Texans Support Targeted Tax Increases, Legalized Gambling

Hobby School Survey Found State Income Tax is Still Unpopular

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As the state legislature faces a budget shortfall, Texans say they support some ways of raising revenue. Photo: Getty Images

As Texas legislators address a looming multibillion-dollar budget shortfall, people from across the state have some suggestions. They support raising taxes on e-cigarettes and vaping products, closing property tax loopholes exploited by large companies and legalizing and taxing marijuana and casino gambling. A state income tax remains a nonstarter, at least for regular Texans, although a sizable majority favors a state income tax on millionaires.

A survey of Texans by the University of Houston Hobby School of Public Affairs gauged support for those and other potential sources of revenue as part of a sweeping look at where Texans stand on topics expected to come before the Legislature this year.

“Finding new sources of revenue is never easy in the Texas Legislature,” said Kirk P. Watson, a former state senator and founding dean of the Hobby School. “But we found that there is broad agreement among Texans, even across party lines, on some potential new or increased sources of funding.”

A state income tax was the least popular of 18 potential measures to increase state revenue. Just 18% of people who had an opinion on the topic supported the idea, while 82% opposed.

Extending the sales tax to bottled water was similarly unpopular, with just 30% of Texans supporting it.
At the other extreme, 84% support taxing e-cigarettes and vaping supplies, 83% support closing property tax loopholes and 72% support increasing the cigarette tax.The full report is available at the Hobby School website.

There was similarly strong support for exempting certain products from the sales tax, ranging from 89% who support a two-week sales tax exemption for college textbooks to 77% who support an exemption for internet access.

“The budget is always a balancing act of competing priorities,” said Renée Cross, senior director of the Hobby School. “Even though legislators may need to consider additional sources of revenue, given the projected deficit resulting from the COVID-19 pandemic and dropping revenues from oil and gas production, there will still be a push to exempt certain items from the sales tax.”

That could include diapers, feminine hygiene products and even the adoption of rescue animals – a sales tax exemption favored by 85% of Texans – in addition to internet access and textbooks.
The survey also looked at support for other topics legislators may tackle, ranging from expanding Medicaid – 69% of Texans support that, notable for a state which has the highest number of uninsured residents in the nation – to making possession of small amounts of marijuana punishable only by a fine, similar to how traffic tickets are handled, which is supported by 77% of Texans.

On other topics:
• 72% support the George Floyd Act, which covers a number of criminal justice reforms and is named for Houston native George Floyd, a Black man killed by a white Minneapolis police officer last year
• 70% favor legalizing and taxing casino gambling
• 66% favor legalizing and taxing marijuana
• 66% favor allowing online voter registration
• 62% favor adopting a state income tax on those earning more than $1 million dollars
• 70% favor using an independent commission to redraw boundaries for redistricting

Mark P. Jones, a fellow at Rice University’s Baker Institute and a Hobby School senior research associate, said that while there were stark differences between political parties on some subjects, the researchers also found broad areas of agreement.

“Republicans are more likely to oppose liberalizing the state’s marijuana laws and expanding Medicaid,” Jones said. “And in general, Republicans were less likely to support raising taxes across a range of options. But on issues that could affect a large number of the state’s residents, the survey demonstrates that there are a substantial number of areas with broad bipartisan popular support.”

The survey was fielded online Jan. 12-20 with 1,329 YouGov respondents, resulting in a confidence interval of +/-2.7%. Respondents were matched to a sampling frame on gender, age, ethnicity/race and education and are representative of the Texas adult population.