The property tax relief battle has been fascinating to watch… in a train wreck you can’t turn away from type of way. The legislature had a great opportunity to bring relief to Texans and score a great fiscal and public sentiment win for the Republican Party. The longer, and uglier, the battle has become the more it will come to define the party for the next election cycle. What follows is a three part series on the issue. I had been meaning to post as they were written, but Kenshin has been in the hospital 12 days and counting this month leaving time a precious commodity. So the series will be posted all in one batch.
The Battle Lines
The House and Senate have plans that partially overlap, but also have a significant difference in focus for who will benefit from the plans. This is set against the backdrop of campaign promises to reduce property taxes. The short version of the difference between the plans is the House plan is a plan to “compress” (surely the messaging could be better) the amount of property taxes school districts could assess. The Senate plan has an element of compression, but would also expand the homestead exemption. Governor Abbott supports the House plan.
The battle lines are reducing taxes for everyone on all property versus a smaller universal reduction and skewing the difference towards homeowners in the Senate plan. More simply, though not totally accurately, the messaging is relief for homeowners versus business. The democrats likely will amplify the homeowner versus business theme leaving that the messaging the public remembers next cycle.
This is set against the backdrop of Governor Abbott wanting to completely eliminate property taxes over time, and Lieutenant Governor Patrick believing the complete elimination of property taxes is impossible. Senator Huffines, when he challenged Governor Abbott in the primary, also wanted to eliminate property taxes, so some work has been done regarding the feasibility of the idea. However, I’ve never seen anything showing both how this could be accomplished beyond a conceptual mechanism, and how the state will maintain necessary funding levels should the income stream used to reduce the taxation slows. To that end, until such a time as both ability and contingency aspects can be addressed Lieutenant Governor Patrick’s position is the more realistic approach.
The Regular and Special Session
What came first, the chicken or the egg? The question applies to the dysfunction that emerged in the regular session and has carried over to the special session. Governor Abbott, at least publicly, stayed out of the difference between the two plans in the regular session. When it became clear that the two chambers would not be able to reach a compromise significant dysfunction ensued. No need to rehash what has happened. Suffice it to say the party is significantly fractured and it appears the divide will continue.
Once the regular session ended, Governor Abbott immediately called a special session, and gave an exceptionally restricted call. He basically said pass the house plan, and you aren’t allowed to consider the Senate plan. Speaker Phelan had the House pass their legislation on the first day and then adjourned sine die. This was a direct challenge to Lieutenant Governor Patrick, and the Senate. By adjourning sine die the House signaled no negotiation and no compromise.
Obviously, this was not well received across the Capitol hallway, and the Senate did not pass the House bill. The House’s action seems particularly ill conceived with the Senate having the option of conducting Attorney General Paxton’s impeachment trial at a time of their choosing. They can choose to effectively delay any subsequent special session by conducting the trial and forcing the House and Governor Abbott to wait.
Meanwhile, Governor Abbott decided to apply maximum pressure to the Senate, at the expense of creating collateral damage. He engaged on a veto threat campaign (which has been at least partially carried out) that is vindictive appearing. Bills were vetoed with the specific language saying they could be reconsidered in a special session once property tax reform has passed. Additionally, Governor Abbott appears to be soliciting individuals who would benefit from the bills under veto threat to call Lieutenant Governor Paxton and apply pressure. While Governor Abbott has publically stated he wants the two chambers to work out their differences as the special session progressed this is not possible under the call of the session, and the vetoes and solicitation to apply pressure doesn’t exactly sound like wanting to facilitate a compromise.
Next, a look at the political history that brought us here and the optics of the situation.