The Dallas Morning News editorializes today about the impending budget crisis for the state legislature. They offer their own solutions on how to resolve the expected $18 billion shortfall. They suggest using funds from the state’s estimated $9 billion rainy day fund, eliminating sales tax exemptions (they don’t say which ones) and “reconsidering” the franchise tax rate. Do you think “reconsidering” means raising the rate? So do I. But not to worry, the News also has their own list of suggested budget cuts; very specific, by state departments. Their cuts total $2.6279 billion.
So if we have an $18 billion shortfall and we use all the rainy day fund (which is highly unlikely) and cut the budget $2.6 billion, that only leaves tax increases of $6.4 billion. If you doubled the franchise tax rate you would only collect about half that amount so that leaves over $3 billion to come from closing sales tax exemptions. Do you think they did the math before making their suggestions? Perhaps the legislature should start with levying sales taxes on newspaper ads and subscriptions.