State surplus could give Texans a sales-tax break, conservative think tank suggests

Wasting your money...

Wasting your money…

From, Austin Bureau, 04/07/14 –

AUSTIN — An influential conservative think tank is urging lawmakers to squeeze spending to provide Texans temporary relief from the sales tax.

Leaders of the Texas Public Policy Foundation called on the Legislature to create a new fund next year to hold unspent state tax dollars. They would then offset two-year reductions in the state sales tax rate, which is 6.25 percent.

Foundation vice president Chuck DeVore, a former California GOP lawmaker, said the Texas economy and hydraulic fracturing activity in South and West Texas oil fields are so hot that there could be several billions unspent — and politically untouchable — when lawmakers write the next two-year budget.

DeVore said supermajorities in both chambers would have to suspend a constitutional cap on certain spending so they could use the extra $4.2 billion he forecast.

The comptroller would calculate the precise duration of the tax cut. But DeVore said that amount would be enough to reduce sales tax by a half-penny — to a rate of 5.75 percent.

An average family of four in Fort Worth would save $118 over two years, said foundation economist Vance Ginn.

Ginn and foundation official Talmadge Heflin wrote in a brief paper that if the Sales Tax Relief Fund, or STAR Fund, is created, political pressure would grow to vote for sticking money in the fund. The fund also would draw oil and gas severance tax receipts once the state’s rainy day fund hits its legal limit — currently, $14.4 billion.

“A vote against appropriating money into the [tax-reduction] fund would be a vote against tax relief, thereby creating an incentive for taxpayers to follow more closely the appropriations process,” Heflin and Ginn wrote.

He and others are talking to two of the Legislature’s most conservative members — Sen. Brian Birdwell, R-Granbury, and Rep. Phil King, R-Weatherford — about sponsoring legislation to create the fund.

Eva DeLuna Castro, a budget expert for the Center for Public Policy Priorities, a center-left think tank, said the conservatives’ talk of additional tax and spending reductions ignores painful cuts to schools and other programs inflicted by lawmakers in 2011, when they hoarded billions in the rainy day fund that could have averted teacher layoffs.

The foundation “apparently has never heard of the 2003 and 2011 sessions’ massive cuts,” she said.

DeLuna Castro took exception to Heflin and Ginn’s assertion that lawmakers last year “spent every penny” of “an $8.8 billion surplus” left over from the previous budget cycle.

“There was no ‘surplus,’” she said.

Lawmakers used the $8.8 billion, as well as rainy day dollars, to undo some cuts and accounting gimmicks from 2011.

Follow Robert T. Garrett on Twitter at @roberttgarrett.


One response

  1. Don’t hold your breath waiting for a tax break. Money once collected by ANY governmental entity is NEVER given back. They will find something that is required to spend the funds.

    I am 76 years old and have never, ever seen or heard of a tax being reduced or the money collected being returned. The 10% Luxury tax enacted in the 1940’s (to pay for WWII) is still being collected today, and the war ended in 1945. Does tell you anything??
    Jack Cavenah

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