Senators question proposed tax cuts

State Sen. Kevin Eltife, R-Tyler

3:00 p.m. Post has been updated throughout

The Senate Finance Committee’s first real budget hearing of the legislative session kicked off on Monday with Sen. Kevin Eltife, R-Tyler, suggesting the $4 billion worth of tax cuts proposed last week by Lt. Gov. Dan Patrick and Committee Chairwoman Jane Nelson may not be feasible given all the pressing costs facing the state — including the possible cost of an impending court ruling on school finance.

Eltife, one of 15 members of the budget-writing panel, said he “of course” supports tax cuts but “can’t vote for tax cuts until I know this budget” covers all those needs, including state employee pensions, transportation and water infrastructure.

“It’s hard for me to support removing $4 billion from this state’s revenue stream until we know we can meet the needs of the state,” said Eltife, who asked if state budget staff could prepare projections for how tax cuts and ending a diversion of $1.2 billion worth of road funding would affect state coffers in the long-term.

Nelson, who all but guaranteed tax cuts last week, said “I absolutely agree with that.”

“I’m not going to ask this committee to vote on any tax relief until we know exactly what we’re dealing with,” the Flower Mound Republican said.

She later added: “There are lots of different ideas of providing tax relief and certainly we need to have a very, very good idea of what our needs are before we start paying for our wants.”

State Sen. John Whitmire, D-Houston, asked whether that $4 billion amount could shrink or grow and whether the committee would be forced to decide on the two-year budget and tax cuts with one vote. He also suggested there should be a focus on paying down state debt.

“I wanted to earmark $4 billion for tax relief until we have a feel of what we want to do,” Nelson replied, explaining that there is still another $5 billion left to spend before reaching a constitutional spending cap.

“If everybody wants to take the whole $5 billion and put it in tax relief — OK — but you’re not going to have a lot of other things that I think we would choose to do so it’s our decision,” she said.

As for a catch-all vote, Nelson said that “depends on what kind of tax relief we provide.”

“It would appear that we all are going forward with an open mind,” Whitmire later said.

“Yes, yeah. We are blessed to be living in a time where our economy has done very well,” Nelson replied. “We’ve got some extra money that we can, you know, add to some things that we want to do; We can pay down debt, we can do a lot of things but it is going to be determined by this committee and this Senate.  I’m not dug in on almost anything.”

The finance committee is hearing testimony Monday on Article IV, the portion of the state budget that funds the judiciary and related agencies.

The panel is expected to discuss the Public Integrity Unit — a special division of the Travis County District Attorney’s office that investigates public corruption and for which then-Gov. Rick Perry vetoed funding in 2013.

Perry’s prior threat to withhold that more than $7 million in state money — made in an apparent attempt to force , in part, to his indictment

The Senate’s first-draft budget includes no funding for the Public Integrity Unit, which long has been a target of Texas Republicans even though it targets mostly Democrats.

In a statement sent Monday morning before the hearing, Nelson suggested continued funding may be contingent on relocation of the special unit, which also investigates insurance fraud and motor fuels tax fraud.

“The functions of the Public Integrity Unit are important, but they need to be carried out by individuals who are accountable to the entire state, not just the voters of one county,” Nelson said in a statement. “We have all session to consider where these functions should be housed and at what level they should be funded.”

The statement notes that the Senate’s draft budget, contained in Senate Bill 2, “keeps funding levels for the PIU at zero as the Legislature considers the future of the unit this session.”

State Sen. Kevin Eltife, R-Tyler

State Sen. Kevin Eltife, R-Tyler