Proposition 1: Good Or Bad Idea?

Proposition 1: Good or bad idea?

On November 3 of this year, Texans will have the opportunity to vote on several proposed amendments to the Texas constitution. The first of these, Proposition 1, proposes to increase the homestead exemption available to property owners from $15,000 to 25,000. Supporters of the measure claim the amendment would provide much needed tax relief for Texans across the state, among other benefits. On the other hand, opponents of the measure argue that this proposed amendment would alienate Texans who don't own property, in addition to other complaints. Is this amendment a good or bad idea? This essay will attempt to shed some light on the matter by analyzing the arguments for an against the amendment. I'll also argue

why I believe the amendment is a bad idea, and make a guess as to whether this amendment will pass this coming election.
Proposition 1 was authored by Senator Jane Nelson and proposed under Senate Joint Resolution 1.

According to a summary by the Texas Legislative Council, the amendment would increase “the portion of the market value of a residence homestead that is exempt from ad valorem taxation for public school purposes from $15,000 to $25,000.” (8) An analysis by the Dallas Morning News observed the amendment as translating to a $120-130 a year relief for the average Texan. (Garrett) Additionally, the proposed amendment also increases the exemption amount for elderly or disabled persons. Finally, the amendment would also allow the Texas legislature to prohibit the reduction or elimination of a tax exemption imposed by the governing body of a political subdivision. (House Research Organization 5) A hearing on the measure was held by the Texas House Ways and Means Committee on May 12, 2015. (Proposition 1 Hearing) Based on the hearing, I believe the North Texas Tea Party and the Texas State Secretary Office (among others) are for the measure. Some opponents of the measure included the Center for Public Policy Priorities, the Texas Taxpayer Research Organization, and the Texas Association of Business. What arguments for an against the amendment do these contenders

have?
Supporters for the amendment argue that the measure would provide a much needed tax break for Texas homeowners. The economic impact would be beneficial as Texans would keep more money in their pocket at the end of the year. Advocates for the amendment also point out that Texans with fixed income would be able to keep their homes. This is in contrast to the alternative which would involve Texans being priced out of their homes due to rising property taxes. Against the amendment are those who argue that a tax cut would be much more effective if it were done on the sales tax. Such a tax cut would be more equitable since relief would be provided for all Texans – not just homeowners. As a result, opponents claim that the tax cut would not provide noticeable relief for the average Texan. Moreover, the measured is argued to be unsustainable in the long-term due to the mechanisms for paying for such a proposal. Despite the arguments for the amendment, I believe the measure is a poor idea as far as tax relief is concerned.
Perhaps the strongest argument against the homestead exemption increase arises from the fact that the intended targets are Texas homeowners.

Texas renters aren't specifically targeted by the measure so any supposed benefits to them are intangible and hard to quantify. The measure also proposes to reimburse schools for loss of funding by using surplus funds and tax money from oil and gas sales. It's questionable whether this method of reimbursement is sustainable over the long-term considering the proposed tax cuts from Proposition 1 would be permanent. Because of this, I don't think the measure is a good idea. Any efforts to provide tax relief for Texans should instead be focused on the sales tax. In the end, Proposition 1 doesn't provide tax relief for all Texans in a fair

manner.
Texans will have the opportunity to vote on this possible amendment this coming November. Proposition 1 would increase the homestead exemption from $15,000 to $25,000 for homeowners. The arguments supporting the proposition claim it will provide a much needed tax cut for Texans. However, the people against it argue that the tax relief efforts are better focused on the sales tax. Ultimately, I have to agree with the detractors in their view that Proposition 1 does not account for all Texans. Despite this, I'm inclined to believe that Texans will decide to pass the amendment.