Legislative Body For World’s Ninth Largest Economy Enters Crucial Period

Lobbying and legislative horse-trading is intensifying and will continue to escalate in the coming weeks, not in Washington but in Austin, where the 88th regular session of the Texas Legislature is approaching its May 29 adjournment date. Though the time remaining in session is growing scarce, there is still much legislative business to tend to. The good news for those who live and do business in Texas is that the pending opportunities for pro-growth tax, regulatory, and education reform are more numerous than the legislative threats that are still alive.

While legislative leadership in the Texas House and Senate have proposed different approaches to it, there is consensus that property tax relief is the top tax priority. It’s not hard to see why. Though Texas is one of seven states with no income tax and is home to the nation’s sixth lowest overall state and local tax burden, Texas is also home to the nation’s sixth highest average property tax burden.

As Lt. Governor Dan Patrick (R) explained in a column recently published in the Dallas Morning News, the property tax relief that he and his colleagues are seeking to enact this year could build upon the taxpayer safeguards implemented in the previous session, which have already saved Texans billions.

“The landmark legislation passed in 2019 limited local (county and city) governments from increasing their revenues by more than 3.5% and school districts by more than 2.5%,” Lt. Governor Patrick noted. “As appraisal values go up in the spring, local taxing entities must lower the tax rate to get to the 3.5% and 2.5% limits on budget growth. Limiting local government budget growth is the best way to lower property taxes.”

While many are hopeful that the two chambers will work out a deal on property tax relief, there are a number of other reforms awaiting consideration in the Texas Legislature that are of national significance. Led by Lt. Governor Dan Patrick (R), the Texas Senate has passed a number of landmark reforms that are now awaiting consideration in the House. On April 6, for example, the Texas Senate passed Senate Bill 8, legislation that will create an education savings account (ESA) program in Texas, which would be the state’s first private school choice program.

“Parents are the single most important factor to the success of their child in education, followed by a teacher,” Lt. Governor Patrick said after Senate passage of SB 8.

“Republicans, Independents, and Democrats all support school choice because Texans agree families must have choice in education so every child has the best chance of success.”

In addition to school choice-expanding reform, which would make Texas the latest state to provide parents and children with ESAs, the Texas Senate has also passed Senate Bill 175, which would install the nation’s first prohibition on taxpayer-funded lobbying. This is the second session in a row that Lt. Governor Patrick has passed this reform out of his chamber. Proponents of SB 175 are hopeful that the Texas House will not stymie this reform, as was the result in 2021.

“Taxpayers don’t need an Austin lobbyist middleman,” Senator Middleton, sponsor of SB 175, said during the March 13 committee hearing on the bill. “We should not give certain elected officials special treatment to use taxpayer funds to have an advantage over the voices of local voters at their state capitol.”

Expanding Access To Health Care

In addition to reducing tax and regulatory costs, Texas lawmakers are also poised to enact a reform that would expand access to health care across the Lone Star State. One such proposal, Senate Senate Bill 1978 and House Bill 3039, would add Texas to a multi-state compact allowing dentists and dental hygienists who have moved from another compact member state to get to work more quickly in Texas.

Access to oral health care is already lacking in too many parts of the state, particularly in rural Texas. In fact, the supply of dentists and dental hygienists in Texas has fallen short of demand every year since 2018 and this shortfall is projected to continue for the remainder of this decade. Proponents of SB 1978/HB 3039 note that its enactment would help remedy the state’s currently insufficient supply of oral health professionals.

The need to increase the supply of health care providers is more imperative in Texas than in most states. That’s because Texas continues to rank among the fastest growing states. In 2022, Texas had the fourth fastest population growth rate and had the largest nominal population increase in entire U.S. Strong population growth boosts state coffers, but without a commensurate increase in the supply of oral health care providers, the pre-existing shortage of care providers in Texas will go unaddressed and could be exacerbated.

“This compact will create reciprocity among participant states, and reduce the barriers to license portability,” notes the Council of State Governments, who is working to increase the number of states participating in the compact through a coalition that includes the Department of Defense, the American Dental Association, and the American Dental Hygienists’ Association. This coalition is advocating for increased compact membership as a way to “support the mobility of licensed dentists and dental hygienists.”

Research suggests that maintaining good oral health isn’t just about preventing cavities or bad breath. It’s also associated with improved overall health.

“Taking care of your oral health is an investment in your overall health,” notes the Mayo Clinic website, which adds that “without proper oral hygiene, bacteria can reach levels that might lead to oral infections, such as tooth decay and gum disease.”

By passing HB 3039 with a vote of 143-1, the Texas House demonstrated this week that there is overwhelming and bipartisan support for joining the compact for oral health professionals. SB 1978, the Senate version of dental compact bill that’s now awaiting a vote in the Senate Committee on Health and Human Services, is one House-passed bill that many would like to see the Senate vote on in the coming days. Another is House Bill 2127, legislation passed out of the House in April that aims to rein in local regulatory costs.

By prohibiting localities from imposing onerous and costly regulations, proponents of HB 2127, introduced by Representative Dustin Burrows (R), note that it would ensure Texas remains an attractive place to live, work, do business, and invest. Burrows’ proposal, which passed out of the House in April and awaits Senate consideration, bars local governments from regulating goods, services, activities, or industries in a manner that conflicts with or exceeds state law.

“There are dozens of reasons why Texas is the best state in the country for business, but its convoluted, unpredictable, and inconsistent patchwork regulatory system is not one of them,” said James Quintero, policy director at the Texas Public Policy Foundation. Quintero says HB 2127 “brings some much-needed common sense to the system, unifying the rules for conducting business in a predictable, reliable, and efficient way to promote compliance.”

In addition to legislation aimed at reducing tax and regulatory burdens, Texas lawmakers are also considering a reform that would increase convenience for Texans by repealing a restriction that forces many Texans to make two trips to the store when, in most states, one would’ve been sufficient. That reform, House Bill 2200, which was filed by Texas Representative Justin Holland (R) in February, would repeal the state restriction on market access for spirits-based seltzers and canned cocktails, often referred to as ready-to-drink (RTD) beverages.

Passage of HB 2200 would allow High Noon and other low alcohol spirits-based RTD beverages to be sold in grocery stores and convenience stores alongside White Claw and Bud light seltzer, which have a higher alcohol content than High Noon and other RTD beverages that are not allowed in Texas grocery or convenience stores. 31 states currently permit grocery store sales of spirits-based RTD products and 29 states permit their sale in convenience stores. In states like Texas, however, a person can pick up Bud Light seltzer (5% ABV) while getting groceries. But if that person also wants to purchase a pack of High Noon (4.5% ABV), they have to drive to a liquor store to obtain it.

“In Texas, beer and wine-based RTDs can be sold in more than 30,000 locations, including grocery and convenience stores,” said Representative Holland. “Meanwhile, spirits RTDs with the same or lower amounts of alcohol can only be sold in 3,200 locations. My bill closes this loophole, providing economic opportunity to tens of thousands of Texas businesses.”

Senator Kelly Hancock (R), sponsor of SB 1288, the Senate companion to HB 2200, said this proposal “has been my most popular bill that people have called me on.” Senator Hancock added that it’s “a pretty commonsense bill,” one that will result in increased competition of the sort that will benefit consumers with greater convenience and lower prices.

As commonsense as this reform sounds to Senator Hancock and many others, influential stakeholders are working hard to stop it.

“Beer distributors don’t like it. Neither do the package stores,” Representative Holland told the Fort Worth Report. “We’ve had some opposition from these groups, because they’re doing their job, I guess, to try to protect their industry. But I’m not in this business to try to protect the package store or beer distributor industry. I care more about the small businesses in Texas that will benefit from this than I am protecting somebody’s structure of their industry.”

HB 2200 and SB 1288 are currently pending in committee. If Texas lawmakers don’t pass this market access fix this year, they likely won’t have another opportunity to do so again until the next regular session in 2025.

Efforts to work out a deal between the House and Senate on property tax relief and school choice will likely be the dominant topics of debate and garner most of the media coverage in the final days and weeks of the legislative session. But as a brief run-through of other pending legislation demonstrates, there are a host of nationally noteworthy policy changes that could come out of the Texas legislative session which concludes at the end of May, including multiple first-in-nation reforms that lawmakers in other states have already expressed interest in adopting. Since policies enacted in Texas often spread to many other states, there is good reason for non-Texans to keep an eye on what happens in Austin over the next few weeks.