Sharp says using surplus amounts to “deficit spending”

Local Austin journalist and TSCPA friend Harvey Kronberg reports on today’s meeting of the Tax Reform Commission is Quorum Report. Thanks as always to Harvey for reprint permission.

Sharp dismisses idea of using surplus to address court challenge.

ARLINGTON – The Texas Tax Reform Commission’s road trip around the state ended today with a low-key two-hour hearing in Arlington dominated by convenience store operators and members of Dallas Area Interfaith.

Chair John Sharp and his commission are working on a tight timeline, intending to unveil a tax plan by the end of this month. After the hearing, Sharp told a radio reporter from KERA that he considered the commission’s imminent proposal to be the “last best chance to pass property tax relief.” The Legislature faces an imminent Supreme Court deadline. The regular session next spring will be a crowded calendar of competing budget and legislative issues, including education reform proposals. The time is now, Sharp said.

Speakers before the commission today talked about the merits of taxes. But Sharp’s biggest obstacle may be conservatives in the Legislature who want no tax at all. Already, Rep. Warren Chisum (R-Pampa) has begun circulating a letter that proposes using the current budget surplus to stave off the Supreme Court challenge and waiting until the regular session to address tax reform. Chisum’s proposal, already signed by nine of the more conservative House members, would take $2.6 billion to buy down the tax rate by 20 cents and then provide some discretion for local school districts to raise tax rate increases at 5 cents per biennium.

“There’s no rocket science here,” Chisum said. “We’ve got to look at what makes sense.”

The Legislature should get the court challenge behind it, then choose to address the tax system during the regular session, Chisum said. Sharp calls such a proposal “deficit spending” and a plan that would open the state up to “quick revenue” proposals such as gambling during the upcoming regular session. Gov. Rick Perry’s office also lacked enthusiasm for the proposal.

“This special session provides legislators a unique opportunity to address property tax reduction issues and to make our tax system fairer,” said spokeswoman Kathy Walt. “The governor’s belief is that both can be addressed.”

A lobbyist at today’s hearing, having heard the proposal, put it another way. He quoted a long-time lawyer for his association. “I can support my own hanging, as long as I can delay it,” he joked.

At today’s hearing, Dallas Area Interfaith spoke to the regressive nature of sales tax expansion. Convenience store operators talked to the financial burden of a transition to higher cigarette taxes and the likelihood of bootlegging of cigarettes once taxes are raised. A teacher asked the commission to separate the tax and reform issues, and one speaker suggested a fair flat-rate income tax would be more transparent than a business tax and track personal income more closely.

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