There’s no shortage of blame being thrown around the capital with respect to roadblocks on progress for HB 3, the tax reform bill intended to provide revenue for HB 2, the school reform bill.
First, Comptroller Strayhorn warned members of the HB 3 conference committee that their revenue estimates from closing the so-called Delaware loophole in the franchise tax were too high. Rep. Warren Chisum (R-Pampa), who serves on the HB 3 conference committee, accused Strayhorn of playing politics, saying she appeared to be playing hardball with the projected revenue generated from closing business loopholes: "I’m not a revenue estimator but those that are and have been around for a long time are saying she may be withholding $1 billion," Chisum told Harvey Kronberg’s Quorum Report. "And $1 billion dollars in tax relief is huge for the people of Texas. We think she may be low-balling."
Not surprisingly, Comptroller Strayhorn took issue with Chisum’s accusations. In a letter hand-delivered to Chisum’s office yesterday morning, Strayhorn wrote, "As Texas Comptroller and in fulfilling my constitutional and statutory responsibilities, I never play games. The numbers are what the numbers are. You seem to be under the impression that intimidation and threats will somehow make the numbers different. That is not the case."
Click here to read Strayhorn’s letter in its entirety.
Later yesterday, Sen. Kim Brimer (R-Arlington), a key member of the HB 3 conference committee, told Quorum Report that the two sides have made some progress but have yet to meet in the middle on how to generate key dollars for property tax relief. Specifically, Brimer maintained that the House still needs to find a franchise tax solution that will generate a net of at least $2 billion per year. The current House plan only generates about $650 million per year, Brimer said. Brimer says it’s important to the Senate that the $2.6 billion in property tax relief that businesses will see under HB 3 be matched with an equal generation of tax revenue, providing some kind of reasonable balance between the revenue and benefits under the plan. Options are limited, given the rejection of a gross receipts tax, Brimer said.
Brimer said the Senate also is unwilling to go to a penny on the sales tax increase, saying it gave members “heartburn.” On other areas of compromise, Brimer says the alcohol tax has been cut in half, the areas of sales tax expansion under the House plan have been stripped from the proposed compromise and the tobacco tax is likely to land somewhere around 75 cents.
Brimer went on to lay the blame for the stalemate squarely on Speaker Craddick, saying from the Senate floor yesterday, “If he had let Chairman (Rep. Jim) Keffer negotiate this with us, we could have had it resolved quickly. We think he’s prioritized the major spending bills, with House Bill 3 last.”
Not to be outdone, Craddick blamed the Senate for the holding pattern on HB 3. According to Quorum Report, Craddick said the House passed House Bill 3 in mid-March. The Senate spent two months considering the bill. As a result, the conference committee has less than two weeks to come to a consensus and work out differences. “With that kind of timeline, tensions are running high,” Craddick said. “Rather than pointing fingers and placing blame, the House is spending its time working on a solution to come up with the best plan for Texas.”
Craddick said the House was moving forward as quickly and responsibly as possible, while waiting on numbers from the Comptroller.
Brimer called foul, saying he was unaware of any additional figures the House had requested beyond those quoted in Strayhorn’s letter.
What does the name-calling and blame-laying accomplish towards fixing public school finance? A whole lotta nothing.