TSTA opposes Proposition 4 because it is anti-education, is unnecessary and, if adopted, will remove a constitutional source of future dedicated funding for public schools. The ballot caption is misleading. Here it is: “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.”
In truth, the state constitution already has a provision, the so-called “Bullock amendment” adopted in 1993, to prohibit the Legislature from imposing a personal income tax without voter approval. That provision already protects taxpayers, and it also includes a requirement of major importance to public schools. If Texas voters ever were to become convinced that an income tax were necessary, the Bullock amendment provides that at least two-thirds of net revenue collected from the tax would be dedicated to reducing school property tax rates and the remainder to education funding. If Proposition 4 passes, it will wipe out the dedication to education and property tax relief.
Under Proposition 4, any future attempt to create an income tax would require a new constitutional amendment that would first have to be approved by two-thirds of the Texas House and state Senate, and legislators would not have to use the money on education. They could designate the revenue for any purpose, including tax breaks for wealthy corporations.
There also is another problem with Proposition 4. It doesn’t define the word “individual” and doesn’t specify that the income tax prohibition refers exclusively to natural persons. That means it could be interpreted by the courts to mean that businesses can be legally considered “individuals” and exempt from state taxation. If that were to happen, it could cost education and other critical public programs untold billions of dollars in lost revenue. Click here for more information on the short-sightedness of Proposition 4.
Meanwhile, TSTA urges you to vote for Proposition 7, “The constitutional amendment allowing increased distributions to the Available School Fund.”
The Permanent School Fund (PSF) is an endowment trust of investment returns and proceeds from state land and mineral rights dedicated to the support of public schools. The PSF, valued at $44 billion at the end of fiscal 2018, is an important source of funding for the Available School Fund (ASF), which provides funding to school districts for such things as instructional materials and classroom technology.
At present, the state constitution permits the General Land Office to distribute to the ASF as much as $300 million each year in revenue derived during that year from state-owned land or properties. If voters approve Proposition 7, the amount of revenue the General Land Office would be authorized to distribute directly to the ASF would double from $300 million to $600 million a year.
Beginning with the next session in 2021, the Texas Legislature is going to need additional funding for public education, and Proposition 7 offers another option for increasing revenue for public schools. The General Land Office would not be required to distribute the full amount to the Available School Fund, if such action wasn’t advisable under existing economic conditions.