David Dewhurst says Texas Senate will push for more business tax cuts
Filed under Local Politics at Apr 2013
Robert T. Garrett
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AUSTIN — Lt. Gov. David Dewhurst says the Texas Senate will push for expanded tax cuts, adding relief for research-driven businesses and broadband and telecom companies to a package that already targets electricity ratepayers and small business.
But Dewhurst, the Senate's presiding officer, said Tuesday that the chamber's tax reductions won't be in the form Gov. Rick Perry has suggested — or cost as much.
Late last week, a spokesman said Perry would not sign the two-year state budget if lawmakers don't pass "significant tax relief."
Rich Parsons, the Perry spokesman, did not spell out what would pass muster with the Republican governor. But Perry has set a goal of $1.8 billion in tax cuts — $1.6 billion of it to reduce franchise taxes for 109,000 Texas businesses.
Dewhurst, though, told The Dallas Morning News that the Senate is prepared to pass tax cuts worth about $1.3 billion over the next two years. That's about a half billion shy of the governor's target.
"We're trying to provide as much tax relief to the voters in Texas as we can and at the same time create more transparency and eliminate" accounts where the state accumulates money for a stated purpose but generally hoards it to balance the books, Dewhurst said.
While many House GOP leaders have been less enthusiastic about passing big tax cuts, citing deep budget cuts from 2011 that haven't been fully undone so far this session, tax cut bills are beginning to move in both chambers, said liberal tax policy analyst Dick Lavine.
Lavine, with the think tank the Center for Public Policy Priorities, noted that bills to extend major school property tax subsidies to corporations will hit the floor of each house this week. A bill restoring a franchise-tax exemption of research and development costs will be before the House on Wednesday.
"It is the wrong time to be considering tax cuts, when the Legislature is obviously struggling to find funds for investments in water, transportation and education," he said.
Dewhurst, though, said lawmakers should do both — boost spending in those areas and keep cutting taxes.
He pointed out that the Senate already has passed and sent to the House a bill that would provide $730 million in refunds to electric ratepayers from the System Benefit Fund. The fund, which has more than $800 million unspent, was intended to give discounts to poor ratepayers in areas where consumers have a choice of electric retailers.
"We're expecting to see [tax] bills come over from the House," Dewhurst said. "If they don't, we can quickly try to move ours."
He said the Senate is "ready to pass" a bill that would permanently exempt businesses grossing less than $1 million a year from the franchise tax. It would cost just under $200 million in the next two years, the lieutenant governor said.
Dewhurst said the exemption of research and development costs would cost about $240 million.
A fourth proposal the Senate backs is a sales tax refund for telecom, Internet and cable TV companies, he said. Its cost would be capped at $50 million a year.
While Perry has said lawmakers should pay for some part of the tax cuts with rainy day dollars, Dewhurst said the Senate wants to pay for at least half of the tab with available general-purpose state revenue.
"Whether part or all of the rest would come from the rainy day fund is not decided," he said.
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