Proposing a constitutional amendment requiring the periodic review of state and local tax preferences and providing an expiration date for certain tax preferences.
The implementation of SJR38 would significantly impact state law by adding a new procedural requirement for tax preferences. With this amendment, local and state governments would need to regularly review their tax exemptions and incentives, creating a culture of reassessment and potential removal of outdated or ineffective tax breaks. It would require the legislature to define 'tax preference' and create administrative procedures, thus standardizing the evaluation process across the board for all tax incentives.
SJR38 proposes a constitutional amendment to the Texas Constitution that mandates the periodic review of state and local tax preferences. The bill aims to introduce more accountability and oversight regarding tax breaks and incentives provided by the state. It specifies that any tax preference enacted after September 1, 2016, would expire six years from its effective date unless the legislature decides to modify the duration. This establishes a systematic evaluation of tax exemptions and ensures that they are re-assessed regularly, promoting transparency in fiscal policy.
Debate around SJR38 may center on views regarding taxation and fiscal responsibility. Proponents of the bill argue that regular reviews can eliminate wasteful tax expenditures, ensuring that taxpayers are not funding ineffective programs. Critics, however, may express concern that this could lead to the premature expiration of valuable tax incentives that encourage economic growth or support vital industries. The essential tension will likely hinge on balancing fiscal prudence with the need to support local economic development.