Investing in a top-heavy bureaucracy

The Austin American Statesman has run several stories (“Management positions, salary increase at DPS while state trooper pay languish” and “State agencies defend executive pay“) that reveals how quickly administrative salaries have grown in the Department of Public Safety while the salaries of state troopers have lagged behind. A relatively few administrators receive high salaries while most of the people who do the day-to-day work of the government receive much less. Earlier this year the Dallas Morning New reported (“Audit: Texas governor, AG, land commissioner boosted staffs as state workers’ overall numbers shrank“) that while the state lost 3,200 employees, the governor, attorney general, and land commissioner’s offices grew. Texas also saw the Governor approve a big salary for his choice for education commissioner (“Texas Schools Chief Michael Williams Will Make $215K“), granting his political appointee a salary 15 percent above the amount appropriated for the position the year. Of course, that year also so large budget cuts to the Texas Education Agency and school budgets across the state. Meanwhile, we learned that the Governor’s Chief of Staff earned $325,000 a year–that after earning a $162,000 bonus as she left the Employee Retirement System (ERS) even as state employees were told that reductions had to be made to their benefits because of budget shortfalls.

We’re told that these salaries and bonuses are needed to compete with the private sector. However, they only seem to be worried about staying competitive on top executive salaries and I see much less interest in providing competitive salaries for everyone else.

The fact that our state’s leaders and their appointees have made giving pay raises to high level bureaucrats a priority while street-level bureaucrats like state troopers and teachers went neglected tells us that either this is what they want or that they are incompetent. I suspect most Texans are not going to like either answer.

Texas Property Tax Rates

Tax-Rates.org has put together a report (Property Tax Rates By State 2013“) ranking the states by their property tax rate. Many Texans will be surprised to see how high we are in  the rankings.

Map of tax rates by state

Our ranking out of the fifty states varies depends whether you calculate our ranking based on median property tax (14th),  property tax as percentage of income (12th), or property tax as  percentage of property value (3rd). According to their analysis of Texas property taxes, the median property tax in Texas is 1.81% of a property’s estimated value each year. The median value of a home in the state is $125,800 and the media yearly property tax is $2,275.

Regardless, we generally think about Texas as a low tax state. What’s up?

One of the answers is that keeping up the image of a low tax state has encouraged state politicians to push as much of the tax burden to the local level. If the sales tax goes up, voters blame the governor or legislature. If property tax rates go up, voters blame local officials–even as those local officials operate under funding schemes dictated by the state.

The Texas Constitution bans an official state-wide property tax. However, it permits local governments to tax property to pay for public schools, services provided by the county, and other things often paid for by state taxes in other states. It’s kind of a tax shell game since the state government has final say over the tax policies at both the state and local level.