Trying to stiffen the Bullock Income Tax Ban

 

It’s sort of hard to believe the Texas Legislature is putting a constitutional amendment proposal on the ballot to forbid an income tax. 

The constitution, since 1993, already forbids an income tax – unless it is approved by a majority of Texas voters in a referendum. So why is this additional prohibition needed?

In its defense, the newly proposed constitutional amendment raises the bar still higher against an income tax. 

Here’s how the current constitutional prohibition came about:

In March of 1991, two months into a new legislative session, newly elected Democratic Lt. Gov. Bob Bullock was at a gathering of newspaper editors and publishers at the governor’s mansion.

They were guests of the mansion’s newest inhabitant, Democratic Gov. Ann Richards, who like Bullock had been elected in 1990. 

Bullock, the former state comptroller – tax collector -- for 16 years before being elected lieutenant governor, blurted to the group that Texas really needed an income tax.

This wasn’t exactly music to Gov. Richards’ ears. While an income tax had not been actively opposed by Richards during her campaign, she answered questions about it by saying she didn’t think one was necessary.

But Bullock raising the subject at all gave Richards yet another thing to deal with in what already promised to be a difficult first legislative session for the new governor.

As might be expected, the income tax idea wasn’t greeted with much enthusiasm. In a state that had long considered such a prospect ridiculous, any support quickly fizzled.

They stumbled through that session, scrambling for funds to get through a recession. One revenue producer that was done was to raise the gasoline tax from 15 cents a gallon to 20. Three-fourths of the tax goes to transportation, the rest to public education – both of which needed the money.

But the growing Republican Party was ramping up to run against Bullock in 1994, including plans to attack him on the income tax, and to advocate a constitutional amendment to outlaw it.

So in the 1993 legislative session, Bullock – with the advice and counsel of his new chief of staff, former State Rep. Bruce Gibson – came up with an idea.

Why not steal the income tax issue from the Republicans, by proposing our own constitutional amendment against one? 

But, rather than just write into the constitution a flat prohibition against an income tax, how about requiring instead that voters would first have to approve it in a statewide referendum?

That would give Bullock protection in his 1994 re-election effort to the charge that he had favored an income tax. How could you attack him for that when he had pushed a constitutional amendment to put a large hurdle in its path?

Bullock pushed the referendum idea in the 1993 legislative session, including that if it were passed, its proceeds would go to support education and property tax relief. 

And sure enough, the Legislature bought it, and put it on the ballot. In the November election, it passed 775,822 to 343,638 – more than a 2-1 ratio.

And Bullock was handily re-elected, even while Richards lost to Republican George W. Bush.

But the genius of the idea was that after Bullock’s amendment passed, it meant it would be less difficult to pass an income tax than it would if it were just a straight constitutional ban, without the referendum.

The way the constitutional provision is written, to put a proposed income tax before the people would require just a majority vote from both the House and Senate.

Without that referendum, to get an income tax approved if a strict prohibition had been written into the constitution would take a two-thirds vote in both the House and Senate, rather than a simple majority, to propose the amendment to the public. 

In tax-shy Texas, hat’s a big difference.

But, that’s what the House and Senate have proposed to institute. And if Texas voters want to make it even more difficult to leave at least some chance for another revenue source if they need it, they can vote against the amendment on Nov. 5.

One Additional Worry. . . . Some legislators warned there is vagueness in the constitutional amendment proposal, over the definition of the word “individual.”

They say the use of that term can be expanded to include businesses – which could endanger the collection of the $8 billion from the franchise tax that currently goes to education.

They recommended using the term “natural persons,” which is used throughout the constitution’s section on taxation, instead of “individual,” which might be subject to legal challenges over taxing businesses.

But the authors turned them down, saying it was too late in the legislative session to get such changes made in both the Senate and House.

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