02.05.10
Posted in Around The State, Privatization, Road Issues, Taxes, Transportation at 11:00 am by wcnews
Sen. Bob Deuell (R-Greenville) is the latest elected Republican to come out in favor of raising the gas tax. Via the DMN Another GOP senator supports gas-tax increase …
Nevertheless, Greenville’s Bob Deuell told members of our editorial board this week that he would support a one-time boost of 10 cents a gallon in the motor fuels tax — the same increase that Republican John Carona of Dallas has called for.
Deuell has shown in the past that he can be more reasonable than some in his party. We’re still not there yet, but we’re getting closer to the where enough elected politicians will finally recognize, what many of us have known for a while - that an increase, and indexing of the gas tax is the best way to pay for roads in Texas. It’s a tough sell but not impossible, and a skilled politician can support it and get elected. And as long as it done in a way that tax payers are assured the money is going for roads, it is politically feasible.
Permalink
02.04.10
Posted in Around The State, Commentary, Taxes, The Budget, The Economy, The Lege at 2:09 pm by wcnews
House Committee looking to expand sales taxes.
State sales tax receipts in Texas has been slumping for quite some time, Texas sales tax collections are $1 billion behind, and they are the major source of income for the state.
But the decline is dramatic. A year ago, Combs forecast essentially flat sales taxes receipts in the budget year that started Sept. 1; instead, they’ve decreased by 12.9 percent in the first four months.
To meet Combs’ biennial revenue estimates, Texas needs to collect nearly $44 billion from its revenue workhorse, the 6.25-percent state sales tax. It produces 57 percent of state tax revenue and about a quarter of overall funds, including federal money.
But just one-sixth of the way into the new two-year budget, it has collected only $6.3 billion. Last year, collections from September through December were nearly $7.3 billion.
And the estimates of how big the deficit will be in for the next budget cycle is looking grim. There are “educated guesses” right now of a deficit somewhere between $10 – 20 billion dollars.
The last time Texas lawmakers had to cut the state budget was 2003, when they faced a $9.9 billion shortfall. Next year’s deficit very well could be bigger. Some guesses that have been posed:
$10.8 billion: John O’Brien, director, Legislative Budget Board
$15 billion: House Appropriations Committee Chairman Jim Pitts, R-Waxahachie
$17 billion: Senate Finance Committee member Tommy Williams, R-The Woodlands
$19 billion to $20 billion: Sens. Royce West, D-Dallas, and Eliot Shapleigh, D-El Paso
Which brings us to the House Ways and Means Committee. The committee has a Democratic Chair, but an 8 – 3 GOP majority. Here’s what an “An Outside Observer Analysis” [.pdf] said last year when the committees were announced about Ways and Means:
Read the rest of this entry
Permalink
01.27.10
Posted in Around The State, Taxes, The Economy at 7:00 am by wcnews
Via a new report from Texans for Public Justice (TPJ), Governor Perry’s Pet Jobs Program Suffers Its Own Recession.
Many projects receiving millions of dollars in taxpayer subsidies through Governor Rick Perry’s high-profile Texas Enterprise Fund (TEF) failed to meet their contractual job-creation targets as the recession took hold in 2008.
An analysis of 45 TEF projects that received a total of $363 million in tax subsidies finds that a growing number of TEF recipients defaulted on their job-creation pledges in 2008, with even more defaults expected for 2009.
Key findings of TPJ’s analysis reveal:
* The Governor’s Office has awarded $363 million to 45 TEF recipients to create or maintain 47,735 jobs. These projects claimed 31,319 jobs in compliance reports covering 2008.
* Just 13 of the 45 job-related projects reviewed were performing well.
*As of October 2009 the Governor has penalized 11 TEF grantees for defaulting on their job creation commitments. These penalties, totaling $647,100, amount to just 1 percent of the $64 million in TEF funding that they received.
* The Governor has imposed the “death penalty” on just two TEF projects despite the fact that many other TEF recipients have qualified for termination.
* In February 2009, Perry declared that the TEF program had created 54,000 jobs since 2003. More than one-third of these jobs are pledges that have yet to materialize.
Read the full report, Recession Pounds Perry’s Jobs Fund. Which includes this nugget:
Unemployment Insurance Has Funded the Enterprise Fund
Texas’ Unemployment Compensation Trust Fund is running out of money to pay benefits to all the state’s laid-off workers, including those laid off by companies subsidized by the Texas Enterprise Fund. The irony here is that the state unemployment fund has transferred $161.5 million to Governor Perry’s job fund since the legislature authorized such funding in 2005. The Texas Workforce Commission recently announced that the unemployment-insurance taxes paid by most employers will almost triple in 2010 to cover shortfalls. In other funding, the legislature has appropriated $577 million for TEF since 2003 (though it snubbed Governor Perry’s request for $261 million more in 2009).
Oh the joys of corporate welfare.
Permalink
01.13.10
Posted in 2010 Primary, Around The State, Commissioners Court, Election 2010, Taxes, The Budget at 12:35 pm by wcnews
Via BOR Perry puts extremism ahead of Texas, Rick Perry is putting a very narrow and extreme partisan Republican primary agenda ahead of the best interests of 4.8 million Texas schoolchildren.
John Bradley finally obeys the AG’s ruling, Texas Forensic Science Commission releases details about allegations of critical lapses at crime labs. Grits and the FWST have more.
Williamson County loses $1 billion in “taxable value”, via the Wilcosun.com:
Williamson County appraiser Alvin Lankford told county commissioners Tuesday because of a decline in overall new housing and commercial construction the county could possibly lose 3 percent, or $1 billion, worth of taxable value for the 2010-11 fiscal year budget. “Right now these are approximate numbers and they could change,” Mr. Lankford said. “Anything could happen.”
RRL has more on the start of budget prep in Williamson County.
“The biggest thing I think we are going to see [with property values] is in the commercial,” she said. “If their value goes down, residential picks it up. But usually that’s our windfall each year – new commercial property that comes on the rolls. I don’t know that we’re going to see that this year.”
“Residential picks it up”, translates to residential property tax rates will rise. Commercial real estate (CRE) is in the toilet. There are two buildings as you pass La Frontera heading South on SH 45 that have been finished for well over a year and still have no tenants.
Hardcastle on White, Perry can’t beat Bill White.
Hardcastle said while he supports both Rick Perry and Kay Bailey Hutchison, he said he is leaning toward Hutchison for a variety of reasons.
“I think Kay can beat Bill White, and I don’t think Rick can beat Bill White,” Hardcastle said. “I think the (Trans Texas) Corridor will kill him against Bill White. I don’t want to see a Democrat governor when we have a Republican majority.”
Shami not a Quaker, What IS Farouk Shami’s Religion ?
Permalink
01.07.10
Posted in 2010 Primary, Around The State, Commentary, Taxes, The Budget at 3:19 pm by wcnews
Jason Embry has the latest on this Perry campaign trick, Perry calls for new limits on taxes, spending.
Gov. Rick Perry called Wednesday for tighter constitutional limits on state taxes and spending, borrowing a couple of ideas that have been taken for bumpy rides in other states.
Perry, facing a tough re-election fight in the March Republican primary, called for a constitutional amendment requiring any increase in state taxes to be approved by two-thirds of the Legislature, instead of a simple majority. He also said he wants a tighter constitutional restriction on state spending.
“These two sensible amendments will engrave our proven fiscal discipline into the bedrock of state law,” Perry said during campaign stops in Fort Worth, Lubbock and Midland.
California, which has seen deficits in the tens of billions of dollars in recent years, requires a two-thirds vote for tax increases. Critics say the provision has made it more difficult for the state to cope with its budget woes because a minority of lawmakers can thwart the majority’s wishes.
As the Center for Public Policy Priorities points out this is exactly what got California into it’s precarious budget situation.
California amended its constitution to require a two-thirds vote of the Legislature to adopt a budget or increase tax revenues. Writing budgets and raising revenues are the ordinary business of government, but the California Legislature cannot act even with a vote of 65 percent. Because the majority no longer governs the California Legislature, the state is a disaster. Our own Governor’s website trumpets an October 29, 2009, article from Trends Magazine, describing California:
California is $26 billion in the hole and has recently been paying its bills with IOUs. Its once-proud schools are suffering and the prison system is releasing criminals early because the state can’t afford to keep them. Social services are being cut right and left. Infrastructure is aging and falling apart. Unemployment is nearing 12 percent. State employees are forced to take unpaid furlough days and many California cities are worse off than Detroit.
This is one of those things that may look great on paper but in practice is a disaster. If government leaders overreach then the people can vote them out. But giving this kind of power to a minority it s huge mistake. Again from the CPPP:
..[T]he Governor proposed two constitutional amendments, a California-style budget and tax restriction based on minority rule and a Colorado-style spending restriction based on an arbitrary formula unrelated to what Texas needs or can afford. Texans are best protected by a representative democracy based on majority rule without arbitrary restrictions. Texas faces many challenges but spending too much is not the problem. Texas ranks near the bottom in state spending. The Texas problem is that low- and moderate-income families pay too much in taxes while the top pays too little. Minority rule and arbitrary spending limits are designed to protect the top, not to protect Texas.
The “far-right off” in this primary is producing some truly disastrous policy proposals so far.
Permalink
12.21.09
Posted in 2010 Primary, Around The State, Bad Government Republicans, Election 2010, Taxes, The Budget at 12:02 pm by wcnews
Jason Embry had a good article about the budget conundrum we’re facing in Texas during the next budget cycle, Because of shrinking revenue, Texas may need $15 billion to balance budget. Embry does a great job of pointing out how we got here – the tax swap of 2006 has never produced the money that was projected and created a structural deficit. And what the GOP leaders priorities are. It’s starts out showing how Lt. Gov David Dewhurst is trying to finagle state agencies, except health and human services and public education, into cutting their spending.
As compared with a year earlier, sales tax collections were down 14.4 percent in November, and those kinds of returns have hastened budget-cutting talk. But what’s really driving the conversation is a decision that lawmakers made in wealthier times to put property tax cuts at the top of the state’s permanent priority list.In 2006, facing an order from the Texas Supreme Court, lawmakers passed a one-third reduction in school property taxes for operations, committing the state to spend $7.1 billion every year to hold those taxes down. But the tax increases that lawmakers passed at the same time to replace that money — most notably a revamped business tax — produce less than $3 billion per year.
So every two years, the state has to pull more than $8 billion away from other priorities, such as public schools, universities or prisons, to pay the rest of the cost of property tax cuts. Doing so wasn’t too difficult when the state had surpluses, but now that they’re gone, the property tax cuts threaten to eat up any revenue growth the state sees, even though many homeowners never saw much of a decrease in their tax bills.
To meet the state’s commitment to hold down property taxes, to pay for an increasing number of people enrolling in public schools and colleges and joining Medicaid rolls and to replace the stimulus dollars used to pay for the current budget, lawmakers in 2011 might have to come up with $15 billion or more to balance the budget, which now totals $182 billion over two years.
It appears that Dewhurst’s main goal with these cuts isn’t, first to make sure the state has enough money to operate, but to make sure there is enough money to operate while protecting the tax swap from 2006.
Because the cost of keeping down property taxes isn’t going anywhere — in fact, thanks to an additional tax cut for small businesses that lawmakers passed this year, it’s getting more expensive — Dewhurst wants to tell agencies to trim their spending so lawmakers will have some money left over for the budget that they’ll have to balance in 2013. He’d like to get House Speaker Joe Straus to sign on to a letter instructing them to do just that.
The lengths they will go to save the 206 tax swap, at all costs, is bordering on ridiculous.
And even though it is the state’s effort to restrain property taxes that is causing much of the projected shortfall, that effort could result in higher property tax bills because the state will have fewer dollars to help school districts, community colleges and other forms of local government cope with cost increases, she said.
While some of the Capitol’s best minds are already taking a hard look at the budget shortfall, it’s not getting much attention so far on the gubernatorial campaign trail.
That is the definition of “the elephant in the room”. The tax swap is sinking the budget, but it must be protected at all costs. It’s extremely interesting that a tax that Dewhurst trashed shortly after it passed, going so far as to call for it’s repeal, is now doing anything he can to protect it. It would seem that any tax swap, that insures the wealthy in Texas don’t pay their fair share of taxes is worth protecting.
Here’s what Dewhurst and Hutchison had to say about the 2006 tax swap back in June 2008, (many good links that still work and provide good context for the situation):
U.S. Senator Kay Bailey Hutchison called the margin tax “an abject failure” in what most reasonable observers would characterize as a campaign speech.
Dewhurst has weighed in on the issue too, telling the Greater Austin Chamber that we ought to throw the whole thing out and go back to the old franchise tax.
Our elected “leaders” should be trying to find a way to fund our state budget that is fair and equitable, not doing everything they can to perpetuate a flawed tax swap that they knew was flawed when it was enacted. As Embry so correctly points out, none of the members of the Texas GOP running for election want to talk about the budget shortfall or the 2006 tax swap, for good or bad. Which leaves us to assume that they have all accepted the tax swap of 2006 as sound public policy going forward. If not they should say something fast about what their alternative would be.
But this is what is facing the GOP as they try and keep a hold on all of the levers of government in Texas. They been in complete control of Texas since 2003, but have had control of the state since about the mid-1990’s. This has been a GOP plan all the way, and voters won’t allow them to blame Democrats for this mess. Just the people they see in the mirror. They only have one answer to any financial problem facing the state of Texas – cut taxes. Where will they cut taxes in 2011 to fix the budget shortfall?
Permalink
12.15.09
Posted in Around The State, Commentary, Road Issues, Taxes, Transportation at 11:54 am by wcnews
Via the WacoTrib and ABJ we find out that the Texas Transportation Commission has formed a Highway User Fee Exploratory Committee to look into the feasibility of a vehicle miles traveled (VMT) tax.
In late November, the Texas Transportation Commission laid groundwork for a Highway User Fee Exploratory Committee that would begin meeting in March and draft a report by August, a few months before state lawmakers convene.
This is something that is worth looking into, but it should also be noted that a VMT tax will not implemented, and can’t take the place of the gas tax, anytime soon. This should not forestall any plans to raise and index the gas tax in the immediate future, so money can be raised to build the roads we need now.
The VMT tax still has many issues to be worked out, that’s for sure.
The VMT tax would be a paradigm shift for Texas. Oregon conducted a pilot program to see if a mileage tax was technologically feasible (they found that it was), but no states have adopted such a tax.
Chris Lippincott, a spokesman for the Texas Department of Transportation, said the tax could be collected in a variety of ways, including an odometer check during drivers’ annual vehicle inspections or through GPS trackers.
Both methods have drawbacks, however.
Relying on an odometer check to tally mileage would mean drivers could be taxed for miles piled up in other states or off state roads.
The GPS method, though more precise, raises privacy concerns.
“There are people who have deep concerns about a black box in their cars that tells the government where you went and how long it took to get there,” Lippincott said.
Still, he said, “the review of the (VMT) tax is significant because the motor fuels tax is a tax of declining usefulness and, at some point in the future, the tax is something that may be considered by the Legislature.”
[...]
When asked how long it could take, given the privacy and environmental concerns with mileage taxes, [Chris Evilia, director of the Waco Metropolitan Planning Organization] said we won’t see mileage taxes cropping up overnight.
“I think it’s going to take at least a decade, and some say maybe even a generation,” he said.
A couple of things. If it was so feasible, it would have been implemented somewhere by now. It’s also going to take quite some time to get all vehicles on the road with a GPS system on board. And yes, there will be resistance from drivers to being tracked at all times. Or the alternative, getting an annual tab, of presumably hundreds of dollars, when getting an annual vehicle inspection.
This Policy Research Paper from 2008 called Moving Texas To The 21st Century [.pdf] had a good synopsis of the the VMT tax on page 22. Calling it very efficient, somewhat equitable, and very complex.
A VMT charge system is new to the U.S. and likely to be understood as a substitute for motor fuel taxes. VMT charges are very complex to implement and administer. Implementation would take significant investment in administration, education, and new technologies. The most likely path toward nationwide implementation would be through a 20-year effort. VMT charges would be difficult to enforce in border areas.
EOW posted on the VMT tax the last time it came up, over two year ago. It doesn’t appear much has changed. This tax isn’t any closer to being implemented than it was then, the gas tax has still not been raised, and the neglect of our highways in Texas continues.
By all means we should look at this as a possible future solution for funding transportation in Texas, but we can’t let it keep us from doing the work that needs to be done now.
Permalink
12.10.09
Posted in Around The State, Austin, Commentary, Election 2010, Round Rock, Taxes, The Budget, Williamson County at 3:58 pm by wcnews
The sales tax numbers for Austin and Round Rock – as well as the state as a whole – continue their slide. Austin’s allocations are 8.73% lower this December than last, and down 10.64% for the year. Round Rock’s are even worse 21.76% for December and 12.43% for the year. (List of Top 20 cities in Texas allocations). For Williamson County cities as a whole allocations are down 17.05% in December and 9.91% for the year. (List of cities by county, scroll down until you see Williamson).
GOP Lt. Gov. Davide Dewhurst speaking in Waco yesterday, (tip to Comeandtakeitblog), appears to be willing to use the Rainy Day Fund (RDF) to balance the budget in 2011. He also wants most state agencies to cut their budgets by 2.5% to help balance the budget in 2013.
Lt. Gov. David Dewhurst discussed a proposal to cut state agency spending during the next 3 1/2 years, hoping to offset a budget deficit and projected shortfalls, during a visit to Waco on Wednesday.
The state’s structural budget deficit — the result of 2006 school property tax cuts that weren’t offset by business taxes — along with the bleak economy have contributed to a gloomy long-term financial outlook for Texas that spells trouble in 2013, Dewhurst said in a meeting with the Tribune-Herald editorial board.
A Republican who, as lieutenant governor, presides over the state Senate, Dewhurst said that by using the Rainy Day Fund lawmakers will be able to balance the state’s budget in 2011. But he said agency cutbacks are crucial to getting through the 2013 legislative session. The sooner cuts kick in, the better, he said.
“I’d rather start today so that any belt-tightening is smaller than if we wait around and sit on our hands,” Dewhurst said.
Dewhurst laid out a plan that would cut most state agencies’ budgets by 2.5 percent during 3 1/2 years to cover the projected budget shortfall in 2013 and give the state’s economy time to pull out of the recession. He said his plan would spare public education and health and human services programs.
The Center for Public Policy Priorities (CPPP) contends that the RDF will be insufficient to balance the budget in 2010, and they “..urged our federal officials to provide additional state fiscal stabilization to avoid cuts to critical state functions such as public education.
Dewhurst has a plan, he deserves credit for that. All candidates running for office in Texas in 2010 must address the upcoming budgetary concerns facing Texas in the next several years.
Permalink
11.20.09
Posted in Around The State, Commentary, Election 2010, Public Schools, Taxes, The Budget, The Economy at 11:55 am by wcnews
Kuff has a post today with links to a couple of articles about the economic snowball that’s heading towards Texas in the next biennium and beyond, State sales tax revenues way down. This TexasTrib article he links to states:
The people in government who look at spreadsheets — so the rest of us don’t have to — are getting nervous about the state’s finances.
Sales tax revenues have taken double-digit dives for five months running; in each of those months, the state’s income from those taxes has been more than 10 percent lower than in the same month the year before. In a state where a steady rise in sales tax money has become almost a rule, the intake for the last 12 months is down more than 5 percent. And budgeteers assumed not only that they’d match the old numbers, but that they would exceed them.
And an ongoing “structural deficit” — the kind of term that seems designed to scare people away from a conversation about money — creates an ongoing problem. In 2006, in an effort to lower property tax burdens, the state agreed to spend more on public education. Lawmakers created a new business tax, but it raises less than they agreed to spend on the property tax fix. The gap has to be filled every time they write a budget. Last time, the feds showed up like leprechauns with pots of stimulus money and kept Texas from choosing to use its Rainy Day Fund, raise taxes or make spending cuts. Next time, the stimulus money won’t be there, but the hole will be.
It’s impossible to see how that does not mean trouble for Texas, a state without an income tax that relies heavily on a statewide sales tax. And an ongoing, or structural deficit, means that the Perry/GOP tax shift of 2006 will cost middle class and poor Texas – because that’s who pays – even more money in the long run. As Kuff goes on to point out the other problem this creates is it will, again, put Texas public education back in the forefront.
In 2007, that gap was filled by surplus general revenue funds. More surplus funds were put aside that year to pay for the shortfall in 2009. Needless to say, no such surplus will be available in 2011. The Rainy Day Fund, assuming the votes are there to use it, might be able to cover both the revenue shortage and this structural gap, but I wouldn’t be too optimistic about that. But sooner or later, which is to say this session or the following one, that great big unaffordable property tax cut is going to have to be dealt with. The only thing that sustains me when I contemplate the possibility of another term for Rick Perry is the knowledge that this reckoning would have to happen on his watch.
Of course, I’m sure he’ll defend the property tax cut to his last dying breath, and if he has to provoke a budgetary crisis or two to do that, he will. But his options may be limited this time around.
We knew it back when the tax shift was passed in 2006 that it was only “kicking the can down the road”, so this should surprise no one. And for all of the credit Perry has taken for Texas’ economy doing so well, he’ll definitely be more than willing to take the blame for this….right?
These issues will continue to become bigger as we continue to move forward toward the 2010 primary and general election, and all candidates running for office need to be able to speak about how they will tackle them.
[UPDATE]: Unemployment numbers continue to rise in the state and Austin area. TWC press release.
Permalink
11.19.09
Posted in Around The State, Commentary, Taxes at 11:24 am by wcnews
A new study released yesterday called Who Pays?, by the Citizens for Tax Justice (CTJ), found that State & Local Taxes Hit Poor & Middle Class Far Harder than the Wealthy.
By an overwhelming margin, most states tax their middle- and low-income families far more heavily than the wealthy, according to a new study by the Institute on Taxation & Economic Policy (ITEP).
“In the coming months, lawmakers across the nation will be forced to make difficult decisions about budget-balancing tax changes—which makes it vital to understand who is hit hardest by state and local taxes right now,” said Matthew Gardner, lead author of the study, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. “The harsh reality is that most states require their poor and middle-income taxpayers to pay the most taxes as a share of income.”
Nationwide, the study found that middle- and low-income non-elderly families pay much higher shares of their income in state and local taxes than do the very well-off
The DMN has an article on the study and it’s findings on Texas, Poor Texans shoulder heavy tax burden. The article does the usual thing of finding the left v. right takes on the subject, but finishes with this from the study.
The institute’s study said the media and elected officials often refer to states such as Texas as “low-tax” states without considering who benefits the most within those states.
In Texas, the study found that state and local taxes eat 12.2 percent of incomes of the bottom 20 percent of earners – families with less than $18,000 of income.
For the middle 20 percent of earners, those making between $31,000 and $51,000, the state-local tax bite was 8.5 percent. And the top 1 percent, who make $463,000 or more, pay just 3.3 percent of income in state and local taxes.
“No-income-tax states like Washington, Texas and Florida do, in fact, have average to low taxes overall,” the study said. “Can they also be considered ‘low-tax’ states for poor families? Far from it.” [Emphasis added].
Essentially Texas is a low tax state for the wealthy, but not for most of the people that live and work here. Here’s the specific fact sheet for Texas [.pdf] from the report. Of course this is something that the CPPP has been pointing out for quite some time.
Permalink
Previous entries Next Page » Next Page »