman made some eye-opening observations recently about the booming Texas economy and its effect on taxation.
The state continues to be a job-creation leader, making a 3.3 percent gain from June of last year to June of this year, compared with the national gain of 1.8 percent. Heleman noted that Texas, if it were its own country, would be the world's 12th largest economy, right between Canada and Australia.
Imagining Texas as its own republic is popular historically — it used to be one. But talk of Texas as its own 'nother country has become more prevalent in recent years. Our state leaders take a cocky tone with the powerful political enemies they've made in Washington, partly because there's economic backup for their cockiness.
They credit the Texas Miracle to their low-tax, low-regulation policies and call attention to the contrast with the federal government's approach. The job growth engine continues to be natural resource-based. We have oil. Not everybody does, and therefore it isn't the solution to all things in all states.
But there's something to be said for Texas' approach in developing its resources. New ways of getting the oil required intellect, ingenuity and the aforesaid low-regulation attitude toward using those new ways. There's every reason to expect the Miracle to continue.
This kind of success in this low-tax state leads inevitably to talk of lowering Texas' low taxes even further. A state law passed last year requires a cut in the business franchise tax next year if revenue is sufficient — and Heleman says it'll be sufficient.
The problem with this law and with the attitude that inspired it — that we should cut taxes as soon as we start getting ahead — is that it ignores growth's growing pains. Texas has plenty of those.
Its roads are being ground up by oil boom traffic — so badly that the state at one point last year decided to grind 80 miles of paved road into gravel, but later backed off.
Bad roads aren't the only growing pains. Prosperity has lured new residents in large numbers — residents in need of social services, whose children are in need of schooling. Higher education in Texas is becoming increasingly expensive — to students through rapid tuition inflation, and to local property owners through tax increases by community college districts.
On the subject of schools and property taxes, Heleman said something we found particularly alarming: Local schools would receive an increase in local revenue, he said, because of increasing home prices.
See the problem here — and how ingrained it has become? There seems to be zero hesitance to lower the business franchise tax — and zero concern about rising local property taxes.
Not only that, but why is it assumed automatically that higher property valuations will mean higher revenue? What ought to be assumed instead is that local governments and school districts will lower their tax rates sufficiently to offset the rise in valuations and that they'll get their revenue growth from actual economic growth — new houses, new storefronts, taxable properties that didn't exist the previous year.
Local taxpayers need to show their state and local elected officials what a low-tax state really means — because clearly they have the wrong concept of one. Rather than disputing property valuations with their appraisal districts, local taxpayers should exercise their tax-mutinous urges at their school board, city council and county commissioners court meetings. They should save plenty of righteous indignation for their elected state officials and demand that rollbacks in business franchise taxes wait until the bill for maintaining a first-rate state is paid in full.
Texas can't call itself low-tax as long as its state government lets the tax burden roll downhill to property owners at the local level.
And here's another dose of reality: Texas leaders rant at the federal government while enjoying its protection. It ranks 12th among world economies partly because it doesn't have to maintain its own military. With that kind of head start, where might Canada and Australia rank?
The Dallas Morning News. Aug. 19, 2014.
The dark side of Texas' editorial miracle
Every day, Texans celebrate the fruits of light government regulation: Housing is cheaper here, the economy is healthy, and jobs are available.
The construction crane easily could be declared the state bird.
But our economic miracle has a troubling byproduct: Texas leads the nation in worker fatalities, according to a recent Dallas Morning News analysis of federal data. The special report by James Gordon reveals that over the last decade, 579 more deaths happened on the job than statistically should have occurred in a state the size of Texas. This embarrassing statistic cries out for Austin to fix the problem now.
Anywhere in the nation, a construction job is much more dangerous than a white-collar office job. In Texas, however, a construction job is 22 percent deadlier than the national average — even when the size of the state is taken into account. Overall, a worker in any occupation here is 12 percent more likely to be killed on the job than if they were doing that job in another state. Even populous states like California, Illinois and New York posted better overall safety records.
If you think this isn't your problem, think again. Injured workers end up in hospital emergency rooms for treatment on the taxpayer dime or out of work with no place to turn for the medical treatment that would allow them to return to work. Guess who picks up the costs? You do, either in public assistance or in the loss of millions of dollars in unpaid payroll taxes skirted by companies intentionally misclassifying workers.
Some companies willfully game the system, listing workers, often unauthorized immigrants, as independent contractors. This paperwork trick shifts financial and other burdens from the companies to workers and, ultimately, to taxpayers. Workers become responsible for their own safety equipment and training, while firms can skirt paying minimum hourly wages, overtime, certain taxes, benefits and even compensation for on-the-job injuries. There's a macabre joke among construction workers that if they slip from a roof, they'll be out of a job before they hit the pavement.
A state law passed last session allows companies to be fined $200 for each misclassified worker at publicly funded worksites. Only one fine has been issued under the law. Separately, an interim legislative committee is reviewing the problem of improperly classified workers. Experts estimate 41 percent of companies probably improperly classify workers. Outrageous. Companies that play by the rules — and taxpayers — should be incensed.
Also, Texas is the only state that doesn't require private companies to carry workers' compensation insurance or the equivalent. Making workers' compensation coverage mandatory, especially for hazardous industries such as construction, merits serious discussion.
Texas' economic miracle is to be admired and enjoyed, but not on the backs of injured workers.
Fort Worth Star-Telegram. Aug. 25, 2014.
Accountability, like math, is complicated
Some of the pressure to understand math has been lifted from Texas public school fifth- and eighth-graders this year.
They'll still be accountable to instructors for passing classroom tests, but they don't have to worry about passing State of Texas Assessment of Academic Readiness math tests.