Rural Texans Bare the Burden of Proposed Tax Plan EDITORIAL

AUSTIN, April 3, 2006 – Texas Governor Rick Perry, Lt. Governor, David Dewhurst and Speaker of the House, Tom Craddick appointed the members of the Texas Tax Reform Commission (TTRC) who have developed a proposed tax plan that claims to lower property taxes and solve the problem of school funding in the State of Texas. Legislators will soon meet in a Special Session called by the Governor to address this issue and this plan.

Below is a table outlining the economic impact of the proposed tax plan published on the TTRC Website.

Notice that for people with incomes of $14,042 to $33,190, this plan does NOT lower taxes, it increases them. Any offset derived from lowering property taxes is exceeded by increases in other types of sales and excise taxes called for in the proposed plan.

Liberty and Liberty County are not unlike other rural counties across the state and in Southeast Texas. The average income of a person working in the City of Liberty is about $24,000 per year, placing them squarely in the middle of the income group at issue.

In rural Texas, there are fewer industries and businesses to provide a tax base to fund the activities of government. For that reason, the property tax rates in rural Texas, like in Liberty County, are higher than in larger urban areas. In fact, some elderly people living in Houston and Pasadena with homestead and old age exceptions pay almost no property tax on their home.

Without industry in rural Texas, there are fewer employment opportunities offering good paying jobs and incomes are far lower than in large urban areas where people are afforded higher incomes and better opportunities.

If you look at the table above, you will notice that anyone with an income higher that $33,190 will receive a benefit from the proposed tax plan. In fact, the larger your income the greater the tax benefit you will receive.

This plan transfers the tax burden of schools from those living in urban areas with higher incomes and who are already taxed at a lower rate than those living in rural Texas, like Liberty County. Rural Texans already suffer from higher property tax rates and can least afford it.

This plan transfers the cost of funding education from high wage earners in urban areas to lower wage earners living in rural Texas.

This is an election year and one of the most interesting things to watch is how this plan makes it through the upcoming Special Session. If approved, what will be the response and solutions offered by our local elected officials to it.

What will they do to protect us who enjoy living in rural Texas?

By Allen Youngblood

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