88th Legislature: Tax Cuts, Border Security, and Impeachment

The Texas Legislature rarely meets without generating some drama, and 2023 gatherings were no exception. Yet, despite intrigue aplenty in the 88th biennial session and subsequent special sessions, lawmakers were able to pass the largest two-year budget ever and, in a second special session, a record-breaking property tax cut. Updated 7 months ago
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By Carolyn Barta

The Texas Legislature rarely meets without generating some drama, and 2023 gatherings were no exception. Yet, despite intrigue aplenty in the 88th biennial session and subsequent special sessions, lawmakers were able to pass the largest two-year budget ever and, in a second special session, a record-breaking property tax cut.

The usual chaotic end to the 140-day regular session was complicated by the unexpected delivery of 20 articles of impeachment by a House investigative committee against Atty. Gen. Ken Paxton. Two days before adjournment sine die May 29, 2023, the Republican-dominated Texas House voted overwhelmingly (121 to 23) to impeach the embattled 3-term Republican state official, long mired in legal and ethical challenges. His fate would depend on a later Senate trial.

Before that, the House voted to expel State Rep. Bryan Slaton, R-Royse City, after an internal investigation determined he had engaged in inappropriate sexual conduct with a 19-year-old aide after furnishing her with alcohol.

Both actions were historic. Only one statewide elected official had ever been impeached and removed from office, Gov. James Ferguson more than 100 years before. Slaton was the first House member ousted since 1927.

From the January opening gavel, the 140-day session was destined to be historic for another reason — an embarrassment of riches. Lawmakers could address spending needs with a stunning $32.7 billion budget surplus, attributed to Texas’ rapid economic rebound from COVID-19, inflation, and GOP leaders’ hoarding of federal pandemic aid.

Republican leaders vowed to return much of the surplus to property owners and, after a months-long stalemate between the House and Senate, finally delivered an $18 billion tax cut deal, which primary author Sen. Paul Bettencourt, R-Houston, called a “Texas-sized tax cut.”

Lawmakers also were called upon to respond to the worst school shooting in Texas history — the tragic mass killing of 19 students and two teachers at a Uvalde elementary school on May 24, 2022.

The pot, as usual, was stirred by partisan politics. Republican dominance — 85–64 in the House and 19–12 in the Senate, along with a Republican governor, lieutenant governor and House speaker — guaranteed that controversial super-conservative policy proposals would be offered to maintain Texas’ national reputation as a flagship red state.

But divisiveness and infighting prevailed. Differences between the two houses stymied passage of top priority bills of Gov. Greg Abbott and Lt. Gov. Dan Patrick, the Senate’s presiding officer and second-most-powerful statewide elected official. Open sniping developed between the lieutenant governor and the House speaker — Rep. Dade Phelan, R-Beaumont — elected by the chamber’s membership.

Republicans campaigned on promises of property tax relief in the face of escalating property values but split over differing plans. The House, led by Phelan, wanted to spread the relief among all landowners — homeowners and business and commercial property owners — by providing state funds to lower local property tax rates through “rate compression.” The Senate accepted rate compression but also insisted on raising homestead exemptions from $40,000 to $100,000, which Patrick championed to help residential homeowners more.

Abbott stayed mostly mute during the fight between the chambers, finally siding with the House plan. When no plan passed, Abbott promised to keep lawmakers in Austin all summer, if needed, to address property taxes and his other priorities.

During the first 30-day special session in June, the governor tried to force delivery of a property tax bill by vetoing an unheard-of 70-plus bills, the second-highest number behind 82 vetoed by Gov. Rick Perry in 2001. Most of Abbott’s vetoes were Senate bills, and Patrick argued they were not vetoed for policy reasons. To be sure, the governor said the bills could wait until lawmakers figured out property taxes.

Midway through Abbott’s second called overtime session, the Senate and House reached the $18 billion compromise, which included more than $5 billion approved for property tax relief in 2019 and $12.6 billion to reduce the school property tax rate by 10.7 cents per $100 valuation. All three leaders claimed victory.

Under the deal, homeowners would have $100,000 of the value of their house not subjected to school property taxes, pleasing Patrick since the higher homestead exemptions would provide more relief for homes of modest values. But business also got a break, pleasing Phelan and Abbott. Non-homesteaded residential and commercial properties valued at $5 million or less would get a temporary cap of 20% on appraisal increases for three years, and franchise taxes for small businesses would be cut.

The state would send $12 billion to school districts over two years to offset a reduction in school district maintenance and operations taxes. Absent was any targeted relief for renters or increase in teacher pay, although Patrick and other Republicans promised teacher pay would be taken up in a fall special session. Abbott signed the bill, and parts of the plan would be put in a constitutional amendment election in November.

Abbott’s other top priority was to provide state funds for “school choice.” At events across the state, he promoted access to an “education savings account” for parents to use for private schools or home-schooling. Democrats and rural Republicans balked for fear money would be siphoned from public schools.

With the extraordinary $32.7 billion budget surplus, some lawmakers were optimistic early that big issues facing public schools could be addressed. But clashing political ideologies, the fight over school vouchers, and squabbles between the Senate and House thwarted passage of bills that could have sent billions to public education. Among the disappointments at regular session’s end was the failure to increase the per-student allotment and pass teacher pay raises to address a critical teacher shortage.

Much of the regular session’s focus was on issues evolving from broad cultural wars sweeping the nation. Texas joined 17 other states restricting transgender minors from accessing puberty blockers and hormone therapies. Laws were passed to require college athletes to compete on sports teams that align with their sex assigned at birth, to prohibit sexualized performances and drag shows in the presence of minors, and to ban sexually explicit books in school libraries.

Members also debated various religion-based bills, such as allowing schools to hire chaplains, setting aside time for Bible reading and prayer, and requiring schools to display the 10 Commandments.

The Paxton drama and disputes over social issues obscured more monumental actions taken during the regular session, including passage of the largest-ever budget bill, topping $300 billion for the first time.

Here is an expanded look.

Budget: The two-year appropriations bill, the only act the Legislature is constitutionally required to pass, topped out at an unheard-of $321.3 billion. It allocated significant funds for tax cuts, improving mental health access, pay raises for state employees and retired teachers, border security, state parks expansions, the state’s energy grid, infrastructure for broadband and water, and higher education. Some $4 billion was set aside to increase teacher pay and school funding, but only if private school vouchers were passed.

The budget allocated more than $5 billion for border security, including $1 million for a border wall, almost $1.4 billion for Abbott to use at his discretion for border operations, and nearly $750 million to the Texas Department of Public Safety for border security.

Other expenditures included $1 billion for a new state water fund to jumpstart massive water supply projects and fix aging water infrastructure and $1 billion in park funding, both contingent on voter approval in November. Some $3 billion would be poured into state behavioral health services, most to renovate or build new mental health state hospitals. Lawmakers appropriated $18 million for opioid overdose prevention, education, and overdose reversal medication.

The budget left $10.7 billion in the general fund and $27 billion in the Rainy Day Fund.

Higher Ed: The Legislature approved a $700 million investment in higher education to allow universities to keep tuition flat for the next two years, but approval was tied to the dismantling of diversity, equity, and inclusion (DEI) offices and revoking or limiting tenure. DEI programs were halted. Unable to eliminate tenure, which offers job protection and academic freedom to professors, legislators made it easier to fire faculty for reasons such as “professional incompetence” or “conduct involving moral turpitude.”

Guns: Lawmakers declined to significantly restrict gun purchase and carry in the aftermath of the deadly Uvalde school attack. Uvalde parents and their supporters urged members to raise the minimum age to own a semi-automatic assault rifle, which would have prevented the teenage gunman in Uvalde from legally purchasing his weapons.

Instead, they passed a law requiring school districts to have a safety guard at every school, which some regarded as a little-funded mandate with the money provided. The rare bills limiting access to guns (1) closed a loophole in state law that allowed people with serious mental health issues as juveniles to legally purchase firearms and (2) required courts to report certain involuntary mental health hospitalizations to the federal gun background check system.

Border security: Bills passed would give federal Border Patrol agents arrest, search, and seizure authority if a border crime warrants felony charges; compensate farmers and ranchers for property damage caused by border-related crimes; and give the governor power to develop a border security plan in an interstate compact. Abbott wanted more action on border control, including increased penalties for human smuggling and operating a stash house.

Shoring up the power grid: A fund was created to encourage construction of gas-fueled power plants even though many failed dramatically in the deadly 2021 winter storm, when millions were without power for days. But how electricity is created and sold in the Texas market was not changed.

Expanding broadband: A $1.5 billion infrastructure fund was set up to expand internet availability, as 7 million people in Texas lack access to service. It requires voter approval.

Preempting local regulations: Sweeping legislation referred to as the “Death Star” bill bars cities and counties from issuing local ordinances that go beyond what’s allowed under state law in areas including land use, labor, finance, environment, agriculture, public health, and more. Local officials argued their communities would be prevented from enacting regulations tailored to their specific needs. Houston wasted no time in filing suit.

Other bills passed would:

  • Combat a growing fentanyl crisis by allowing people to be prosecuted for murder who manufacture or distribute fentanyl illegally in cases that lead to death.
  • Extend postpartum Medicaid benefits for low-income mothers from two months to a full year, to stem the rise in maternal deaths.
  • Restore election fraud to a felony, after it was made a misdemeanor two years before.

High-profile bills that failed:

  • Prison air conditioning: A bill to spend more than a half-billion to air-condition state prisons was stymied despite a study that found 13% of Texas prison deaths (271) between 2001 and 2019 may have been attributed to extreme Texas heat in prisons without air con.
  • Casinos: The push to legalize casino gambling attracted public interest early, but the primary casino proposal fell short of votes.
    Restricting foreign land ownership of agricultural land, timberland, and oil and gas rights by entities associated with any country that posed a risk to U.S. national interests.
  • Permanent adoption of Daylight Saving Time.

Impeachment 

The Texas Senate voted on September 16, 2023, after a 10-day trial, to acquit Atty. Gen. Ken Paxton on 16 articles of impeachment. Twenty-one senators had to approve at least one article to convict and remove him from office. Separately, senators voted to dismiss four other articles. The Senate, unlike the House, voted largely along party lines. The closest votes were 14 to convict and 16 for acquittal – the outcome on 12 articles. Only two Republicans sided with the chamber’s 12 Democrats. Paxton’s wife, Sen. Angela Paxton, R-McKinney, was present but not allowed to vote. 

An outspoken ally of President Trump, Paxton sued the Biden administration multiple times, spearheaded a lawsuit to overturn the 2020 presidential election and built a reputation as a Christian conservative and family values Republican. House impeachment managers charged him with abuse of office, bribery, dereliction of duty, and obstruction of justice. They claimed he used his office to benefit Austin real estate investor Nate Paul, a campaign donor who facilitated the A-G’s alleged extramarital affair with a woman identified as Laura Olson, a former Senate aide hired by Paul. None of those three testified. 

Lt. Gov. Dan Patrick presided as trial judge. Both sides employed high-profile Texas lawyers. House managers questioned 13 witnesses, the defense only four but conducted tough cross-examinations. Prosecutors built their case on the testimony of senior staff members in the A-G’s office who went to the FBI in September 2020 with allegations that Paxton was engaging in conduct that could be illegal. Defense lawyer Tony Buzbee maintained the House managers failed to prove beyond a reasonable doubt any of their charges. 

Four of the whistleblowers sued Paxton claiming wrongful termination and agreed to a $3.3 million settlement. The agency’s request for state funds for that payout triggered the inquiry by the House Committee on General Investigating, chaired by Rep. Andrew Murr, R-Junction, who then headed the House managers team. 

Paxton, a former state representative and senator serving his third term as attorney general, was returned to office as the state’s top lawyer. But he still faces securities fraud charges in state court, an FBI investigation, and a state bar complaint. And the Legislature still faces another potential special session to consider school choice.

Carolyn Barta is a former political writer for The Dallas Morning News and retired journalism professor at Southern Methodist University.

This article first appeared in the Texas Almanac 2024–2025.

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