Public Policy in Texas Chapter 12

TRENDS IN TEXAS STATE EXPENDITURES— ALL FUNDS, BY BIENNIAL BUDGET PERIODS 1994–2015 (IN MILLIONS OF DOLLARS) Copyright © 2016 Cengage Learning. All rights reserved. 2

REVENUES Texas revenues come from: State taxes (47%) Federal funding (36%) Interest on investments Revenues from public lands Licenses, fees and other minor non-tax sources Copyright © 2016 Cengage Learning. All rights reserved. 3

SOURCES OF ESTIMATED STATE REVENUES, 2014–2015 BUDGET PERIOD Copyright © 2016 Cengage Learning. All rights reserved. 4 What are the arguments for and against consumer taxes?

REVENUES Taxation National taxes State taxes General sales taxes Selective sales taxes (hidden) Gross-receipt taxes Severance taxes Copyright © 2016 Cengage Learning. All rights reserved. 5

REVENUES Taxation (cont.) Local taxes Ad valorem taxes Real property Personal property Copyright © 2016 Cengage Learning. All rights reserved. 6

REVENUES The Politics of Taxation The tax base: who should pay? Not all taxes are equally effective in raising funds for the public till Tax rates Tax base Broad-based tax Copyright © 2016 Cengage Learning. All rights reserved. 7

REVENUES The Politics of Taxation (cont.) Regulatory taxes—designed to control isolated individual choices Benefits received tax—assessed according to the services received by the payers Ability-to-pay tax—apportioned according to taxpayers’ financial capacity Copyright © 2016 Cengage Learning. All rights reserved. 8

REVENUES The Politics of Taxation (cont.) Tax rates: progressive or regressive taxes? Progressive tax rates Increase as income increases Federal income tax Regressive tax rates Tax rate declines as income increases General sales tax Declining marginal propensity to consume Copyright © 2016 Cengage Learning. All rights reserved. 9

REVENUES The Politics of Taxation (cont.) Texas has one of most regressive tax structures among states Lower-income families pay disproportionate share Supply-side economics Copyright © 2016 Cengage Learning. All rights reserved. 10 Would higher rates of state spending in Texas drive up taxes and discourage economic growth in the state?

REVENUES Other Revenues Federal grants-in-aid Borrowing and other revenues General-obligation bonds Revenue bonds Other non-tax revenues: Various licenses, fines and fees Dividends from investments Sale and leasing of public lands Copyright © 2016 Cengage Learning. All rights reserved. 11

STATE SPENDING The Appropriations Process Allows legislature to legally authorize state to spend money The Politics of State Spending Many factors; competing interests Logrolling Copyright © 2016 Cengage Learning. All rights reserved. 12 Why do state spending decisions usually generate strong political controversy?

STATE APPROPRIATIONS BY FUNCTION, Copyright © 2016 Cengage Learning. All rights reserved. 13

EDUCATION Elementary and Secondary Schools History Recent trends School accountability standards Privatization Copyright © 2016 Cengage Learning. All rights reserved. 14

EDUCATION Elementary and Secondary Schools (cont.) Public school administration State administration Independent school districts Charter schools Copyright © 2016 Cengage Learning. All rights reserved. 15

EDUCATION The Politics of Public Education Curriculum The curriculum and the culture wars The Revisionaries: l Textbooks Faculties Copyright © 2016 Cengage Learning. All rights reserved. 16

EDUCATION The Politics of Public Education (cont.) Students Public school finance Federal State Local → ad valorem property taxes School privatization Copyright © 2016 Cengage Learning. All rights reserved. 17 Which factors most affect student achievement?

EDUCATION Higher Education Administration of colleges and universities The Texas Higher Education Coordinating Board Community college approach Copyright © 2016 Cengage Learning. All rights reserved. 18

TEXAS PUBLIC HIGHER EDUCATION– ENROLLMENTS, FALL 2012 Copyright © 2016 Cengage Learning. All rights reserved. 19 What challenges do growing enrollments present to Texas institutions of higher learning?

EDUCATION The Politics of Higher Education Faculty issues Financial issues Student accessibility Student diversity Affirmative action Student retention Quality Copyright © 2016 Cengage Learning. All rights reserved. 20

FULL-TIME TEXAS RESIDENT TUITION AND FEES PER YEAR Copyright © 2016 Cengage Learning. All rights reserved. 21

HEALTH AND HUMAN SERVICES Health Programs Direct health services State health-insurance programs Medicaid Children’s Health Insurance Program (CHIP) Medicare Copyright © 2016 Cengage Learning. All rights reserved. 22

Copyright © 2016 Cengage Learning TEXAS HEALTH AND HUMAN SERVICE AGENCIES 23 Why is it important for a single commission to coordinate so many of the state’s human services?

HEALTH AND HUMAN SERVICES Health Programs (cont.) Private health insurance The uninsured 1 in 4 Texans has no health insurance Highest percentage of uninsured residents Health Care Reform Copyright © 2016 Cengage Learning. All rights reserved. 24 How does the Affordable Care Act expand the role of state and federal governments? How does the Affordable Care Act expand the role of state and federal governments?

HEALTH AND HUMAN SERVICES Income Support Programs Temporary Assistance to Needy Families (TANF) Unemployment insurance Texas Workforce Commission Copyright © 2016 Cengage Learning. All rights reserved. 25

HOW PEOPLE GET HEALTH INSURANCE: PERCENT BY INSURER Copyright © 2016 Cengage Learning. All rights reserved. 26 Is health insurance a private matter beyond the proper scope of government? Is health insurance a private matter beyond the proper scope of government?

HEALTH AND HUMAN SERVICES The Politics of Welfare and Income Redistribution Defining welfare Unearned, government-provided benefits Corporate welfare Welfare myths Welfare realities The causes of poverty Copyright © 2016 Cengage Learning. All rights reserved. 27