10/21/2019
Proposed Constitutional Amendments with Tax Implications
And one Animal Amendment
Proposition 4 (HJR 38)
Proposition 4 would make it so that Texas can’t impose or collect an individual income tax. At this time, there is no constitutional bar on imposing or collecting such a tax.
Texas is one of only seven states that doesn’t have an individual income tax. The others are Alaska, Florida, Nevada, South Dakota, Washington and Wyoming.
LWV said arguments for this prop include that a February poll by UT and the Texas Tribune found that 71% of respondents oppose an individual state income tax and that Texas has a "low-tax, pro-growth" approach to economic expansion that is dependent on not having such a tax. One argument against the prop is that it's unnecessary because the Texas Constitution currently prohibits the legislature from imposing an income tax without a statewide referendum.
Here’s how you’ll see Prop 4 worded on your ballot: “The constitutional amendment prohibiting the imposition of an individual income tax, including a tax on an individual’s share of partnership and unincorporated association income.”
Disaster relief initiatives
Proposition 3 would temporarily exempt property owners in a governor-declared disaster area from a portion of the taxes for the property’s appraised value. But the proposition does not guarantee an exemption for property affected by a disaster after the local tax rate has been set, the House Research Organization reports.
Proposition 8 would create a Flood Infrastructure Fund in the state treasury for the Texas Water Development Board to pay for drainage, flood mitigation or flood-control projects.
The fund, created after Hurricane Harvey, is intended to better prepare Texas for future disasters. But the House Research Organization notes that there are local, state and federal funds available for these projects and that some state funding for the fund is meant to be used only after a disaster takes place.
Parks and historical commission funding
Proposition 5 seeks to secure funding for the Texas Parks and Wildlife Department and the Texas Historical Commission from state sales taxes imposed on sporting goods.
The two agencies have reaped the revenue from these taxes since 1993, but the Legislature has allocated only a portion of the full revenue in recent years. The proposition would ensure the agencies automatically receive the full revenue unless two-thirds of the Legislature votes for another resolution.
Critics say it would limit the Legislature’s ability to prioritize state funding, according to the House Research Organization.
Public education funding
Proposition 7 would double the annual public education funding awarded to the Available School Fund. The General Land Office can currently distribute $300 million to the fund per year, which gives schools funding for each student and textbooks.Proponents say this would allow schools to get more of the profits from state lands and State Board of Education investments, but critics say it could drain the fund more quickly and shortchange students in the long run.
Law enforcement animals
Proposition 10 would ensure that retiring law enforcement animals can go to their handlers or qualified caretakers. Law enforcement animals, such as dogs and horses, are considered public property, and the Texas Constitution generally prohibits the transfer of public property without payment.
The proposition would clarify confusion over the existing practice, though some law enforcement agencies already allow handlers to adopt the animals for no fee.
Proposition 3 (HJR 34)
This proposition deals with taxes in disaster areas. If passed, it would allow the Texas legislature to temporarily exempt from ad valorem taxation – or taxation based on property or transaction value – a portion of certain property located in an area covered by a disaster declaration by Gov. Greg Abbott.
Lawmakers would prescribe the method of determining the amount of exemption and how long that property would be exempted for. The amendment would also allow lawmakers to create any additional requirements for the exemption. Arguments for this prop, according to LWV, include the tax exemption would bring quicker relief to those affected in the event of an environmental disaster and that this prop would be easier and more affordable to local governments than the current property reassessment process. Alternatively, arguments against the prop include that it relies on local governments to decide whether or not to adopt the exemption and that, though there would be predetermined damage categories, property may still have to undergo an extensive reappraisal process.