The Jeffersonian: Politicks, Sports, and Culture

Tuesday, July 19, 2005

E-N: Clock Runs Out On Tax Measure

I haven't really posted anything on this matter because it's been extremely hard to tell what exactly is going to happen in this special session. But it looks like we're going to have another one now. Just posted by the Express-News:

AUSTIN — Lawmakers have run out of time to decide how to raise billions in state taxes to cut local school property taxes before their special session must end Wednesday, a lead negotiator on the issue said today.

After House and Senate negotiators met and detailed differences that still remain, Sen. Steve Ogden said, “Each one of these issues in isolation is not a deal killer. But you add 'em all up together and we just don't have an agreement.

“The reason the deal's dead is because we're out of time, not because we can't agree,” said Ogden, R-Bryan, the Senate Finance Committee chairman.

Ogden expressed optimism that negotiators could reach agreement on the tax measure, House Bill 3, if Gov. Rick Perry calls another special session on the issue.

Perry repeated his intention of doing so if lawmakers don't finish the job in this special session. The governor summoned lawmakers back to Austin on June 21 for the 30-day session after the House and Senate couldn't agree on a school funding and tax overhaul in the recent regular session.

“The idea that we walk away from the most important issue that this Legislature deals with is nonsense. We'll be back in special session if we don't get it done,” Perry said. “If we need to be here all summer getting this done, we will.”

Ogden said he believes Perry’s decision on a new special session to deal with taxes likely will hinge on whether lawmakers are able to pass a related bill, House Bill 2, that would adjust school funding formulas and provide extra money from the budget for items including a teacher pay raise.

None of the state tax money raised in House Bill 3 is intended to fund the school changes. It only would go for local property tax relief. But the two measures are linked because the school bill assumes there will be property tax relief.

Leaders said HB2 could be considered before today or Wednesday.

Rep. Jim Keffer, R-Eastland, the House Ways and Means Committee chairman, said lawmakers would continue to work on the tax measure. He and Ogden are the lead negotiators on it.

“We all know the realities of the time that we're having to look at here, and regulations and rules of the House and Senate,” Keffer said.

“But we're going to continue to work on this, and whether it's sooner or later — I know we all need to go home and do some of our other work — but we're here at the governor's call. And we'll continue to work on this.”

Keffer added, “I just want to assure the people of the state of Texas that we've been working hard on this. And yeah, it's a complex issue, and you can't do it quickly because everything you do has got a ripple effect on some industry and how they create jobs in this state, and we want to make sure that whatever we do doesn't harm the economy.”

The House and Senate both approved tax measures that would plug loopholes in the franchise tax that allow many corporations to avoid the levy, but abandoned a more ambitious overhaul attempted during the regular session that would apply to more firms and potentially allow a lower business tax rate.

The latest proposal drew fierce opposition from businesses, including oil-and-gas companies that said they were being singled out as capital-intensive industries for the brunt of the burden.

The measure also drew opposition from consumer advocates for lower and middle-income Texans, who voiced concern that its reliance on consumer taxes to relieve property taxes would unfairly shift too much of the tax burden to lower- and middle-income Texans.

Many of the elements in each plan mirrored a proposal championed by Perry and reflected plans passed in the regular session, including sales and cigarette tax increases.

“You've got basically the governor's plan. It's questionable as to whether this would pass the House,” said Rep. Charlie Geren, R-Fort Worth. “It's not good. We'd like it to be a lot better.”
So it looks like we'll be back for a second special session. But if Geren's correct, even if all the details are hammered out between House and Senate, it may still not pass.