Fake News: Tax Cuts in House Budget 10x Smaller Than Promised

The theme for this year’s house budget proposal includes “reducing taxes,” but the house budget committee forgot the “reducing” part.

Budget total$31.3 billion
Budget surplus$2 billion
Claimed tax cuts$3 billion
Actual tax cuts$0.3 billion

In the official house budget briefing, House Budget Chairman Murrell Smith claimed that his proposal returns $3 billion to taxpayers. This is false!

  • Fact: the real number is roughly $0.3 billion, or less than one penny per dollar spent. Compared to the historic $2 billion tax surplus, it’s only $0.14 per dollar.*

  • Fact: the $3 billion in “active tax cuts” aren’t actually in the budget. That number is merely an estimate of what you would have paid if the state had not reduced certain taxes in the past (such as the sales tax exemption on groceries), and includes adjustments for inflation.

  • Fact: the actual proposed tax cuts barely move the needle for most taxpayers ($100 income tax credit and 0.2% reduction in the top income tax bracket). It’s been over a decade since the state passed any serious cuts to taxes, and the house tax reform committee’s proposal to cut sales and income taxes has been ignored by the house.

  • Fact: the Governor asked for 1/4 of the budget surplus to be refunded to taxpayers, which would have included eliminating all income taxes on retirement pay for veterans and first responders. The house budget committee ignored even this meager request.

  • Fact: a budget freeze would have resulted in 6x higher tax savings, without cutting any government agencies or programs. This amount ($1.6 trillion) would have meant over $1,000 per household--and still would have only amounted to 5% of the overall budget.**

*$128 million income tax credit + $120 million income tax cut (7% bracket to 6.8%) + $29 million extra property tax relief = $277 million, or $0.3 billion.

**The total funds 2020-2021 budget proposal is $1.6 billion larger than the 2019-2020 budget, a 5.6% increase.