While Texans are celebrating the Lone Star State's Independence Day, lawmakers in Austin are busy pushing legislation to zap a little more purchasing power from Texas families, as if the economic downturn hadn't already done enough.
HB 9 & SB 855, introduced by Rep. Vicki Truitt (R-Keller) and Sen. John Carona (R-Dallas) would, if passed, allow local officials to put both tax and fee increases on the ballot in the state's most populous counties.
Americans for Tax Reform opposes this legislation on principle. The fact that lawmakers want to take more hard earned income from taxpayers at a time when families across the state are cutting back in the midst of the current ecomomic downturn displays a problematic disconnect with reality.
Furthermore, a vote for this legislation is a violation of the Taxpayer Protection Pledge, which has been signed by 4 members of the Texas Senate and 29 House members.
Not only could this legislation result in a 24 percent gas tax increase, that tax hike would be indexed for inflation, effectively putting future tax increases on autopilot. Local options taxes such as this provide no option to taxpayers whatsoever. Putting both a tax hike and a tax cut on the ballot - now there is a real choice.
Revenue derived from the proposed tax increase would be directed toward transit projects, mostly rail. Commuter rail has produced dubious results in terms of ridership and cost effectiveness. Commuter rail costs $12-$20 million per square mile. Adding additional lanes on to an existing freeway costs $4-$6 million. Light rail comes in at a whopping $50-$60 million per square mile, again with subpar ridership. You do the math. Additionally, rail system construction is very energy intensive and studies have shown the environmental impact to be neutral.
It is important to find alternatives that don't take Texas taxpayers to the cleaners. Viable and pro-growth alternatives include the following:
1) End the gas tax diversion to education and other ventures not related to education. Revenue derived from this tax should go toward transportation. Furthermore, the current gas tax rate generates sufficient revenue.
2) Implement a competitive bidding process for transportation projects. Nearly 90% of engineering contracts for roads are implemented without any competition or second opinion. When this happens, it is the taxpayers who suffer.
Texans already spend 186 days out of the year just to pay for the cost of their government. ATR urges lawmakers to not pile on with further tax hikes, especially during economic contraction.