Thursday, February 24, 2005

LWV Meeting on the Texas Budget

Boy, it's been a busy day, what with the SS town-hall this morning and tonight's League of Women voters meeting on the Texas Budget.

It was a good presentation, attended by about 25 people from the Dallas League, the Richardson League, and a few other community organizations. The overhead slides they used were a little out of date, but they gave us updated figures as they went along. Interestingly enough, they were from an organization called ProTex: Network for a Progressive Texas. I have no idea if this organization still exists, since their website ( is defunct.

Anyway, I won't post ALL of the figures on here since there was a LOT of detail. They began with an overview of Texas's per-capita spending compared to other states.... Taking only state spending into account, we're ranked 45th in spending on public health, 48th on parks and recreation, and 50th on government employee wages and salaries. This goes up somewhat when you add in county and local spending. Apparently Texas has historically had a low-tax, low-services mentality, and we're getting what we pay for.

What does Texas spend the money on? Well, over half of the budget goes to K-12 education and Health and Human services. Only 7% goes to public safety and crime. Those figures are from 2002-2003.

Where do we get the revenue? There's no state income tax here. At the state level, it seems to come from a wide variety of sources: 26% of the state's revenue comes from the sales tax, 10% from the car and gas tax, 10% from other taxes, 33% federal funds, 2% from the lottery, and 17% "other" – fees and so on. The cities and counties rely a LOT on the property tax, and most of that is going to the schools.

Now, in the next bit they covered WHO pays the taxes. This was a very interesting, very effective demonstration that I'd highly recommend doing at any future similar workshop you might be doing. They called on five people; each one represented 20% of the population, each one a different income bracket:
0 - $20,000
$21,000 – $36,000
$36,000 -- $54,000
$55,000 -- $84,000
$84,000 +

They gave each of the five a sign representing their income bracket and they all stood along a wall. Then, they each took steps forward. Each step representing the percentage that their income grew during the 80s and 90s.

The 0 - $20,000 person took 4 steps – her income had grown 4%.
$21,000 – $36,000 took 4 steps also. Another 4%.
$36,000 -- $54,000 took 8 steps. 8%
$55,000 -- $84,000 took 18 steps representing an income growth of 18%.
$84,000 + -- This person practically walked out of the door. Thirty three steps! An income growth of 33%.

This illustration really brought home how inequitably the gains of the go-go 90s were distributed. But, we weren't done yet! Each person turned over the sign they were carrying to show us what percentage of their income goes to taxes (state and local, including both property and sales tax).

0 - $20,000 18%
$21,000 – $36,000 10%
$36,000 -- $54,000 8%
$55,000 -- $84,000 7%
$84,000 + 5%

It was a striking illustration of exactly how regressive the Texas tax system is, due to its reliance on the sales tax. And this DESPITE the fact that groceries, medicines and so on are tax-exempt!

Then they talked about the fact that there is STILL a gap between what Texas's income and expenses, and discussed the various options that the legislators are kicking around to raise more income. One interesting one was to expand the state sales tax to include services, since the economy is becoming more service-based. Several were business based, and apparently these have a good chance of passing: a payroll tax, expanding the corporate franchise tax to include certain types of partnerships which had been left out originally, and a business activity tax. There were several other options brought up as well. We were encouraged to lobby our legislators regarding our preferred option.

Then we went into a Q&A / discussion period. The first questioner pointed out that we'd talked about all of these possible tax hikes, but that we had not talked about cutting expenditures. The presenters said that we had already had a 10% across the board expenditure cut two years ago and that all state agencies had been asked for another 5% expenditure cut this year. And there is STILL a shortfall.

One woman asked, "What kind of state do we want to live in?" This turned into a sidebar on all of the human services that had been cut over the last few years, the libraries and school programs that had been eliminated, and the lines that were occurring at state agencies for treatment of mental health patients. The room seemed to agree with her.

Then there was a VERY interesting discussion about Parkland, Dallas' county hospital which cares for the indigent. Apparently, Parkland is not only caring for Dallas county indigent but also for the indigent from SEVEN SURROUNDING COUNTIES. This is due to the fact that many of those counties, including Collin, have closed their county hospitals and/or have lowered their definition of the poverty level so far that a person has to be making $3000 / year or LESS to be considered "indigent." Furthermore, although the surrounding counties are supposed to repay Parkland the cost for caring for these folks, they usually DON'T.

Senator Royce West has sponsored a bill to force the counties to take care of this. I looked it up on his website, and I think it's SB230. I need to put something together and circulate it. It seems that every taxpayer in Dallas should be angry about this, especially since a large percentage of Dallas county taxes go to support Parkland.

We also had a discussion about the idea of a state income tax. This is Texas' third rail – nobody wants to touch it. The rationale is that Texas will appear more "business friendly" by not having a state income tax, and that Texas wants to encourage companies to relocate to Texas. However, the counterpoint to that was that Texas may be less appealing to these companies because of quality of life issues. Nobody wants to live where the air is so polluted or the schools are so bad.

By this point it became apparent that we had a very pro-tax crowd. This impression was confirmed when an audience member asked everyone who would be in favor of a state income tax to raise their hands. I would say 90% of the room did so. It was quite gratifying.

Between this meeting, and the Social Security meeting, I was encouraged. Who says this state doesn't think progressively? Now if only we can get this out to the mainstream....


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