Since Dan Patrick was sworn in as Lt. Governor, he has stood strong on several items, including tax cuts, but until last week we didn’t know how he expected paying for these cuts.
Last week, Patrick finally spoke about his plans to lower the business franchise tax and property taxes. His plan is to pay for the tax cuts by boosting sales tax collections while slowly removing the states dependence on property tax revenue.
“The revenues we get at the state level are primarily sales tax,” Patrick said Wednesday in a speech at the Texas Association of Business’ annual conference, according to the Houston Chronicle. “What we’ve done is a gradual transition from bringing more people in to help pay for what a handful of people, businesses, and property owners, have been paying.”
There have been two bills filed by state Sen. Brandon Creighton, (Conroe, TX) and a Patrick representative mentioned they were “loosely related” that Patrick might be interested in.
Creighton’s Senate Bill 186, requires the state comptroller to “conduct a comprehensive study” to analyze “the feasibility of implementing alternative methods” to the franchise tax and what additional options the state could raise the adequate funds to “address the needs of the state.”
Additional items the study would look at: imposing a value-added tax, eliminating exemptions from sales and use tax and increasing the rate of the sales and use tax.
The other bill that Patrick might be interested in is Senate Bill 331 and requires the comptroller to issue rebates to businesses that pay the franchise tax if there is unused general revenue surplus from the previous two-year budget cycle.
Patrick’s first draft budget calls for $1 billion in business franchise tax cuts and 3 billion in property tax cuts.
The House’s budget plan, released before the Senate’s, did not account for tax cuts, although officials have said they will be added later, according to the American-Statesman.
Asked Wednesday what the House has in mind for tax cuts, House Speaker Joe Straus said the lower chamber hasn’t “come to a conclusion yet.”
“We left room in our base budget for tax cuts but didn’t specify what they would be,” he told reporters after his speech to the business association. “Again, that’s what the session’s for. In the House, we don’t just say; Here it is. Vote on it. This is what the speaker wants. We have ideas. We have a lot of leaders and a thorough discussion.”