It’s almost impossible to tell, as the end of a regular legislative session draws to a close, with several unfinished “priorities” still not done, how serious the talk of a special session is. At first it’s not a threat, just thrown out there for legislators to keep in the back of their mind. But if Gov. Rick Perry is serious about his criteria then, at least right now, it’s likely they’ll be back this summer.
“It should be no surprise that if folks want to go home at the end of this legislative session, send me $1.8 billion worth of tax relief, send me a balanced budget that has no fee increases for transportation and $2 billion of infrastructure for water, and everybody can go home and enjoy their summer,” he told reporters.
We know any budget he gets will be a “Texas-style” balanced budget, so the main sticking point on that right now seems to be whether the two GOP-dominated chambers can compromise among themselves on a budget.
This year, it is hung up on a matrix of interconnected decisions — funding for public schools, water and transportation; tax cuts; and whether to tap any of the $11.7 billion of available rainy-day dollars and whether to defy anti-tax and fiscal hawk groups by voting to bust a state constitutional spending cap.
One lobbyist, familiar with the Pitts-Williams blow up but declining to be identified because clients haven’t authorized him to speak about the delicate negotiations, described one possible exit strategy. Think of the remaining problems in three layers — always, with summer time talking points for politicians in mind, the lobbyist said.
On the bottom is the question of public schools, he said. If leaders undid the $4 billion of formula cuts made last session, Democrats could crow they succeeded in their main mission this session — and be forced to go along with a second-layer question: How to let Perry save face.
This could be accomplished by approving a constitutional amendment to cut business-franchise taxes by $1 billion over two years, the lobbyist said. However, House leaders do not want to use rainy-day dollars for tax cuts. And cutting the margins tax wouldn’t require a vote to bust the spending cap; it would just reduce available revenues, experts say.
The final layer would be water improvements, the lobbyist said. On this, Democrats and Republicans would have to agree to tap the rainy day fund for $2 billion and vote to bust the spending cap.
“You would hold hands and jump off the cliff together,” he said.
Some GOP leaders, though, have said fears of exceeding the spending limit are unfounded. They say voters can be persuaded that it was prudent to go beyond the limit and spend just a bit more than one-sixth of state savings to jump-start construction of new water reservoirs and pipelines, and get out in front of possible water shortages in drought-stricken Texas.
Senate leaders, meanwhile, prefer to avoid a spending-cap vote by going to the voters to approve draw-downs of rainy day money. The Senate passed a constitutional amendment to tap $5.7 billion of rainy-day dollars and use it for transportation ($2.9 billion), water ($2 billion) and public schools ($800 million). There are indications, though, that Senate leaders might give on funding schools and transportation that way. Stay tuned.
Oh did he say water. We’ll the water issue may be the toughest to finish before the session. These two from StateImpact Texas show where things stand: After Bill Falters, What’s Next for Water Funding in Texas? and Water Bills Flood the House.
And as far as Perry’s tax cut goes it’s kind of hard to tell, but it doesn’t look like either chamber has hit his magic number of $1.8 billion.
The House late Tuesday night approved $667 million in franchise tax cuts for state businesses, which Perry said Wednesday gets them “a third of the way there.”
But they might be even farther along than that, depending upon how Perry defines tax relief.
The Senate has approved a constitutional amendment to rebate $730 million in utility fees to households and businesses while the House this week passed tax credits for businesses that total about $350 million on top of the franchise tax cut.
And his threats to seem to be of much concern to legislators.
The House late Tuesday night approved $667 million in tax cuts for state businesses — but only after some of the fiercest debate of what had been a relatively harmonious session. Democrats, who were ultimately outvoted by their GOP colleagues, argued the money should go to public schools which are still reeling from $5.4 billion in cuts lawmakers approved in 2011.
Perry said of the difficult vote, “they’re a third of the way there.” Asked if that will be enough, he replied, “$1.8 (billion) will be.”
Sen. Kirk Watson of Austin, leader of the Senate Democrats, dismissed Perry’s tax-cut demands as unrealistic.
“It’s unfortunate that he would say something like that,” Watson said.
Sen. Kevin Eltife, a Tyler Republican who has been critical of the governor’s approach to water and transportation issues this session, said those should take priority over tax cuts.
“When we’re struggling to find $4 billion (per year) for roads and have to take money out of the Rainy Day Fund, I don’t know how at the same time you pass a tax cut,” Eltife said.
As for the threat of a special session, Eltife retorted: “I happen to love Austin.”
In this session there doesn’t seem to be much urgency to get anything done, more confusion then anything else. It’s as if having money to spend has baffled these “conservatives”. It’s as if the only thing they know to do with government is tear it down, they have no idea how to build it up and use it to help people. It’s a pretty simple proposition. We have money and we have needs. Use the money to pay for our needs. But that just confuses the hell out of them, and they don’t know what to do. If this keeps up they may have to waste taxpayer money on a couple of special sessions to figure it out.
Whether they get these near term items settled or not, there’s likely to be at least one special session before 2015. On either public school finance or redistricting. Some of this is posturing and bluffing. There’s still time to get what these guys perceive to be the needs of Texas finished before May 27th. Hopefully they can clear up their confusion and get something done that doesn’t hurt Texas too bad.