Relying On Dedicated Fees Instead Of State Taxes: The Case of the System Benefit Fund

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Eva DeLuna Castro /(512) 320-0222 x 103

March 22, 2007

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As the House and Senate finish their “mark up” of the proposed state budget for 2008-2009, the fight continues between those wanting to use dedicated funds to balance the General Revenue budget, and those wanting to see dedicated funds spent for their intended purpose. This Policy Page explains this arcane but important budget issue, using the System Benefit Fund as an example. Of course, this issue is yet one more illustration of the true problem facing Texas: a regressive state/local tax system that does not generate enough money to meet our communities’ growing needs for education, health care, and other basic services.