By David Janda –
In the last presidential election, Texas gained recognition for bucking the national trend of dismal economic growth through a successful formula of limited government, limited regulation, and a balanced state budget. One would think the voters of Texas could easily rest on their laurels given what voters in other states have to face in terms of the policies of their state governments, but last Tuesday, at the Clear Lake Area Republican meeting, Debra Medina, former gubernatorial candidate and chairperson of We Texans, went at the very heart of what is oftentimes a disagreement among Republicans themselves: “what is limited government?”
Medina opened the discussion by quoting Micah 6:8 : “He has showed you, O man, what is good. And what does the Lord require of you? To act justly and to love mercy and to walk humbly with your God.” Medina turned the question to the audience: what do [we] require from our government?”
Proposing to answer that question, Medina borrows a line from State Representative David Simpson: “that the legitimate role of civil government [is] to do justice and to protect individual rights of life, liberty and property. This consists of enforcing the rules between individuals (contracts), punishing the wrongdoer who harms his neighbor here at home, and defending us from our enemies abroad.” According to Medina, a good policy is one that sets us, the people, free. The freer the society, the more prosperous we become. A nation does not become rich solely through natural resources. If so, the countries of Africa would be more prosperous today than they are now and Japan, a country of limited natural resources, would be a much poorer nation. It is the people that make a nation rich.
The trap many leaders and voters find themselves is the difference between good ideas and good policy. An example Medina used at Tuesday’s meeting was that of disciplining unruly children. It is a good idea to discipline unruly children, but it is the parent’s job, not the schools’, to take on that responsibility. Good ideas at times lead to bad policy. Bad policy leads to the absence of freedom, in essence servitude.
How does the U.S. and Texas, the land of limited government, fare when it comes to a free and prosperous society? Medina cites a study that ranks 185 countries according to their “index of economic freedom.” Based on a scale of 100, Hong Kong came in first at 89.3 and the U.S., having fallen in the rankings in recent years, came in at #10, with a score of a 76.” Medina commented that she would have “received a whipping if [she] brought home a 76 on [her] report card.”
Texas, the perceived bastion of limited government, has not fared well either. According to Medina, an overabundant reliance on property taxes in the state has in effect stripped away in some respects the very nature of property ownership and has led to a form of tenancy. The state’s reliance on property taxes has not been fair either. Medina cites a report that over half of appraisal districts could not reproduce the property values of those properties they were assessing. Also, a tax policy that favors property taxes discriminates against the economically disadvantaged. Those with less means are less likely to spend the time protesting the valuation on their property and less likely to spend the money to hire an agent to do it for them.
Although Texas is constitutionally required to have a balanced budget at the state level, it carries the largest local debt in the country via its cities, school districts, and other local political entities. The population growth over the last biennium was 5 percent. The latest Texas budget has expenditures increasing by 7 percent.
To be economically free and to truly limit government, Medina believes the tax system in Texas needs to be revised. A tax should be fair, transparent and least disturbing to the free market. Debra Medina touted a bill sponsored by George Lavender that would abolish the property tax for homes and businesses and replace it with a “7% credit model value added tax.” Essentially, this is a tax on productivity, since it would tax items that are produced in the state.
Although some discussion arose among audience members concerning whether this was another form of sales tax and whether the public would tolerate tax dollars generated locally be used elsewhere in the state, the audience left the meeting more aware that the successes of the 2010 election have not led to tangible reforms in the way our state government operates and taxes its citizens. If Debra Medina’s message Tuesday night is any indication, one must not be self-complacent in believing we have a limited government in the state, when in fact the amount of expenditures in the state budget grows faster than the rate of population growth and faster than the rate of inflation.