Dan Patrick reveals how he wants to pay for tax cuts

Texas’ Republican leaders have called for multibillion dollar cuts to business and property taxes but so far have remained mum on what mechanisms they’d prefer lawmakers use to get there.

On Wednesday, though, Lt. Gov. Dan Patrick indicated he’d like to pay for the tax cuts by boosting sale tax collections while slowly weaning the state off its reliance on property tax revenue.

“The revenues we get at the state level are primarily sales tax,” the Houston Republican said Wednesday in a speech at the Texas Association of Business’ annual conference. “What we’ve done is a gradual transition from bringing more people in to help pay for what a handful of people – businesses and property owners – have been paying.”

Asked what, if any, legislation has been filed on that front that Patrick might get behind, his spokesman mentioned two “loosely related” bills filed by state Sen. Brandon Creighton.

The Conroe Republican’s SB 186 would require the state comptroller to “conduct a comprehensive study” analyzing “the feasibility of implementing alternative methods” to the state’s business franchise tax and what alternative ways the state could raise sufficient funds to “address the needs of this state.”

Among those, the study would have to look at: imposing a value-added tax, eliminating exemptions from the sales and use tax and increasing the rate of the sales and use tax.

SB 331 would require the comptroller to issue rebates to businesses that pay the franchise tax if there is unspent general revenue leftover from the previous two-year budget cycle.

The first-draft Senate budget Patrick unveiled last month calls for $3 billion in property tax cuts and $1 billion in business franchise tax cuts. The House’s budget plan, released before the Senate’s, did not account for tax cuts although officials have said they will be added later.

Asked Wednesday what the House has in mind for tax cuts, House Speaker Joe Straus said the lower chamber hasn’t “come to a conclusion yet.”

“We left room in our base budget for tax cuts but didn’t specify what they would be,” he told reporters after his own speech to the business association. “Again, that’s what the session’s for. In the House, we don’t just say: Here it is. Vote on it. This is what the speaker wants. We have ideas. We have a lot of leaders and a thorough discussion.”

Lt. Gov. Dan Patrick on Wednesday, Feb. 18, 2015
Lt. Gov. Dan Patrick on Wednesday, Feb. 18, 2015

 

 

Hegar ‘shocked and utterly embarrassed’ about condition of facilities

Update 3:50 p.m. on Feb. 4:

A day after Texas Comptroller Glenn Hegar told Senate budget writers he was “shocked and utterly embarrassed” about the condition of his 20-plus field offices, bipartisan consensus on the Senate Finance Committee emerged even stronger Wednesday around the need to repair beleaguered state facilities — particularly the schools for the deaf and blind.

“It’s horrible, horrible conditions,” said Committee Chairwoman Jane Nelson, R-Flower Mound, of a report detailing unsafe and unsanitary conditions at the school for the deaf.

“When you look at the reports, they’ve got rodents, bats, bed bugs … electrical failure, mechanical system failure, plumbing and sewer system failure and these are young people we are responsible for,” said state Sen. Kirk Watson, D-Austin.  “We’re creating misery for people that we ought to be taking care of.”

The issue re-emerged as the budget-writing panel heard from the Texas Facilities Commission, which told the committee that the state’s “deferred maintenance” needs have grown to almost $1 billion.

State Sen. Kevin Eltife, R-Tyler, noted that sum was just $400 million in 2006.

“You’ve got to spend the money on these buildings to maintain them,” he said. “It is a waste of taxpayer money to let these buildings (get) in these conditions and continue to accrue deferred maintenance.”

Eltife said the price tag has grown despite past recommendations to craft a 10-year maintenance plan.

“We’ve never done that so now we’re at $1 billion and growing,” he said.

Harvey Hilderbran, a former longtime state lawmaker who now heads the facilities commission, told the committee that the “definition of deferred maintenance is the absence of maintenance and we ought to be striving for planned maintenance.”

Addressing the issue “would be a wise investment on behalf of the taxpayers to address it but not to mention our hardworking state employees and the conditions that they find themselves working in  — and the visitors, our clients,” said state Sen. John Whitmire, D-Houston, a committee member.

Whitmire, who chairs the Senate Criminal Justice Committee, noted the Texas Department of Criminal Justice has 108 prisons “and I promise you the roofs, the access, the security concerns, are pretty widespread” because of maintenance issues.

“There are several different issues here that we need to address,” Nelson said later. “And, you know, another one is obviously at what point do you say this is such a mess that money would be better spent to start over.”

Original post:

When Texas’ new chief financial officer appeared before the Senate Finance Committee on Tuesday to outline his office’s own monetary needs, he reminded upper chamber budget writers that he vowed during his campaign to make the comptroller’s office “a model for all state agencies” in terms of tightfistedness.

However, Comptroller Glenn Hegar — a Republican and former state senator — also said the office needs more money to upgrade its buildings, explaining that he had recently gone on a tour of 28 field offices and had “absolutely been shocked and utterly embarrassed by the condition” of them.

Hegar did not get too specific, but suggested the problems involve “basic sanitation” and gave one example of an office where tissue paper had been stuffed into a hole in the wall.

“I tell my staff I may not may not be a big fan of the Wizard of Oz, but I know what Dorothy felt like: We are not in the Capitol anymore,” he said, drawing a comparison between the field offices and the immaculate, pink granite statehouse. (A spokeswoman for Hegar also said he considers the LBJ Building, where his own office is housed, to be in poor condition).

“We do not need the best” facilities, Hegar continued. “But basic sanitation” is a must.

“Prior comptrollers have never stood up here and said ‘We need to maintain our buildings,'” he said, noting he has heard no complaints from the dutiful state employees who are forced to work in the dilapidated facilities.

Susan Combs, Hegar’s predecessor, did not ask for any additional money to upgrade the field offices, according to the office’s biennial legislative appropriations request submitted last fall.

Lauren Willis, a spokeswoman for the Comptroller’s office, said Hegar has not yet submitted an official request but the office is looking into what might be needed.

“We have not updated basic facilities for quite some time,” Hegar said Tuesday. “I wish that I would have toured those offices quite some time ago.”

His comments launched a discussion among committee members about whether the state should conduct an assessment of all its properties, owned or leased.

Many of them are “deplorable,” said state state Sen. Kevin Eltife, R-Tyler, a committee member.