Texas Public Policy: Budget, Taxes, Corrections, and Education Overview

hello everybody in this lecture we're going to discuss public policy in the state of Texas so after reading chapter

12 and watching this lecture you should be able to describe the budgetary process in taxes identify major sources

of state revenue and explain the major aspects of both correction policy and education policy in Texas in theory the

state of Texas has a dual budget system which means that both the legislature and the governor can draft and proposed

state budget however in practice in state of Texas it is the state legislature that handles most of the

budgetary process so during the first phase of the budgetary process which means before the budget gets to the desk

of the governor the Legislative Budget board and the controller of public accounts are the two major actors during

this process the Legislative Budget board is a joint committee of the Texas Legislature that consists of 10 members

the chair of the LBP is the lieutenant governor and the vice-chair is the Speaker of the House and then the board

includes the chair of the House Ways and Means Committee and the house and the chair of the House Appropriations

Committee and a chair of the Texas Senate state affairs committee and a chair the Texas Senate Finance Committee

and then the lieutenant governor gets to pick two more members from the Senate and the Speaker gets also to pick two

more members of the House to complete the ten member membership of the LB V now the main job of the LB B is to

handle the request or gather the request for the budget from different state agencies

once these requests are gathered and hearings are organized to you know get these numbers of the different state

agencies to justify their request the lbb will draft a budget which is a bill and then that bill gets introduced in

the house and more specifically it gets submitted to the appropriation committee in the Texas House once the

appropriation committee goes through the necessary step it's like any bill then the bill will get to the House floor and

then you know if it passes its gonna go to the Senate gets introduced in the Senate Finance Committee and goes

through the process and then if boats you know if it passes the Senate the bill now the budget the final version

gets reconciled by a conference committee okay now before its final passage the controller of public account

has to certify the budget so the controller's job while the LBV is drafting the budget is to come up with

the biennial revenue estimates okay because remember in the state of Texas we do have a biennial budget the budget

that is drafted and introduced and ultimately passed it's a budget for a two-year you know it's a two-year budget

it's a biennial right so the constitution of Texas gives the controller of public account you know

tremendous power during the budgetary process so he or she gets to estimate the biennial revenues of the state's

okay and the only way the Texas Legislature can overcome the estimates of the controller of public account is

by four-fifths of the vote by both chambers so if the controller public account certifies the budget which means

that if he decides if he or she decides that the budget is within the revenues that the office of the controllers

expecting the state to have in the next two years then the final stage is the budget goes to the governor and the

governor can either you know sign the budget if he or she does dad the budget becomes official it becomes law and he

or she may actually go ahead and exercise a veto more specifically he has the option of using the line-item veto

over specific provisions of the budget so this is briefly how the budgetary process works in the state of Texas now

the state of Texas has several sources of revenue mainly the two major sources of revenue in the state of Texas are

state taxes and federal funds however the state also does collect revenues from interest investments from public

lands and other non tax sources so as far as the taxes in the state of Texas we do have a general sales tax okay in

the state that's the sales tax you pay when you go for example grocery shopping okay so in the state of Texas it's a six

point two five percent that's the portion of the state tax general sales taxes these are broadly based you know

taxes collected on the retail price of most items okay not all items but most of them okay state of Texas all in the

state of Texas also does collect selective sales taxes okay these are also known as excise

taxes back in the day they used to be known as sins taxes okay these are taxes levied on the sale manufacture or use of

specific items such as cigarettes or liquor okay also includes gasoline most of these selective sales taxes are

hidden taxes because the taxes are already included in the items purchase price another kind of taxes that are

collected in the state are gross receipts taxes and severance taxes gross receipts taxes they are also known

as the franchise tax and our taxes are the gross revenues of certain enterprises not all businesses but

certain types of businesses severance taxes on the other hand these are taxes on the production of raw materials such

as natural gas and oil now most of the taxes levied in the state of Texas are regressive okay such as the sales tax

you know use taxes regressive taxes these are taxes that impose a greater burden on people who make less money

okay so regressive tax is pretty much the textbook definition if you will of a regressive tax this is a tax that pretty

much would happen you know as your income goes up your effective tax rate goes down not your effective attack not

your tax rate but your effective tax rate goes okay so low income citizens they pay a larger percentage of their

total income tax I mean a larger percentage of their total income in taxes than do high income citizens okay

so this is the major characteristic of a regressive tax as your income goes up your effective tax rate progresses your

effective tax rate goes down okay so the more burden on low-income citizens okay I think about sales taxes think about

property taxes in the state of Texas most of these are examples of regressive taxes so the state of Texas relies

heavily on regressive taxes as you can note the state of Texas is only one of very few states without an income tax so

we don't have an income tax in the state of Texas income taxes they can actually be structured it's easy to structure

them formatives okay on progressive tax aggressive tax that's the opposite of a

regressive tax in a progressive tax system as your income goes up your effective tax rate also goes up as your

income goes up your effective tax rate progresses it's the name progressive taxes so the wealthy people will pay

their proportion if the progressive tax system is the one that is used now we said other state revenues the second

largest source of state revenue in taxes is the federal government in the form of matching funds and these are federal

monies monies that we get from Washington given to us to match the state's funding on a joint program so

most of these federal funds that we get you know web news from the federal government they come into state a they

come to the state of Texas in the form of matching funds care dollars that the federal government provides the state to

match our funding on some joint program between the United States and the state like for example Medicaid state of Texas

also collects revenue on licenses and fines and interest investment land income so we a state of Texas owns

public lands that leases out and collects income on that revenues from that and we have other non taxes revenue

such as at Texas Lottery okay so in the next two slides we'll talk briefly about April of areas a couple of public policy

areas discuss the history of them in the major landmark cases that characterize these two public policy area starting

with crimes and corrections policy in the state of Texas so the state of Texas did have a prison system pretty much

built very shortly after he joined the union now in the first pretty much 4050 years talking here Beach

you know 1870s all the way to the first decade of the 20th century the state of Texas entered into a number

of leasing arrangements okay they leased out their their prisons to private contractors and you know railroads for

example and gave them you know control over the lives of prisoners in the state of Texas however by you know 1910 these

leasing arrangements were abandoned because obviously of abuse and scandals however these abuses continued under

state supervision and in the pretty much 1980 the federal court okay in you know the United States federal court declared

in a case Louise versus Estelle that the Texas prison system was unconstitutional because of so many issues like

overcrowding poor medical care for security for prisoners in the harsh discipline violated you know harsh

discipline that violated the right of the inmates and as a consequence the full court appointed a special master

okay versus a court-appointed officer and the job of this special master was to

oversee supervise if you will the system and try to eliminate the constitutional problem were identified so however the

federal supervision ended in 2002 as far as education is concerned the state of Texas had had a public education system

at least nominally if you will since its first constitution in the 19th and early 20th centuries so the school they were

pretty much very you know short on supplies short on facilities and teachers and textbook however in 1949

the state legislature passed a set of laws that pretty much try to address the shortages okay and these laws they were

all together up the Gilmer acre laws and among the things that the set of laws did they raised the teacher salaries for

example they set a minimum school year they created the State Board of Education and the Texas Education Agency

okay the State Board of Education which is still in operation today this is a 15-member board fifteen members are

elected from single-member districts around the states it is the policy-making body for the tests for the

k-12 education in Texas and the Texas Education Agency that the administration that in charge of executing the policy

recommendations of the State Board of Education now in the state of Texas we had to land places that helped shape

Texas education policy especially when it comes to funding equity okay so in the first case was Rodriguez versus San

Antonio ISD in this case it was about the constitutionality of using the property tax to fund the public system

equitably in the state of Texas okay so pretty much the plaintiffs here Rodriguez they raised the issue like how

constitutional is or is you know is funding the public school system in the in the state of Texas you know by

property tax is that equivocal is that constitutional okay so the lawyers for the plaintiff they argued that the

system of funding schools through the use of local property taxes violated the Fourteenth Amendment of the United

States more specifically they claimed that it violated the Equal Protection of the 14th amendment and they argued

that the school district was incapable of raising sufficient funds per student because you know some school districts

they the value no the value of property in some school district was too loud okay to raise any meaningful funds

however in this case right here the Supreme Court of the United States ruled that the states including taxes were not

required to subsidize for school districts okay therefore the question now has to go has to be addressed you

know through Texas Constitution instead of through the federal or through the US Constitution and the federal courts

now the question has to be addressed through the Texas Constitution and the state courts which brings us to the

second case which is Edgewood ISD vs. Kirby so in this case here a jubilee of plaintiffs here they claim or they

argued that article 7 more specifically section 1 of article 7 of the Texas Constitution mandated an efficient

system a free public schools ok so they sued pretty much the state of Texas it was you know the Mexican American Legal

Defense Fund it was the one that sponsored this lawsuit and they sued kerbals at the time the state education

commissioner okay on behalf of Edgewood so they sued Kirby on behalf of Edgewood ISD and the argument is state reliance

on property taxes to fund public education discriminated against poor children okay

because it denies them equal education opportunities now after long years of litigation it took you know about five

years for this case to be ruled to be settled in 1989 the Texas Supreme Court okay held that the public school

financing system violated the Texas Constitution okay so however the court did not demand

absolute equality in per student spending but it did require substantially equal access to similar

revenues per student at similar levels of tax effort okay so just to recap for these two cases the Rodriguez case what

we get be San Antonio this case was adjudicated at the federal level okay using the Equal Protection Clause of the

Fourteenth Amendment of the US Constitution so the federal courts in Rodriguez case said that the u.s.

tuition pretty much did not require States to provide equitable public school systems okay which brings us to

Edgewood Edgewood on the other hand was adjudicated in the state of Texas in the state courts use in the state

constitution the Texas Constitution more specifically article 7 second and in this case here Edgewood the Texas

Supreme Court ruled that the use in property taxes to fund you know you know that they ruled that the financing

system of public schools in the state of Texas was unconstitutional because it violated specifically the Texas

Constitution so make sure again you read chapter 12 and complete the assignments