Republican State Senator Paul Bettencourt said he believes Texas’ $27 billion surplus should be given back to the people through property tax relief — something Governor Greg Abbott has pledged to do.
State Comptroller Glenn Hegar announced in July that Texas will have an extra $27 billion of taxpayer funds in the 2023 legislative session due to higher-than-expected tax collections.
“If you have excess cash, you go through a formula, and they give about half of it back to the public,” Bettencourt explained recently on the news program Texas: The Issue Is.
“The key thing will be giving it out over time so that there’s not a big downtick and then a huge updraft afterward,” he said. “You have to make sure that your nest egg lasts long enough to give people long-lasting property tax relief.”
The value of many people’s homes has been rapidly rising in recent years based on comparative home sales in their neighborhoods. Residents consequently pay more property taxes, but Bettencourt said there is a way to reform this system.
“As values go up, tax rates need to come down. That’s the whole purpose, to balance the equation,” he said, adding that Texas has more than enough money and resources to address this problem.
“Texas really is getting 13% more sales tax money per year, which is why we have the $27 billion to be able to hand back out for tax relief,” Bettencourt said. “It really is the job mecca capital of the country. Everybody is coming here.”
The problem, he continued, is it “puts tremendous pressure on the real estate market because values really are up.” His response, Bettencourt said, is to always “be looking to control the cost of government because that drives everything.”
“If we hadn’t passed all this property tax relief legislation, we’d have government coffers exploding, and we would not have any way to stop that expense,” Bettencourt continued. “Because once government spends more money, it wants to spend another 10% every year, and then soon, that’s what drives people out of their homes.”
Governor Abbott pledged in September to reduce property taxes using the taxpayers’ $27 billion surplus.
“Texas is sitting on a record budget surplus of $27 billion,” he said. “Because this is your money, I want to return at least half of that money to you with the largest property tax cut ever in the history of Texas.”
While Abbott, Bettencourt, and House Speaker Dade Phelan have said they plan to use the surplus on property tax reduction, other state politicians believe the funds should be spent on infrastructure.
Last month, State Representative Donna Howard (D) argued against “knee-jerk” tax cuts and asked, “What is going to give us the long-term benefit we need?”
In Howard’s view, those long-term benefits would be gained by spending the surplus on “investments” in broadband, water supply structures, transmission lines, and clearing the state’s $6.3 billion debt to energy companies incurred during the 2021 winter freeze.