Posted: 2/18/05
To evaluate Texas' taxes, follow the money, experts explain
By Ferrell Foster
Texas Baptist Communications
AUSTIN–Where does the state get money for all the good things Texans might want their government to do?
That question dominated many discussions during the Texas Baptist Christian Life Commission's annual conference in Austin.
State Sen. Eliot Shapleigh (D-El Paso) led participants through the maze of education funding options and concluded a state income tax is the best revenue source.
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| State Sen. Eliot Shapleigh described the criteria for a fair and equitable revenue system during the Texas Baptist Christian Life Conference. (Photo by Ferrell Foster) |
Mike Moses, retired superintendent of the Dallas Independent School District, said state funding of education has dropped from from a high of 70 percent, when the state “had a lot of oil money,” to 38 percent today.
State Sen. Jane Nelson (R-Flower Mound) attacked the proposed expansion of legalized gambling as “the path to fiscal disaster.”
Rob Kohler, head of Common Sense & Sound Public Policy, labeled video lottery terminals as “another funding gimmick” that will result in costs being passed down to county governments.
And Ron Anderson, president of Parkland Health and Hospital System in Dallas, said the state's health care safety net is in peril, because needs are rising and funds are dropping for hospitals, such as Parkland, which serve many Texans who are least able to afford care.
Despite all the state's funding challenges, only Shapleigh, talking about education funding, offered a possible solution–a state income tax.
A good revenue system does several things, Shapleigh said. It raises enough money, shares the burden fairly, enhances economic development, avoids over-reliance on any one tax or set of taxes, has minimal costs, withstands shifts in the economy and is broad-based among all taxpayers.
Texas depends primarily on two revenue sources–property and sales taxes, he said. Both are regressive, meaning poor people carry a disproportionately high share of the tax burden.
Texas has the 15th-highest property taxes in the nation and the third-highest sales taxes.
“Our tax system should be a moral tax system,” but it is not, Shapleigh stressed. Looking into the future, Texans must determine not only how to pay for schools but how to do it fairly, with residents sharing the burden in an equitable manner.
Forty-three states have created just and equitable tax systems, Shapleigh said. They use a tax structure that collects about one-third from property taxes, one-third from sales taxes and one-third from income taxes.
An income tax in Texas based on the rate used in Kansas would generate $34.6 billion in revenue, he said. That income would enable property taxes to be reduced by $23.1 billion, or 90 percent, and it would raise $11.5 billion for education.
Such a system would lower the tax burden on residents making about $42,000 or less while raising it for those making more, he reported. A person with an annual income of $41,121 would see a tax decrease of $135, while a person making $65,925 would pay an additional $524.
Focusing on education funding, Moses said, “The big question is, 'Will the old pay to educate the young?'”
About 70 percent of Texans do not have school-age children, and the fastest-growing segments of the population are older than 55 and under 18, he said.
If education funding is approached merely as user fees, with school users paying all the school bills, then “the common good is out the window,” Moses said.
Texans must see education funding as an investment in the future, he urged. “What kind of state are we trying to build here? We've done about as much as we can do here with those two funnels” of property and sales taxes.
Most distressing to Moses is people who want to reform education but not fund it. Reforms have been made, he said, declaring, “Now it's time to fund education.”
Nelson has strongly opposed the spread of legalized gambling, and she's one of the legislators facing a gambling industry onslaught. “I've never seen so many lobbyists,” she said. And what “really angers me most” is that the people pushing gambling “don't care one bit about Texas children.”
The industry is promoting legislation to legalize video lottery terminals, especially at Texas racetracks. The terminals essentially are slot machines, and their installation would bring the most prevalent form of casino gambling to Texas.
For the state to get $1.5 billion in revenue from video terminals, “Texans would have to lose $2.5 billion,” Nelson said. “Where do we think gambling revenue is going to come from? … What are families using that money for right now?”
As a small-business owner, Nelson said, the gambling revenue will come out of the pockets of other businesses in the state.
And don't forget the social cost, she added. “You will see an increase in every single measurable crime.”
Some lobbyists and legislators want to let Texans vote on whether or not to allow video lottery terminals into the state, Nelson said.
“Can you imagine the television ads that would run?” she asked. The gambling industry would “pump million of dollars into the state” to influence the vote.
“You cannot out-spend them,” she said. But in the legislature, “you can beat them with people power. … I'm a huge believer in the voice of the people if it's loud and clear.”
The gambling industry is promising a golden revenue egg to the state, but Kohler reported “a tremendous amount of money that has to be spent to get this golden egg.”
Kohler called gambling a regressive and ineffective tax that functions as a “special-interest subsidy.” It has short-term benefits with long-term consequences, and it essentially is an “unfunded mandate” for which city and county governments will have to pick up the costs.
Bottom line: “It's going to create more poor children.”
Anderson said the state's health care safety net faces several challenges–more uninsured and under-insured residents, more immigrants, rising trauma care costs, workforce shortages and funding cuts.
Parkland is part of the national safety net as a public-funded hospital that provides the most technically advanced care and must serve residents who are unable to pay for health care costs.
Twenty-five percent of Texas residents are uninsured, and the No. 2 cause of bankruptcy in the country is health care, Anderson said.
Managed care and governmental funding reductions also have had a negative impact on hospitals, he said.
Parkland served about 350,000 people last year and needs about 1,000 more beds to provide care for the poor, he said, calling the facility “undersized and overcrowded.”
The nation's patchwork system of health care is getting more and more frayed, Anderson said.
The hospital recently cut $260 million in order to keep the doors open, he said. But now, “your safety net has no place to go.”
News of religion, faith, missions, Bible study and Christian ministry among Texas Baptist churches, in the BGCT, the Southern Baptist Convention ( SBC ) and around the world.
Two couples with Texas ties were among missionaries recently appointed by the Southern Baptist International Mission Board. Trey and Denise Shaw will serve in central and eastern Europe in evangelism efforts. A Waco native and pastor of White Rock Church in Celeste, Shaw will serve as a strategy coordinator. The Shaws have three children: Bryan, 7; Alexander, 4; and Lily, 2. Mark and Olga Gilbert also will work in central and eastern Europe, where he will be a church starter. He is a Dallas native, and she was born in Latvia. They have two children: John, 2; and Michael, 1. 
Williamson Association will hold a training event detailing the life of Christ. The deadline to sign up is Feb. 24. The cost is $72. Classes will be held March 3, 10 and 24 from 6 p.m. to 9 p.m. David Edwards, pastor of Main Street Church in Georgetown, will be the instructor. 
