Monday marks the start of early voting in Texas' Nov. 4 general election. The only statewide contests this year are ballot propositions to amend the state constitution – 17 of them, to be exact.
More than half the constitutional amendments on the ballot this fall deal with taxation, while others pertain to bail practices, dementia research and the state’s water supply.
Arguably, the most significant measures would raise homestead exemptions. They determine how much of a home's property value can be taxed to pay for public schools.
Proposition 13 would lift the homestead exemption for all Texas homeowners from $100,000 to $140,000.
"Now that will save all those 5.7 million homeowners $484 per year," said Republican state Sen. Paul Bettencourt of Houston, author of the measure. "Once the voters approve of a homestead exemption for schools, it follows you, no matter where you go. That $140,000 exemption means it’s whatever your primary homestead is, and it doesn’t matter if it’s year one or year 50, that’s going to be there. So that’s a substantial lifetime benefit."
Bettencourt is also the author of Proposition 11, which would lift the additional homestead exemption for homeowners who are over age 65 or disabled from $10,000 to $60,000. In other words, if both Propositions 11 and 13 pass, those homeowners would have a homestead exemption of $200,000.
"Now you may ask, ‘Why do more for over-65 and disabled homeowners?'" Bettencourt said. "They’re generally on fixed income, and they need the most help staying in their home. And in the case of seniors, you can argue that they already paid a lifetime of taxes and probably don’t have any current students in the public education system."
The combined benefits, and burdens, of tax breaks
Taken together with amendments to reduce property taxes passed in earlier elections, maintaining these reductions will cost the state roughly $51 billion.
“A lot of those have been funded out of surplus money, and surplus money is one-time revenue," said John Diamond, director of the Center for Tax and Budget Policy at Rice University's Baker Institute for Public Policy. "It’s not recurring revenue. So, when the surplus ends, you have to find another way to finance these reductions."
If the amendments are approved, the state would make up the difference for the revenue school districts lose from property taxes, through a process called "compression." But unlike the homestead exemptions, the compressions would not be written into the constitution.
"There’s a big difference between the homestead exemptions, which are constitutionally passed and so guaranteed forever, but the compressions can be taken away just like that," Diamond said, snapping his fingers. "Those are not protected."
And that could lead to deep cuts in public education funding in lean budget years, much as Texas saw 20 years ago.
Some of the other tax measures are highly targeted. Proposition 7 would provide a full or partial homestead exemption to the surviving spouse of a veteran who died from a disease or medical condition related to their service. Proposition 17 would provide property tax relief for homeowners whose property has been affected by the installation or construction of border security infrastructure along the Mexican border.
Then there's Proposition 10, which would provide a temporary property tax exemption for people whose homes are destroyed by fire. That's another of Bettencourt's measures.
"And so we decided, fine, we’ll give them the same coverage that we do for tornadoes and hurricanes," Bettencourt said. “Because if your home’s burned down, you shouldn’t have to pay for all the whole full value."
University of Houston economist Steven Craig said all those exemptions add up.
"Our heart can go out to all kinds of people, and then the question is, ‘Is this the way to help them, or is there a better way to help them?'" Craig said. "As you whittle away against a property tax, you’re setting it up so that the property tax stops working."
Then there are a series of measures that would ban the state from collecting certain kinds of taxes altogether. Proposition 2 would ban capital gains taxes. Proposition 6 would ban taxes on securities transactions. That's ahead of Texas establishing its own stock exchange. And Proposition 8 would ban inheritance taxes.
Texas doesn't collect any of these at present, but Diamond said ruling them out limits the state's options when revenues from other sources fall.
"Sales taxes, I could definitely see those flattening out as the consumers' resilience finally fades," Diamond said, "and then federal transfers almost certainly are going to fall and could fall significantly. That is a huge chunk of the Texas budget."
Felony bail reform
At least three ballot measures that don't relate to taxation have potentially widespread ramifications for the state. Take Proposition 3, which would amend the constitution to allow judges to deny bail to people charged with certain felonies. Republican state Sen. Joan Huffman of Houston has been trying to get this passed since 2019.
"A judge would have to determine that either the person was going to be a threat in some way to the safety of the community or to law enforcement and/or a likelihood that the person would not return to court," Huffman said.
The amendment would apply only to the most serious offenses – capital murder, murder, aggravated robbery, aggravated sexual assault, aggravated assault with a deadly weapon, and continuous human trafficking.
"This doesn’t take away any of the other rights that they would have for a trial, for the state to have to prove the case beyond a reasonable doubt," Huffman said. "It’s just reserved for those that would be held pending trial. And I will say that many states have this exact same type of system, and the federal system operates this way for violent offenders."
Prop 3 would affect a relatively small number of cases in the Texas justice system, about 40,000 out of more than 800,000 arrests made in Texas every year. That's according to Nick Hudson, senior manager of policy and advocacy at the ACLU of Texas. But Hudson said he has serious concerns that the measure would worsen overcrowding in Texas jails.
"I think this is very likely to pass. Our focus has been on trying to mitigate the harm it will cause," Hudson said. “We, along with many other people and many House and Senate negotiators, worked to ensure that there was access to lawyers baked into this proposal to blunt some of the potential negative impacts. We are happy to see that provision in, but we are really concerned that this will accelerate pretrial detention."
Hudson argued that the measure could wind up violating one of the most basic rights of the accused.
"They have not been convicted," Hudson said. "They are presumed innocent [until proven guilty], waiting for trial behind bars at a cost to taxpayers of about $1.2 billion a year."
Investments in water infrastructure and dementia prevention
One ballot measure with a similar price tag, but less controversial, is Proposition 4. This amendment would dedicate up to $1 billion per year from existing state sales tax revenue to the Texas Water Fund for the next 20 years. The money would be used to fix some of the state's most pressing water infrastructure needs.
Sarah Rountree Schlessinger, CEO of the Texas Water Foundation, estimated the state's total needs for new water and wastewater infrastructure, as well as to replace aging infrastructure, at $150 billion, far above the maximum of $20 billion that Prop 4 would provide.
"Is it enough? No, it’s not enough to meet everything," Schlessinger said. "Is it a significant move towards funding water infrastructure in Texas? Yes, significantly so."
Schlessinger said the total amount of money the amendment would commit is less significant than the fact that the amendment provides for a dedicated and ongoing source of funds – allowing the state to better plan for long-term needs, like combatting droughts worsening in the face of climate change.
Jeremy Mazur, director of infrastructure and natural resources policy at the public policy think tank Texas 2036, said Houston and other major cities have a lot riding on the passage of Prop 4.
"First, they need to expand and diversify their water supply portfolio for a dynamic, growing region," Mazur said. "And second, there’s also this issue of aging, deteriorating, leaking water systems within the Houston metropolitan area that really need to be resolved sometime soon. These are systems that annoy everyday families and businesses through inadequate or leaking service, causing boil water notices or even service interruptions."
Then there's Proposition 14, which would create a state institute for fighting dementia, formally the Dementia Prevention and Research Institute of Texas (DPRIT), similar to one Texas has already established to target cancer (CPRIT). The amendment would provide an initial $3 billion in state surplus revenue to a fund dedicated to finding medical breakthroughs, cures, and prevention.
"It would be a breakthrough," said Ashley McPhail, chief external affairs and administration officer at the Texas Medical Center. "It really would make a huge difference in sort of the path and trajectory that we are on for dementia and other related diseases within this space. If you look across funding, this would be sort of the second-largest funding for something like this, for brain health outside of the [National Institutes of Health] in the United States."
McPhail said the investment of state tax dollars would more than pay for itself. It could lure hundreds of researchers to the state and spark the creation of dozens of companies dedicated to fighting Alzheimer's disease and other forms of dementia, much as CPRIT has done already with cancer research. And that doesn't even touch the savings in residents' medical bills.
"Currently, over 400,000 Texans are living with Alzheimer’s, which costs families over $20 billion per year," McPhail said. "Texas ranks third in the nation for the number of Alzheimer’s cases and second in the number of Alzheimer’s deaths. So, the need here in Texas is also very acute and specific from that side, and I would say it’s a $3.9 billion cost for Alzheimer’s to the Texas Medicaid program every year."